House bill provides framework for One Nation Bank
Credit to Author: Sheila Crisostomo| Date: Sun, 9 Apr 2023 00:00:00 +0800
MANILA, Philippines — A bill has been filed with the House of Representatives providing a legal framework for the planned merger of the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP).
House Bill 7685, filed by Parañaque City Rep. Gus Tambunting on March 17, proposes the merger of the two government-owned banks into a single entity to be called “One Nation Bank.”
The measure shall provide the “legal framework for the merger and outlining the necessary steps for its execution.”
The merger is aimed at “achieving greater efficiency, synergy and competitiveness in the delivery of banking services to priority sectors such as agriculture/agrarian reform, small medium enterprises, infrastructure and public services.”
The goal is also to eliminate “unnecessary duplication and overlap in functions (as) the merger will result in a stronger, more efficient and competitive universal development bank.”
“This will enable the bank to better fulfill its mandate of providing banking services to propel countryside development and contribute to sustainable and inclusive growth,” the bill’s explanatory note stated.
The merger, according to proponents, “shall provide better access to quality financial services in unbanked and underserved areas,” which will “help promote financial inclusion and reduce poverty.”
Finance Secretary Benjamin Diokno announced on March 28 that an LBP-DBP merger would “create a bigger, stronger and more resilient bank that can better serve the country’s development needs.”
By merging the two, it will become the largest bank in the Philippines.
With an estimated combined asset size of about P4.18 trillion and deposit base of P3.59 trillion, a merged LBP and DBP would emerge as the country’s largest bank.
The LBP will be the surviving entity, given its higher authorized capital stock of P800 billion and stronger financial position.
Under Tambunting’s bill, the Governance Commission for GOCCS shall be mandated to implement the merger, in consultation with the Department of Finance and the Bangko Sentral ng Pilipinas.