‘Only Marcos EO needed to merge LBP-DBP’

MANILA, Philippines — President Marcos can simply issue an executive order (EO) to formally merge the Land Bank of the Philippines (Landbank) and Development Bank of the Philippines (DBP) and create the country’s largest banking entity, according to Finance Secretary Benjamin Diokno.

The finance chief said the instruction of Marcos to merge the two financial institutions is clear.

Legal concerns have been raised by the DBP, which has been upfront in its stand against the merger.

“What I said before, that’s it. The GCG (Governance Commission for GOCCs) will issue a draft executive order for the President to sign. That’s the action,” Diokno told reporters yesterday.

“DBP expressed their arguments, but in the end, the President decided,” he said.

As to when the draft EO will be signed by the President, it is up to the GCG to come up with a draft.

This will have to be first approved by the five-man GCG board whose members include Diokno, Budget chief Amenah Pangandaman, GCG chairman Alex Quiroz and GCG commissioners Gideon Mortel and Geraldine Martinez.

Diokno maintained that the merger does not have to go through both houses of Congress contrary to previous arguments that lawmakers need to come in since both Landbank and DBP were created by laws.

“There’s no legal question there. That’s what GCG said, they can abolish and merge through an EO,” Diokno said.

“It is clear and it is really possible. The GCG can do that to rationalize the corporate sector,” he said.

Last week, the GCG said it is in the process of looking into the specifics of the merger as it involves two major banks that are state-owned.

“We want to ensure that the merger is seamless and will not disrupt or cause issues or concerns in their respective operations and processes,” GCG said.

The GCG evaluation is expected to cover all areas and are considered of utmost importance as Landbank and DBP are eyed to be sources of the proposed sovereign wealth fund.

In a GCG circular issued in 2015, the quasi-legislative power granted to the President to merge GOCCs shall formally be covered by an EO.

Once the merger of GOCCs is formally approved by the President in an EO, the GCG will still constitute a technical working group composed of the relevant agencies involved.