By Ellson Quismorio
How about re-exploring the halted merger between the Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP)?
Oriental Mindoro 1st district Rep. Doy Leachon floated this idea Monday, a week after the LBP became the subject of a high-profile tirade of President Rodrigo Duterte, in his fourth State of the Nation Address (SONA), no less.
“I’m actually for [the] merger of LBP and DBP,” Leachon, chairman of the House Justice Committee in the 17th Congress, said in a text message.
The lawmaker went on to justify his position on the merger of the two government finance institutions, which was first seriously talked about in 2015.
“LBP also caters [to] general banking, like DBP. If that’s the case that it can function as such, the law merging them can just amend to include farmers’ banking needs including the loan term or duration covering various types of loan agreements,” noted Leachon.
Former president Benigno S. Aquino III, in one of his last directives before stepping down in 2016, signed Executive Order (EO) No. 198 green-lighting the merger of the LBP and DBP.
However, this was stopped by the Duterte administration in September 2016, or just seven months after the EO was signed.
In his SONA last July 22, President Duterte slammed the LBP for being too commercialized and not fulfilling its supposed mandate of serving the needs of Filipino farmers, who are typically poor and lacking capital. He went as far as threatening to “reconfigure” LBP if it didn’t change its ways, pronto.
The LBP and DBP are the first and second-largest government-owned banks in the country, respectively.
Furthering his point, Leachon said that the present set-up pushes the two government banks to compete with each other. “There is actually no need to compete for growth as both [of] them are already huge commercial banks.”
“But the law creating or merging it would streamline operations and thereby reduce the gargantuan overhead and operational expenses,” he said.
Leachon said this move would result to “better income for the government” as well as “increased efficacy and efficiency” for the resulting entity.
“More significantly, [it would] maximize the bank’s capabilities to become the largest bank in the country with the ultimate heart for farmers and SMEs (small and medium enterprises), which comprise 80 percent of Filipinos, for their increased livability as vital component for national development,” he said.
LBP said following the SONA that it would submit to Malacañang a plan detailing how it would help finance agricultural enterprises of local farmers.