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April 12, 2024

DOF abandons Landbank-DBP merger plan

The Department of Finance (DOF) said it is abandoning the proposed merger between state-run lenders, Land Bank of the Philippines and Development Bank of the Philippines (DBP).

Finance Secretary Ralph Recto disclosed the decision during an interview with journalists at the sidelines of the Bureau of Customs’ 122nd-anniversary celebration in Manila. Recto clarified that the plan to merge the banks, with Landbank as the surviving entity, was scrapped.

Recto said that since there was no resolution formally merging the institutions, there is no necessity for a resolution to annul the merger. “There was no resolution merging it, so there is no need for a resolution scrapping it,” he said.

The proposed merger, initially supported by former Finance Secretary Benjamin Diokno, aimed to establish the largest bank in the country, with estimated assets exceeding P4 trillion.

Recto, however, underscored the importance of retaining two government depository banks, citing their distinct mandates. “Their mandates are totally different, so I think we are better off with two of them,” he said

DBP previously expressed opposition to the merger, asserting its intent to exhaust all legal remedies to prevent it. The bank submitted its appeal to the Office of the President, while the Governance Commission on GOCCs (GCG) clarified that it had not reached a final determination on the formal merger.