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April 12, 2024

Recto eyes public listing for Landbank, DBP following shelved merger

The Department of Finance (DOF) is studying the possibility of publicly listing Land Bank of the Philippines and Development Bank of the Philippines (DBP) subsequent to the abandonment of their planned merger.

Finance Secretary Ralph G. Recto disclosed to the Manila Bulletin on February 14 that informal discussions commenced on the potential initial public offering (IPO) of these two government-owned banks.

Recto acknowledged that pursuing an IPO for state-owned entities would require legislative action, but expressed openness to the idea, stating, “that’s an idea worth considering.”

An IPO entails a private company offering its shares to the public for the first time, facilitating its listing on the Philippine Stock Exchange.

“There have been informal discussions about it. But no decisions have been made so far,” Recto clarified, indicating the necessity for further consultations.

He said the public listing of Landbank and DBP would contribute to the development of the local capital market.

The DOF chief confirmed on Tuesday that the proposed merger of Land Bank and DBP is no longer under consideration.

“Their mandates are totally different, so I think we’re better off with two of them,” Recto explained, as he addressed reporters.

Former Finance Secretary Benjamin E. Diokno had proposed the merger to create the largest bank in the Philippines, with an estimated asset size of about P4.18 trillion and a deposit size of P3.59 trillion.