The merger plan for state-run Land Bank of the Philippines and Development Bank of the Philippines will no longer push through, Finance Secretary Ralph Recto said Tuesday.
“I think we’re better off with two government depository banks. Two members in the Maharlika Board. It’s as simple as we need two government depository banks. Their mandates are totally different so I think we are better off with two of them,” Recto told reporters on the sidelines of the 122nd Founding Anniversary of the Bureau of Customs.
“I don’t think there’s a resolution merging it so there’s no need for a resolution scrapping it,” he added.
The Duterte administration in 2016 stopped the planned merger of LandBank and DBP, which was approved by President Benigno Aquino III through Executive Order 198.
Former Secretary Benjamin Diokno, however, revived the planned merger of the two banks in March 2023.
The merger would have resulted in a bank with combined assets of P4.18 trillion as of December 2022 and generated savings for the government of P5.3 billion a year or P20 billion in the next four years.
Recto added that Landbank and DBP could continue their operations separately despite the contributions to Maharlika Funds.
“I think they’ll be fine. They’ll be okay,” he said.
Under the law, the National Government, DBP, and Landbank of the Philippines are mandated to provide the initial capital of the MIC, contributing P50 billion, P25 billion, and P50 billion, respectively.
The Maharlika Investment Fund Law was signed into law by President Marcos last July 18 with the Implementing Rules and Regulations taking full effect on Aug. 28, 2023.