Introducing Daphne V. Yu: A Beacon of Excellence in Luxury Residential Real Estate Daphne V. Yu, af...
The proposed merger between the state-owned Land Bank of the Philippines (Landbank) and the Development Bank of the Philippines (DBP) is expected to result in significant savings for the government. According to Finance Secretary Benjamin Diokno, the merger could lead to annual savings of around PHP5.3 billion, or at least PHP20 billion over the next four years.
During a sectoral meeting chaired by President Ferdinand R. Marcos Jr., Diokno presented the figures, stating that the projected savings may even be understated due to gains from the sale of DBP's redundant assets, including its head office in Makati, a property in Bonifacio Global City, branches, equipment, and licenses, which have not been included in the computation.
Diokno believes that merging the two banks will create the largest bank in the country, following the global trend of state-owned banks being the largest. Both Landbank and DBP are universal banks, with Landbank focusing on the agriculture sector, while DBP focuses on industrial projects. However, Diokno stated that they "do practically the same," making the merger a feasible move.
The Finance Secretary added that the merger would not only create savings but also result in a stronger bank. In fact, one potential outcome of the merger is that the interest rate charged by the new bank could be lower than the current rates offered by either bank.
Landbank is currently the larger of the two banks, with 752 branches nationwide compared to DBP's 147. After the merger, only 22 DBP branches will be retained, and Landbank will have a branch in all local government units (LGUs) in the Philippines.
It is worth noting that the idea of merging the two banks has been raised in the past administration but did not push through for several reasons, including their mandates. However, Diokno remains optimistic that the merger will be successful this time around, given the potential benefits it can bring to the government and the banking sector in the country.