NextGen Day

The state-owned Land Bank of the Philippines (Landbank) and the Development Bank of the Philippines (DBP) are considering merging, which is projected to save the government roughly PHP5 billion yearly.

“The anticipated operating cost savings as a result of the combination (may) total at least PHP5.3 billion annually. Therefore, PHP20 billion over the following four years at least said Finance Secretary Benjamin Diokno during a press conference at the Palace on Tuesday.

He added that earlier in the day, President Ferdinand R. Marcos Jr. presided over a sectoral meeting where the data were given.

The proceeds from the sale of DBP’s redundant assets, including its head office in Makati, a building in Bonifacio Global City in Taguig City, many branches, and equipment and licenses, have not been included in the computation, according to Diokno, who claimed that the expected savings “are even understated.”

“Now, in light of recent financial developments abroad, the President stated a desire to unite the two to become the largest bank in the nation. The biggest bank is typically held by the state globally, and that is actually the best approach, he added.

Despite Landbank’s emphasis on the agricultural sector and DBP’s on industrial projects, Diokno claimed that because both institutions are universal banks, “they do practically the same.”

“There will be savings from the merger, and the amalgamated banks will be stronger. In fact, one possible result of this is that the interest rate they charge may be lower than (the current rates) charged by either of the two (banks) at the time,” he continued.

According to Diokno, Landbank is the larger of the two, with around 752 branches nationwide as opposed to DBP’s 147.

He said that after mapping these branches, “it’s possible that only 22 DBP branches will be kept as a result of the merger, and that Landbank’s goal is to have a branch in every LGU (local government unit) in the Philippines.”

Even under the previous administration, there were discussions about merging the two banks, but for a variety of reasons—including their mandates—this did not happen.

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