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Governor of the Bangko Sentral ng Pilipinas (BSP), Felipe Medalla, said that the government-owned Land Bank of the Philippines (Landbank) and Development Bank of the Philippines (DBP) would merge as planned.

“The choice has already been made. In response to Monday’s inquiries from the Philippine News Agency (PNA), he said, “It must be put into practice.

Benjamin Diokno, the finance secretary, stated last week that the banks would be officially consolidated by November of this year. Malacanang will issue the necessary Executive Order (EO) this month.

The President Ferdinand R. Marcos Jr.-approved merger is anticipated to create a stronger bank with total assets of around PHP4.18 trillion, a deposit base of about PHP3.59 trillion, and yearly savings for the government of roughly PHP975 million.

Savings are thought to result from merging the banks’ branches, with DBP becoming part of Landbank due to its bigger capitalization of about PHP800 billion and a larger number of branches nationwide.

A member of the Monetary Board (MB), which sets policy, supports the proposed merger of the two government financial institutions (GFIs) after pointing out that Philippine banks, even the major ones, are smaller than their regional equivalents in several nations.

Our banks are tiny. There is a justification for having stronger, bigger banks, according to MB Bruce Tolentino, who made the statement over the weekend while speaking on the sidelines of the business journalism seminar that the Economic Journalists Association of the Philippines (EJAP) and San Miguel Corporation (SMC) jointly held.

DBP stated on Monday that it is “pending an appeal with the Office of the President on the results of the legal study conducted by the Governance Commission for GOCCs (GCG).”

“DBP reiterates that GCG’s legal analysis focused solely on the appropriate merger mode. The appropriateness of a merger was not covered. In actuality, no merger recommendation had been made, according to the GCG’s assertions. According to DBP, the GCG’s legal authority is at most advisory and in no way binds any government body, the statement stated.

The GCG had stated that no Congressional action is required, but the DBP stated that it “requires action” on the part of Congress to proceed with the proposed merger.

The statement stated that the bank “shall zealously exhaust all available means to ensure that all issues and concerns are properly threshed out and effectively addressed in the proper and legal forum.”

“DBP is confident that President R. Marcos Jr. will listen to the clamor of the people and follow the proper and legally-mandated process to protect and advance the welfare of the banking industry and the country in general,” the company continued.

GCG previously stated that it had provided the Office of the President with the findings of legal analysis on the proposed merger and has discounted the requirement for legislative action to make it happen.

Justice Alex Quiroz, the head of the GCG, stated in a statement that they “sought answers through the provisions of statutes and applicable jurisprudence on the matter.”

He said that the study’s findings demonstrated that the GCG has the authority to consolidate GOCCs under Republic Act 101499, also known as the GOCC Governance Act of 2011, which the Supreme Court upheld in its decision in Lagman v. Executive Secretary.

Since the Aquino administration, there has been talk of merging the two government-owned banks.

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