The bill seeking to merge the Development Bank of the Philippines (DBP) and
Land Bank of the Philippines (LBP), with LBP as the surviving entity, has been
approved by the House of Representatives on third and final reading.
The merger is
deemed necessary to improve the financial operations as well as rationalize the
operations of the two banks and thus improve its competitive edge in the local
and global market in anticipation of the wave of foreign banks that will enter
the country once Asean integration takes place this year.
According to its website, Landbank's
total assets stood at P1.05 trillion as of end-2014. DBP's total assets as of
end-2014 stood at P467.5 billion. Per the Bangko Sentral ng Pilipinas, Landbank
was fourth largest Philippine bank as of December 2014 in terms of assets while
DBP ranked sixth. Private banks BDO, Metrobank and BPI still topped the ranking
for total assets.
The merger,
if approved by President Aquino, will produce a financial institution with
approximately P1.32 trillion in assets, which is higher than the assets of
Metrobank and BPI.
While the merger is considered by some as
a "strategic move" that will allow the LandBank to become competitive
in the banking sector, others contend that the proposed merger would not be in the best interest of the government or
of the nation at large.
In the first
place, if LBP and DBP are among the most profitable financial institutions in
this country, why is a merger being pushed to create a “more financially
viable” financial institution?
Moreover, LBP
and DBP are two different types of financial institutions. LBP is a
commercial bank
even as it has a special focus on serving the needs of farmers and fishermen.
The DBP, by its very nature, is a development bank. A
commercial bank deals with depositors’ funds and must operate like a fiduciary.
A development-oriented financial institution, on the other hand, operates with
government equity funds and can undertake various development activities.
And what
would happen to the 390 employees (220 from LBP and 170 from DBP), who will be
left jobless by the merger? Does the payroll savings justify giving the boot to
390 people whose families depend on them for sustenance? -end-
Walang komento:
Mag-post ng isang Komento