Press Release
March 29, 2023

STATEMENT OF SENATOR RISA HONTIVEROS ON THE PROPOSED MERGER OF LANDBANK AND DBP

The government should proceed cautiously and prudently with respect to the contemplated merger of Landbank and DBP which, if implemented, would create the largest bank in the Philippines; perhaps resulting in a financial entity "too big to fail."

One painful lesson from the 2008 Global Financial Crisis is that large banks are riskier, and tend to introduce more systemic risk into the financial system.

The Landbank and DBP carry out separate, and distinct, mandates: the DBP serves industry by financing infrastructure, logistics, and commerce. The Landbank, on the other hand, has been the primary institution mandated by the State to finance the acquisition of land estates, and assist small farmers, fisherfolk, and ARBs, among others.

We have to understand exactly where the redundancies are and what efficiencies can be gained from this merger, and balance these against any risks that the merger may pose to the economy and financial system.

In 2016, this is why then-DBM Secretary Ben Diokno, together with DoF Secretary Dominguez, opposed the merger, when it was proposed at that time. What has changed since then?

The Governance Commission for Government-owned and -controlled corporations itself, the regulatory body established for the purpose of monitoring and exercising oversight over GOCCs such as the Landbank and DBP, has previously expressed doubts that the contemplated merger would produce a beneficial synergy.

These two institutions have very different mandates and very different client bases. Bakit ipagsasama ang dalawang banko na magkaiba ang misyon at layon?

The DBP, because of the nature of its mandate, has also been historically embroiled in controversies involving behest loans and other transactions tainted by undue influence and conflict-of-interest; isa na dito ang sinuri nating mga pasilidad na ipinatayo ng gubyerno para sa 2019 Southeast Asian Games. Do we want to risk these same issues affecting Landbank?

We need a bank that remains focused on agriculture because this is the sector that does not really interest private commercial banks. The merger may result in funds being diverted to the more bankable commercial and industrial sectors already adequately served by the private sector.

At the end of the day, what is this merger truly for? Bakit gagawin ito? Sino ba ang makikinabang dito? Certainly not the employees, whose jobs are suddenly at risk. I stand by the workers of the Landbank and the DBP who report that they have not been properly consulted about the merger. According to them, the personnel and operational issues from the Landbank and UCPB merger remain unresolved, and if this is true, these should be settled first before proceeding with this new merger.

I am also preparing a resolution, for filing at the soonest possible time, to urge the Senate to safeguard the stability of the financial sector by exercising oversight over the proposed merger.

[VIDEO PRESS RELEASE] Senator Risa Hontiveros on the proposed merger of Landbank and DBP
March 29, 2023
GOOGLE DRIVE LINK: https://drive.google.com/file/d/1N5UWW5D9zWeWJXHQQMNzxVSAeYDzc0u2/view


PAHAYAG NI SENADORA RISA HONTIVEROS SA PLANONG PAGSASANIB NG LANDBANK AT DBP

Dapat maging maingat ang gobyerno sa panukalang pagsasanib ng Landbank and Development Bank of the Philippines. Kung maipatutupad ito ay magkakaroon ng pinakamalaking bangko sa Pilipinas, at dahil malaki, malaki rin ang itinataya rito.

Nakita na natin noong Global Financial Crisis noong 2008 na ang malalaking bangko ay mas mapanganib, at may posibilidad na magpasok ng mas matinding systemic risk sa ating financial system.

Hiwalay at magkaiba ang mandato ng Landbank at DBP: ang DBP ay nagpopondo sa imprastraktura, logistics, at komersyo. Sa kabilang banda, ang Landbank naman ay inatasan ng Estado na tustusan ang pagkuha ng land estates, at tumulong sa maliliit na magsasaka, mangingisda, at ARBs.

Kailangan nating lubusang maunawaan kung ano ang pakinabang ng merger na ito at balansehin ito sa anumang panganib na maidudulot sa ating ekonomiya at financial system.

Noong 2016, ito rin ang dahilan kung bakit tinutulan ni dating DBM Secretary Ben Diokno, kasama si DoF Secretary Dominguez, ang ipinanukala ring merger. Mayroon bang nagbago mula noon?

Maging ang Governance Commission for Government-owned and -controlled corporations, ang regulatory body na nangangasiwa sa GOCCs tulad ng Landbank at DBP, ay dati nang nagpahayag ng pag-aalinlangan kung magiging kapaki-pakinabang ba ang merger na ito.

Ibang-iba ang mandato at kliyente ng dalawang institusyon. Bakit pagsasamahin ang dalawang banko na magkaiba ang misyon at layon?

Kung titingnan ang kasaysayan, nasangkot na rin ang DBP sa mga kontrobersya kaugnay ng behest loans at iba pang mga transaksyon na nabahiran ng undue influence at conflict-of-interest; isa na dito ang sinuri nating mga pasilidad na ipinatayo ng gubyerno para sa 2019 Southeast Asian Games. Gusto ba nating ipagsapalaran ang parehong mga isyung ito na nakakaapekto sa Landbank?

Kailangan natin ng isang bangko na nakatutok sa agrikultura dahil ito ang sektor na hindi sineserbisyuhan ng mga pribadong banko. Ang merger ay maaaring maglihis ng mga pondo patungo sa commercial at industrial sectors, na may sapat nang serbisyo mula sa pribadong sektor.

Sa huli, ang tanong ay para saan ba ang merge na ito? Bakit gagawin ito? Sino ba ang makikinabang dito? Siguradong hindi ang mga empleyado, na biglang nanganganib na mawalan ng trabaho. Kaisa ako ng mga manggagawa ng Landbank at ng DBP na nagsasabing hindi sila maayos na nakonsulta tungkol sa merger. Ayon sa kanila, hindi pa rin nareresolba ang mga personnel at operational issues mula sa Landbank at UCPB merger. Kung totoo man ito, sa palagay ko ito muna ang dapat ayusin bago ituloy ang merger.

Maghahain din ako ng resolusyon sa lalong madaling panahon upang himukin ang Senado na pangalagaan ang katatagan ng financial sector sa pamamagitan ng oversight sa mungkahing merger.

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