MANILA, Philippines — Puzzled by Malacanang’s supposed rush to merge the Land Bank of the Philippines (LBP) with the Development Bank of the Philippines (DBP), opposition Senator Risa Hontiveros on Tuesday asked the Senate to look into the planned merger.
Hontiveros sought a probe through Senate Resolution No. 570, citing potential economic risks and legal issues surrounding a proposed merger.
“As the two banks merge operations, it is possible that certain jobs will be eliminated or reduced in size. It will negatively affect employee morale and job satisfaction,” she said in a statement.
“Changes in leadership, organizational structure, and company culture can create anxiety. Employees should not carry the burden of job uncertainty and financial hardship that will result from this merger,” the senator continued.
In the resolution, Hontiveros also cited the coconut farmers’ fears that the impending merger would make it “even more difficult for the beneficiaries to access support from the fund and will further dilute the mandate of the LBP to assist Coco Levy beneficiaries.”
It likewise noted the “legal objections” raised against the validity of such a merger with then Finance Secretary Carlos Dominguez III asserting that since the two banks were set up through legislation, only a law could legalize the merger.
“There is a need for the government to proceed cautiously and prudently vis-à-vis the contemplated merger, as well as clarify all legal issues involved, for the purpose of ensuring that this does not prejudice the country’s economy, the stability of the financial system, and the welfare of affected employees and depositors,” the resolution then said.
In the statement, Hontiveros urged Malacañang “to not rush the proposed merger and instead devote more time to analyze it extensively, consult with key stakeholders, and resolve not just the legal issues, but all the operational and personal issues voiced out by the employees and the small coconut farmers.”
Finance Secretary Benjamin Diokno said last month that the proposed merger could happen before the end of the year.
“Hindi ko maintindihan kung bakit minamadali. Sa paglalakad na ito ng matulin, ang mga empleyado ng dalawang banko at coco levy beneficiaries ang matitinik ng malalim. Hindi ba dapat ayusin muna ang mga isyu gaya ng non-payment of benefits o proper turnover bago umarangkada na naman sa panibagong merger?” she said.
(I don’t understand the rush. It will be the employees of the two banks and the coco levy beneficiaries who will suffer. Shouldn’t the issues such as non-payment of benefits or proper turnover be addressed first before jumping into another merger?)
The senator earlier warned that the LBP-DBP merger would result in a financial entity “too big to fail,” noting “one painful lesson from the 2008 global financial crisis—that large banks are riskier, and tend to introduce more systemic risk into the financial system.”