INQUIRER FILE PHOTO
MANILA, Philippines — The proposed merger of state-run banks Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (Landbank) can only be done by congressional action, and not by mere executive order (EO), Albay Rep. Edcel Lagman said in a statement on Sunday.
“The proposed merger of DBP and [Landbank] necessitates the amendment of their respective charters by Congress,” Lagman, an independent opposition and a veteran lawyer, said.
“Only Congress can grant legislative charters to operationalize (government-owned and -controlled corporations or) GOCCs, amend their charters, or abolish or merge GOCCs,” he said. “Only Congress can amend or repeal statutes.”
The DBP was created under Republic Act No. 2081 while the Landbank was established by RA 3844, “they have separate legislative mandates,” the lawmaker said.
He emphasized that “the projected merger (of DBP and Landbank) cannot legally be effected by a mere executive order.”
“Legislative enactment, not executive fiat, is mandatorily required to operationalize the proposed merger of DPB and Landbank,” he concluded.
Lagman’s legal opinion contradicted that of the Governance Commission for GOCCs (GCG), which reported to Malacañang last month, that no new law would be required for the merger.
Congress inquiry welcomed
But the GCG later clarified that it had not reached a decision on the plan and welcomed a congressional inquiry on the matter.
The GCG opinion was apparently based on the Landbank merger with the United Coconut Planters Bank (UCPB), also a government bank, that took effect last year via EO 142, signed by former President Rodrigo Duterte on June 25, 2021.
As a result of the Landbank-UCPB merger, Landbank became the second-largest bank with the two banks’ combined assets amounting to P2.9 trillion.
So far, even displaced employees welcomed the Landbank-UCPB merger and have not legally contested the manner of the merger because of the generous separation packages they received.
But that is not the case in the Landbank-DBP merger because DBP workers have been worrying about their jobs and compensation since the first attempt to merge DBP with the Landbank.
Former President Benigno Aquino III tried to merge the banks via EO 198, which he signed on Feb. 4, 2016, or less than four months before the end of his term.
His successor, Duterte, stopped the merger apparently in deference to the Landbank-UCPB merger.
Now, the DBP Employees Union, led by its national president Charles Coronejo, declared that a new law is required to amend the DBP’s charter and spell out the terms of the merger.
According to Finance Secretary Benjamin Diokno, President Marcos has approved the merger and Diokno expects it to be completed by November. The Palace, however, has not even announced the signing of an implementing executive order.
At least two senators, Senators Risa Hontiveros and Sherwin Gatchalian, have questioned Diokno’s apparent “rush” to merge the two banks when Malacañang has not even announced how the merger will be effected.
Hontiveros questioned why Diokno was rushing the merger if it would truly result in a more stable banking sector and improved services.
Gatchalian also wanted to know the details of the merger because it may divert funds from the agricultural sector.