SENATE Deputy Minority Leader Risa Hontiveros filed a resolution seeking an inquiry into the proposed merger of the Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (LBP).
In filing proposed Senate Resolution 570, Hontiveros again raised concerns about the potential risks and benefits that it may bring to the economy, the stability of the financial system, and various stakeholders, including the employees of both banks.
She cited a 2014 study by the International Monetary Fund which found that large banks were at the center of the 2007 to 2008 Global Financial Crisis and that their distress caused damage to the real economy.
“Large banks were found to have lower capital, less stable funding, more market-based activities, and more organizationally complex than small banks, suggesting a distinct, possibly more fragile, business model,” she said.
She also mentioned the differences in the mandates of the LBP and the DBP.
“There is a need for the government to proceed cautiously and prudently vis-a-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,” Hontiveros wrote.
Right now, the senator said the issues surrounding the LBP and the United Coconut Planters’ Bank (UCPB) merger remain unresolved and coconut farmers have expressed that this impending merger will make it even more difficult for the beneficiaries to access support from the fund and will further dilute the mandate of LBP to assist Coco Levy beneficiaries.
Apart from this, she said the employees association and union of the LBP and DBP raised concerns about this plan, claiming that the LBP violated the terms of their Collective Negotiations Agreements by failing to consult with the unions beforehand.
Further, she mentioned various operational and personnel issues arising from the LBP’s previous merger with the UCBP remain unresolved.
In a statement, Hontiveros urged Malcanang not to rush the LBP-DBP merger, saying they should devote more time to analyze it extensively, consult with key stakeholders, and resolve not just the legal issues but all the operation and personal issues raised by employees and small coconut farmers. (GMA Integrated News)
