PRESIDENT BS Aquino last February signed his executive order merging the Land Bank of the Philippines and the Development Bank of the Philippines. The merger creates a P1.6 trillion megabank (by Philippine standards) with the possibility of beating BDO. DBP will disappear. Only the Land Bank name will continue to exist. The merger makes LBP the second largest Philippine Bank, in assets, after BDO.
President Aquino says, “The merger of the DBP and the Land Bank will build a stronger and more competitive universal development bank able to fulfill its mandate of providing banking services to proper countryside development and contribute to sustainable and inclusive growth.”
This move is in line with BS Aquino’s penchant for BIGNESS, at the sacrifice of the small but essential institutions. We can see that the original aims of the Land Bank, when it was created during the Marcos regime — which is to help small farmers and agrarian reform beneficiaries — will become the last thing in the minds of the new gigantic LBP’s officials.
We can even see it dropping its originally most-important function — to be the depository of agrarian reform payments because doing that may interfere with the pursuit of growing bigger.
Senator Bongbong Marcos expresses opposition
We are glad that Senator Ferdinand “Bongbong” Marcos Jr. yesterday added his voice to the opposition to the merger. He said the merger will “further prejudice the country’s farming sector,” which, indeed, is already oppressed by the administrations lack of concern for it.
Interviewed in Cebu City over the Cebu Catholic Television Network (CCTN), Senator Marcos said the merger will deprive farmers of an agricultural bank whose specific mandate is to serve their needs.
“Sa pautang [on the matter of loans]we also have to think very hard about this Land Bank and DBP merger kasi kapag nag-merge na iyan [because after the merger], it will be a commercial bank. Wala na tayong agricultural bank, so wala na tayong bangko na talagang naka-tugon sa pangangailangan ng farmers [We will no longer have an agricultural bank so there will be no bank devoted to the needs of farmers],” he said.
Under present conditions, Senator Marcos observed, farmers already find it difficult, if not impossible, to obtain credit from banks and other financial institutions. So depriving them of a bank created specifically to address their needs will further worsen their condition.
Land Bank has claimed to be the “biggest credit provider to small farmers and fishers, local government units, and the biggest lender to microenterprises and SMEs among government financial institutions.” DBP, on the other hand, is tasked “to provide banking services principally to cater to the medium and long-term needs of agricultural and industrial enterprises with emphasis on small and medium-scale industries.”
But after the merger, some banking experts fear, the new and enlarged Land Bank, with assets second only to the largest bank, will have to aggressively expand, defend its rank, and end up being focused on profit-oriented activities. This means it would have to abandon the least profitable business activity of serving small farmers and agrarian reform beneficiaries.
Even Speaker Feliciano Belmonte, Jr. has been surprised by the merger. He wants Finance Secretary Cesar Purisima to explain why he pushed for the merger through an executive order rather than a law passed by Congress.
The answer to that is, of course, that Congress, particularly the House of Representatives, would never have passed any LBP-DBP merger law since most of the congressmen represent districts that are largely agricultural.
It was not a surprising move by an administration known to be sneaky.
We hope more people who count stand up like Senator Marcos and oppose this anti-farmer act of the Aquino regime and stop the merger from being carried out.