President Ferdinand R. Marcos Jr. is seriously studying the proposed merger of the Landbank of the Philippines (LBP) and the Development Bank of the Philippines (DBP), which is in line with the administration’s thrust toward financial efficiency among state-owned banks, Finance Secretary Benjamin Diokno said on Tuesday.

“The President expressed the desire to merge the two to make it the biggest bank in the country because of the recent financial developments abroad. And that’s really the best practice, the biggest bank usually is owned by the state globally,” Diokno said in a press briefing in Malacanang.

“He expressed concern that in the process of merging, that none of the services provided by either bank will be lost and we assured him that with the merger—because both the Landbank and DBP are universal banks, they do almost the same, right, except that one is focused on agri, the other one on industrial projects,” Diokno said.

There will be savings as a result of the planned merger and the merged bank will be stronger, the Department of Finance chief said, adding that the likely outcome will be a lower interest rate.

The projected operating cost savings due to the planned merger, Diokno said, could reach at least Php5.3 billion each year or at least Phph20 billion in the next four years.

The DOF secretary said these figures are understated because they do not include revenues that can be derived from the sale of redundant DBP assets and various properties such as its Makati head office, BGC property, various branch properties, equipment and licenses, and income that can be derived from the proceeds of such sale.

In terms of number of branches, Landbank has 752 branches while the DBP has 147 branches based on recent mapping, Diokno said, noting only 22 DBP branches will be retained.

Part of the government plan is to put up Landbank branches in all local government units (LGUs) throughout the Philippines, which could be a combination of light branches or big branches and automated teller machines (ATMs).

“Ang advantage nito talaga is that we will be able to save a lot of money for the national government,” Diokno added.

Although Diokno admitted there would be job losses because of redundancy and reduction in the number of branches if the merger is finally approved, he said employees could opt to retire under the government pension system or accept a liberal package to be offered by the government.

The planned merger, based on the Finance secretary’s estimates, could happen before the end of the year. #