Enrile questions UCPB-Land Bank deal

Enrile questions UCPB-Land Bank deal

THE chief lawyer of President Ferdinand R. Marcos, Jr. questions the planned merger of the Land Bank and UCPB- two of the biggest government-owned and controlled corporations.

The Marcos administration is pursuing plans to merge state-controlled lenders Land Bank of the Philippines or Land Bank and Development Bank of the Philippines (DBP).

The deal said could potentially create the country’s largest banking entity with combined assets of about P3.8 trillion.

And several reports say that Finance Secretary Benjamin Diokno had begun the groundwork to merge the two banks.

First, by submitting a draft proposal to the Governance Commission for GOCCs (GCG), which is mandated to police government-owned and controlled corporations (GOCCs).

But why would the government intend to push the plan?

The union of the two government banks is seen to unlock efficiency that will benefit the government-corporate sector.

It also generates more low-cost deposits and reduces funding costs.

But, the President’s Chief Lawyer is adamant about the deal as it needs a deeper study should it will be implemented.

“How do you merge the balance sheet of the UCPB and the balance sheet of the Land Bank? How do you treat the stockholders of UCPB and the stockholders of Land Bank?” said Sec. Juan Ponce Enrile, Chief Presidential Legal Counsel.

Both DBP and Land Bank are among those eyed to provide seed money to the government’s proposed sovereign wealth fund called Maharlika Investment Fund.

Both are profitable entities, with Land Bank booking a net income of P30.1 billion last year and DBP chalking up P5.61 billion, up by 38.2 percent and 50 percent, respectively, from their levels in 2021.

The Marcos administration is keen for the Philippines to have its sovereign wealth fund as an alternative source of money to support big-ticket government projects.

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