DBP chairman claims proposed merger with Landbank ''a dangerous experiment''
The merger of the Development Bank of the Philippines (DBP) and the Landbank of the Philippines (LBP) is a “dangerous experiment”, DBP chairman Dante Tinga claimed Tuesday.
At a press conference, Tinga said that if the “superbank” that is a result of the merger fails, the government is at risk of becoming bankrupt and the economy could collapse.
“If there is only one state bank and that collapses, imagine what would happen to the economy. Here the conventional wisdom is in point. What does it say? Do not put all your eggs in one basket,” Tinga told reporters.
“Why rock the boat, so they say, if the boat is running smoothly? This proposed merger is a dangerous experiment,” he added.
Tinga said that the “superbank” would have assets worth P4 trillion.
“If it collapses, four trillion would go to waste. Why risk it?” he said.
The merger of the two state-owned banks would require an enabling law since they were both created by Congress, Tinga said.
In a statement, the DBP said the study conducted by the Governance Commission for GOCCs (GCG) on the merger was “legally erroneous, done with inordinate haste and encroaches on the mandate of the Office of the Solicitor General (OSG) and the Office of the Government Corporate Counsel (OGCC).”
It emphasized that the study was done in less than three weeks and concluded that President Ferdinand Marcos, Jr. could implement the merger without an enabling law.
Tinga argued that should the merger push through, DBP was more deserving to be the surviving bank due to its “richer legacy, more extensive experience and expertise, and better track record in development financing”.
“What is the record of Landbank, by the way? It’s a failure. It’s not been able to accomplish its mandate. The agrarian reform program is a failure. And we are suffering from low agricultural production. We don’t have food security,” he said. Jaspearl Tan/DMS