NO merger will happen between the Development Bank of the Philippines and LandBank, DBP President and CEO Michael de Jesus told reporters at the Asean Editors and Economic Opinion Leaders Forum on Tuesday.
“It doesn't make sense to have a merger. The two banks have different mandates. Although there’s an overlap, putting the two together will not make it any stronger,” de Jesus said.
The idea for consolidating the two government-owned and -controlled corporations — which had been floated as early as 2005 — resurfaced following a report on Saturday by Rappler, which cited DBP’s P36.21-billion non-performing loan (NPL) exposure. The story noted that the “long-delayed proposals to merge DBP with LandBank are emerging not as a rescue measure, but as a step toward necessary modernization.”
“Our NPL has increased, but they’re fully reserved. So it won’t bring the bank down,” de Jesus said at the Tuesday forum.
The DBP chief had previously flagged the flood control corruption scandal to the bank’s higher bad loan ratio due to delays in contractors’ loan repayments.
Data showed that DBP’s gross NPL ratio slightly dropped to 7.05 percent last year from 7.68 percent in 2024.
“As a developmental bank, we take more risks. Sometimes we enter into deals. We serve as a catalyst. We enter into transactions where other banks don’t want to enter,” de Jesus said.
LandBank President and CEO Lynette Ortiz, meanwhile, said she “doesn‘t have any knowledge at all” on the merger plans.
To recall, former Finance secretary and now Executive Secretary Ralph Recto scrapped the planned merger of the two banks in 2024, saying it “will be good to continue having two government depository banks.”
In 2005, then-Finance secretary Margarito Teves first broached the idea of a DBP-LandBank merger.
After Teves’ successor, Cesar Purisima, formally proposed the merger, President Noynoy Aquino signed Executive Order 198 on Feb. 4, 2016, with LandBank as the surviving entity.
In the same year, the Duterte administration canceled the merger through a resolution by then-Budget secretary Benjamin Diokno and Finance secretary Carlos Dominguez III.
In March 2023, then-Finance secretary Benjamin Diokno renewed the merger proposal, citing the need for a stronger, “super“ bank. However, the plan was again canceled in February 2024 by Finance Secretary Ralph Recto due to legal challenges regarding the need for congressional approval and opposition regarding the distinct mandates of the two banks.
