Finance Secretary Ralph Recto has expressed his preference to keep the Land Bank of the Philippines (Landbank) and the Development Bank of the Philippines (DBP) as separate entities rather than to merge the two banks.
Last year, there were plans to merge the two with Landbank to remain as the surviving entity.
“I think we’re better off with two government depository banks and two members in the Maharlika board,” Recto said on the sidelines of the Bureau of Customs’ anniversary celebration in Manila.
“Their mandates are totally different. So I think we’re better off with two of them,” he added.
Under the merger, the remaining bank was supposed to be the largest in the Philippines in terms of assets and deposit size.
The Landbank also previously remitted P50 billion to the Maharlika Investment Corp. for the Maharlika Investment Fund, while the DBP contributed P25 billion.
Asked if there’s any chance that the banks will struggle to meet the capital requirements sans the merger, Recto said: “I think they’ll be fine. They’ll be okay. If they have dividends this year, then those dividends can be part of retained earnings…. should be used to increase their capital anyway,” Recto said.
