THE agricultural sector is expected to be the ultimate beneficiary of the slated merger of state-run banks Land Bank of the Philippines and United Coconut Planters Bank (UCPB), the two lenders said on Tuesday.
President Duterte earlier issued Executive Order 142, directing the completion of the merger of the two banks within the year.
Following issuance of the EO, the two banks issued a joint statement calling the move a “win-win” for coconut farmers and other agricultural workers in the country.
LandBank President and CEO Cecilia Borromeo said the merger will promote “unprecedented rural development,” especially for the underserved and unbanked sectors in the countryside.
“LandBank’s track record of being consistently compliant with the Agri Agra Law shows our commitment to perform our mandate, to empower not only the farmers but all workers in the agriculture sector,” she said.
UCPB Officer-in-Charge (OIC) Liduvino Geron also acknowledged that the scope and reach of LandBank will benefit existing UCPB clients.
“The merger enables UCPB and its clients to benefit from the strength, stability, scale and reach of LandBank,” Geron said.
“This also allows us to pursue our original mandate to serve coconut farmers nationwide while providing a wider range of products and services to our clients composed of individuals, private and government institutions, middle-market companies, and small enterprises nationwide,” the UCPB OIC added.
The merger is expected to yield a combined total of 722 branches and servicing units, including those in the provinces.
As of end-May 2021, LandBank’s loans to agriculture reached P230.02 billion, up from the P229.29 billion level in April.
The number of farmers and fishers assisted by the bank reached 2,734,572 as of May 2021, also up from 2,703,249 in April.
LandBank, the biggest public sector bank in the country, will be the surviving entity under the merger.
Once the merger is concluded, LandBank will remain as the industry’s second-biggest bank in terms of assets and deposits.
In EO 142, signed on June 25, 2021, Duterte said all concerned government agencies cited in the issuance must implement its provisions within six months from effectivity.
The merger will be done with LBP’s acquisition of Special Preferred Shares of the Philippine Deposit Insurance Corp. (PDIC) in UCPB worth P12 billion.
The transaction will give LBP 88.91-percent voting shares in UCPB.
“The merger of the UCPB and the LBP is hereby approved, with the LBP as surviving entity, subject to the requisite approvals from the Securities and Exchange Commission, and to the conditions and limitations under RA [Republic Act] No. 11524 and RA No. 11232 or the Revised Corporation Code of the Philippines,” Duterte said.
“All assets and liabilities of the UCPB shall be transferred to the LBP,” he added.
EO 142 allowed LBP to absorb the UCPB employees in its operations.
Personnel of LBP and UCPB who will be displaced because of the merger will be entitled to separation benefits from their respective employers.