HomeForexAgri stakeholders oppose LANDBANK-DBP merger

Agri stakeholders oppose LANDBANK-DBP merger

SEVERAL former government officials are opposing the plan to merge Landbank of the Philippines (LANDBANK) with the Development Bank of the Philippines (DBP), saying it will further disenfranchise farmers and other agriculture stakeholders.

“Farmers, bank employees and other stakeholders are seriously concerned about this decision, which came about without any public consultations,” former Agriculture secretary Leonardo Q. Montemayor, former LANDBANK vice-president Pablito Malabanan Villegas, and CENTRO Saka, Inc. Executive Director Romeo C. Royandoyan said in a statement.

They noted the government can streamline the two state-run banks and boost their operations without a merger.

LANDBANK and DBP were created under separate laws and given mandates “to perform specific missions to achieve balanced national socioeconomic and agro-industrial development,” they said.

There may be a need to pass a bill amending the existing charters of LANDBANK and DBP to pave the way for a merger, Messrs. Montemayor, Villegas and Royandoyan said.

“All this will cause uncertainties, delays and other unwanted consequences in the operations of LANDBANK and DBP,” they said.

Earlier this week, Finance Secretary Benjamin E. Diokno said President Ferdinand R. Marcos, Jr. approved the plan to merge LANDBANK and DBP, which would create the country’s biggest bank in terms of assets. The merger is expected to be completed before the end of the year.

LANDBANK, which has 752 branches nationwide, will be the surviving entity. DBP currently has 147 branches, but only 22 branches will be retained after the merger, Mr. Diokno said.

Messrs. Montemayor, Villegas and Royandoyan said that since LANDBANK became a universal bank through a 1970s presidential decree, “its commercial operations have dwarfed loans to small farmers and rural entrepreneurs.”

“Many of them complain of great difficulty in accessing LANDBANK’s services. They are unconvinced that the merger — with LANDBANK as the dominant entity — will make a major difference for them,” they said, noting that the lender has veered from its principal duty of servicing small agricultural producers.

“Merged or not, it will be hard pressed to deliver on the current administration’s goals of food security, farmers’ prosperity and poverty reduction.”

Citing concerns of small farmers and fisherfolk, they said any new laws should ensure the two banks will adhere to their original mandates.

“The main rationale of the planned merger appears to be “bigger is better,” they said. “But our question is: better for whom?”

LANDBANK was created to serve agrarian reform beneficiaries and other agriculture stakeholders, including micro, small, and medium enterprises.

DBP, meanwhile, was formed to focus on development-oriented investments and participate in public-private partnerships.

Mr. Diokno earlier said the merger of the two banks would lead to retrenchment of workers. He said the government would offer an attractive package to those who will lose jobs.

Messrs. Montemayor, Villegas and Royandoyan said the planned merger may create more disunity and disenfranchisement due to the layoffs.

“Cost savings can be a function of improved management — even without the merger. They need not entail the laying off of employees,” they said.  “Instead, management should concentrate on retooling/retraining them and removing the excess fat at the head and regional offices. The latter should be reassigned at the grassroots and countryside, where their financial and technical services are critically needed.”

They warned that if left unaddressed, the concerns may “morph into social discontent,” which would affect services for farmers and fisherfolk “who — with little or no access to credit, technology and markets — are further caught in the unmitigated cost-price squeeze in an uneven economic playing field.” 

Emy Ruth G. Gianan, who teaches economics at the Polytechnic University of the Philippines, said the government should view any merger plans “with caution, especially given the differences in mandates of both development banks.”

“The ultimate loser would always be their supposed constituents, if not thought out effectively,” she said in a Facebook Messenger chat. — Kyle Aristophere T. Atienza

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