De Lima wants to investigate proposed Landbank-UCPB merger – Manila bulletin
Senator Leila de Lima urges the Senate to examine the validity of the reported proposed merger of two state-owned banks, the Landbank of the Philippines (Landbank) and the United Coconut Planters Bank (UCPB), as well as the anomalies that could arise if the plan government is implemented.
De Lima noted that the transactions were said to have been carried out on questionable terms and conditions, and with serious apprehension and warning from a credible credit rating agency.
The senator said the Senate must ensure that the rights of coconut farmers as well as Filipinos, who are served by the Landbank, are not unduly compromised by the merger.
“It is for the Senate to determine whether the absorptive capacity of the Landbank would allow it to assume the responsibilities and obligations of the UCPB without, or at least with very minimal impact, on the Filipinos its charter intends to serve and serve, ”De Lima said in Senate Resolution No. 771.
“The contrasting mandates of Landbank and UCPB should be reason enough to question, if not immediately demand, the closure of the merger process, as the government did when it halted the merger process involving DBP and Landbank in 2016, ”added the senator. .
On June 25, Executive Secretary Salvador Medialdea signed Executive Decree (EO) 142 ordering the merger of Landbank and UCPB.
However, an analysis by the US agency Fitch Ratings showed that the Landbank-UCPB merger may have a “negative impact on Landbank’s credit profile” and inevitably harm the financial health of the former given the fragile financial situation of the country. second.
The U.S. financial agency said UCPB’s bad debts in the amount of 22 billion yen in 2020 are among the biggest threats to the merger.
He also noted that the merger could exacerbate the asset quality pressures that Landbank is already under siege with due to the current economic downturn.
De Lima said it was imperative for the government to protect the public from disadvantageous negotiations, agreements and arrangements of financial institutions, especially those owned by the state, by strengthening existing laws and exercising its oversight functions to prevent financial institutions to engage in washing sales. .
“Landbank’s charter obliging it to prioritize the banking needs of the Land Reform Program and other rural groups, including fishermen, as well as meeting the needs of OFW (Filipino Overseas Workers) , he should not be distracted from it to the possible detriment of those people whose well-being is at stake. UCPB’s mandate is clear: to serve Filipino coconut farmers, ”she said.
“Their interests should not be entangled and inevitably sidelined by executive decree when the evidence is indisputable only with the conflicting mandates of these two institutions and the already overwhelmed clients of Landbank who are still reeling from the impacts of pandemics. , it would not be prudent to proceed with the said merger, ”she stressed.
She said it is only appropriate for Congress to consider the possible drawbacks and negative implications of such mergers.
“Because at the end of the day, we can’t allow our farmers, who need to be served, to be taken a tour of these banks,” she said.
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