The merger of state-run Land Bank of the Philippines and Development Bank of the Philippines will proceed unhampered by a leadership change in June, a government official said Thursday.
The two lenders will submit a business plan to the Bangko Sentral ng Pilipinas for approval and hire a consultant to oversee the merger before President Benigno Aquino steps down in two months, said Cesar Villanueva chairman of the Governance Commission for Government-Owned and Controlled Corporations.
Once combined, Land Bank and DBP will be the Philippines' second largest bank with combined assets of P1.6 trillion, behind BDO Unibank which has P1.8 trillion and ahead of Metrobank with P1.37 trillion.
Villanueva said the merger would increase access to loans for agriculture and development projects and entice competing banks to open similar credit lines.
"That makes the whole banking industry, as well as the economy better off with having a a good government bank that has social mandate as one of its foremost objectives," he said.
Under an executive order signed by Aquino in February, the merger has to be completed within a year.
"We are adhering closely to the one-year period under the executive order," Villanueva said.