President Duterte has approved the merger between the Land Bank of the Philippines (LBP) and the United Coconut Planters Bank (UCPB) to “strengthen capability to deliver financial services” to coconut industry and the agricultural sector.

In his virtual media briefing, Presidential spokesperson Harry Roque said the President signed Executive Order No. 142 approving the merger of the two government financial institutions.

“Ang Landbank po ang magiging surviving entity (The Landbank will be the surviving entity),” Roque, a lawyer, said.

Executive Secretary Salvador Medialdea, by authority of the President, signed the order on June 25.

Under EO 142, Duterte stated the merger will contribute to “economic sufficiency, foster countryside development, and financial inclusion, and promote stability in the country’s banking system.”

“The plans and projections for the intended merger of LBP and UCPB assume, as one of their premises, that the operational merger between LBP and the Development Bank of the Philippines, previously approved in 2016, will no longer be pursued,” his order read.

To implement the merger, the Chief Executive said the two government banks shall prepare and implement an integration plan and reorganization.

LBP and UCPB personnel who will be affected by the merger shall be entitled to separation incentives and benefits.

The same EO also directed the acquisition by the LBP of the Special Preferred Shares of the Philippine Deposit Insurance Corp. (PDIC) in the UCPB.

“The LBP shall acquire the outstanding Special Preferred Shares held by the PDIC in the UCPB, taking into account the recovery of PDIC’s financial assistance to the UCPB, the valuation of the shares by the PDIC and LBP for this purpose, and the LBP’s return on equity,” it said.