President Ferdinand "Bongbong" Marcos Jr. is keen on merging the Development Bank of the Philippines (DBP) and the Lank Bank of the Philippines (Land Bank), which he called as a game changer amid recent financial developments abroad.

Marcos presided over a meeting with the economic team on Tuesday, March 28, to talk about the proposal to merge the two banks, which was first pitched during the time of former president Gloria Macapagal Arroyo and was approved towards the end of former president Benigno "Noynoy" Aquino's term.

According to Malacañang, Marcos believes that the long-time unimplemented merging proposal "aims to have a more robust and competitive bank that will provide better and more accessible financial services for Filipinos."

Merging the two banks "will now become the number 1 bank in the Philippines aside from Banco De Oro in terms of asset," Diokno said in a Palace briefing.

"Now, the President expressed the desire to merge the two, to make it the biggest bank of the country because of the recent financial developments abroad. And  that’s really the best practice. The biggest bank is usually owned by the state, globally," Diokno said.

"As you know, this merger has been approved during the time of President Aquino through the GCG. It was not implemented. It was taken up during Duterte's term, it was also not implemented. But given what is happening now globally, you have banks which are now being closed...So there's really a strong need for solidifying the government bank," Diokno further said.

The Finance chief also stressed that the move will not be taken because "the current system is broken but as policy makers, we have to constantly seek better ways of doing things."

He said Marcos, however, raised concern over the termination of services provided by either bank during the process of merging.

"We assured him that with the merger, because both the Land Bank and DBP are universal banks, they do almost the same, except that one is focused on agriculture and the other one industrial projects, but they do practically the same," Diokno said.

Diokno, however, said as a result of the merger, only 22 branches of DBP will be retained while Land Bank will have a branch in all local government units (LGUs) in the country.

At present, Land Bank has 752 branches while DBP has 147 branches.
Employees will lose jobs

While the proposed merger is deemed advantageous for the country, it will cause loss of jobs for many government employees.

Diokno said some employees will lose their jobs due to redundancy of roles.

"Definitely may mawawalan kasi (some will lose their jobs) there's redundancy and then mare-reduce yung number of branches but there's usually a package naman ibibigay, voluntary, and they can choose to retire. Since they are government officials, they can retire under GSIS or we will offer an attractive package for those who will be separated," Diokno explained.

There is still no estimate on the number of employees who might lose their jobs due to the merger.