Philippine’s Landbank Announces Merger with UCPB

Philippine government-controlled lender the Land Bank of the Philippines (Landbank) announced on June 29 that it is going to merge with the United Coconut Planters Bank (UCPB). The merger will strengthen government efforts to build a stronger, unified banking institution capable of serving coconut farmers and other workers in the agricultural sector.

According to Cecilia Borromeo, President-CEO at Landbank and former scholar of the Philippine Coconut Producers Federation, Inc. (COCOFED), the merger will promote unprecedented rural development, and enables coconut farmers to leverage the established expertise of Landbank in lending to the agriculture and agribusiness sectors.

Republic Act No. 10000 mandates banks to allot 15 percent of their total lending portfolio for agriculture loans and 10 percent of its total loanable funds to agrarian reform beneficiaries. The proportion of Landbank’s agriculture loans of its total loan portfolio is far larger than the requirement.

"Our goal is to ensure that we are able to efficiently manage and protect government resources in these banks for the ultimate benefit of the Filipino people. With the merger, we will be in a better position to grow our loan portfolio in order to meet the needs of the people, especially the unbanked and underserved Filipinos,"she stated.

She added that the proposed merger would also be beneficial to existing UCPB clients because they could access the bigger branch and ATM (automated teller machine) network of Landbank and would be able to avail of a wider range of products and services such as the Landbank digital banking service.”

Under Executive Order No. 142, President Duterte ordered the Landbank and UCPB to enter into a merger applicable to government-owned and -controlled corporations (GOCCs) and recognized by regulatory agencies.

Landbank, the biggest public sector bank in the Philippines, will be the surviving entity under the merger. Once the merger is concluded, Landbank will remain as the industry’s second biggest bank in terms of assets and deposits.