The Governance Commission submitted its legal study on the merger of Landbank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) without need for legislative action.
The study sought to resolve the legal issues raised by the DBP Chairman and the Secretary of the Department of Finance (DOF) in a sectoral meeting held at the Office of the President.
The DBP chief said the banks were statutorily created and must therefore be merged through legislation while the DOF Secretary held a contrary legal view.
“In order to resolve the issue, GCG sought answers through the provisions of statutes and applicable jurisprudence on the matter. Legal frameworks are an important point of reference such as Section 5(a) of Republic Act No. 10149 (R.A. 10149); Lagman v. Executive Secretary; Section 17, Article VII, 1987 Constitution; and Section 2, Chapter 2, Book III, Administrative Code of 1987,” Chairperson Justice Alex L. Quiroz said.
The preceding legal anchors empower President Ferdinand Marcos Jr. to implement the merger of the state-owned banks without waiting for Congress to file and pass legislation.
The resulting study showed that through R.A. 10149, the GCG has the power to merge GOCCs that even the Supreme Court affirmed in Lagman v. Executive Secretary.
“The GCG, pursuant to memorandum Circular 2015-03, has the power to ascertain the manner of the merger—either De Jure Merger or De Facto Merger,” chairperson Justice Quiroz added.
The study includes details of the procedure provided under the GCG memorandum circular.
The GCG remains steadfast in its mandate as the central advisory, oversight, and monitoring body for GOCCs, to institutionalize transparency, accountability, financial viability and responsiveness in corporate performance by monitoring and evaluating GOCC performance.
