The Governance Commission submitted its legal study for the merger of Landbank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) without need for legislative action.
The study aims to resolve the legal issues raised by the DBP Chairman and the Department of Finance (DOF) Secretary in a sectoral meeting held in the Office of the President.
DBP Chairman posited that both banks were statutorily created and must therefore be merged through legislation while the DOF Secretary was of contrary legal position.
“In order to resolve the issue, GCG sought answers through the provisions of statutes and applicable jurisprudence on the matter. Legal frameworks were 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 foregoing legal anchors empower President Ferdinand Marcos Jr. to implement the merger of the state-owned bank without waiting for Congress to file and pass related bills.
The resulting study showed that through R.A. 10149, GCG has the power to merge GOCCs which the Supreme Court affirms in its ruling 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 the details of the procedure provided under the said 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 GOCCs’ performance.