The merger of government-controlled banks Land Bank of Philippines (Landbank) and United Coconut Planters Bank (UCPB) will expand and increase funding for the agricultural sector, said Landbank in a statement.

Landbank president and CEO Cecilia C. Borromeo said the combining of two large banks’ resources will benefit the country’s farmers and fisherfolk because it will be better capitalized and could expand its 722 branches to service the agricultural sector.

Landbank president and CEO Cecilia C. Borromeo

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

Borromeo said the bank’s management expertise will also add support to UCPB to better protect the interest of coconut farmers by providing them with more financial services.

“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 said.

President Duterte’s Executive Order No. 142 ordered Landbank and UCPB to enter into a merger applicable to government-owned and -controlled corporations and recognized by regulatory agencies. The bigger of the two banks, Landbank, will be the surviving entity after the merger. The bank is currently the country’s second biggest bank in terms of assets and deposits.

Borromeo said Landbank’s track record show its compliance with the Agri Agra Law to “empower not only the farmers but all workers in the agriculture sector” and that the merger with UCPB will also unify the two banks to better serve coconut farmers and the agribusiness sectors.

Under the Agri Agra law (Republic Act No. 10000) banks are mandated to lend 15 percent of its loanable funds for agriculture and 10 percent to agrarian reform beneficiaries. As of end-2020, Landbank’s agriculture loans accounted for 76.95 percent of its total loan portfolio while its agrarian reform lending is 11.52 percent.

The bank’s agriculture lending as of end-May this year have reached P230.02 billion, higher year-on-year from P229.29 billion. So far, 2,734,572 farmers and fisherfolk have borrowed funds from Landbank in May, about 31,323 more than April’s 2,703,249.

UCPB Officer-in-Charge (OIC) Liduvino Geron said, the merger of the two banks will enable UCPB and its clients to “benefit from the strength, stability, scale and reach” of the larger financial institution.

“This also allows us to pursue our original mandate to serve coconut farmers nationwide while providing a wider range of products and services to our clients composed of individuals, private and government institutions, middle-market companies, and small enterprises nationwide,” he said.

Source: Manila Bulletin (