By Chino S. Leyco
The Land Bank of the Philippines will buy the Philippine Postal Savings Bank (Postbank) with plans to transform the state-run thrift lender into a bank catering to overseas Filipino workers (OFWs), a ranking government official said.
Finance Secretary Carlos G. Dominguez III said that Land Bank, the country’s fourth largest bank in terms of assets, will buy Postbank from another government-owned firm Philippine Postal Corp. (PHLPost).
“They told me it would take 11-months,” Dominguez said when asked about their timetable for the buyout. “It [Postbank] will just be operated as a wholly-owned subsidiary [of Land Bank], and it will be serving the OFW market.”
Postbank will undergo rebranding and may require additional capital infusion from the national government, the finance chief disclosed.
“They have to beef up the bank. It’s like giving your child some money, but it’s still yourself,” Dominguez said.
He believes Postbank could better compete with other private banks catering to overseas Filipinos because of its “very good tie-up” with the PHLPost.
The oversight body for government-owned or -controlled corporations (GOCCs) earlier proposed that Postbank be absorbed by Land Bank or Development Bank of the Philippines (DBP).
But Dominguez said Land Bank is the only government owned lender allowed to absorb the Postbank.
“We don’t have any other universal bank to do it, DBP is not a universal bank,” he explained.
When the Durterte administration took office in July, Dominguez initially wanted to pursue the sale of Postbank along with other government shareholdings in United Coconut Planters Bank (UCPB).
Data from the Bangko Sentral ng Pilipinas (BSP) showed that Postbank’s total assets stood at R12.07 billion as March this year.
Established in 1906, the Postal Bank was closed down in 1976 as a result of competition with privately owned banks, but was reopened in 1994 pursuant to the provisions of Republic Act No. 7354, the charter of the Philippine Postal Corp.
The proposal to absorb the operations of Postbank comes after Governance Commission on GOCCs abandoned a plan by the previous administration to merge the Land Bank and DBP.
In September, GCG resolved to cancel the implementation of Executive Order No. 198 issued by former President Benigno S. Aquino III earlier this year that green-lighted the DBP-Land Bank merger.
Dominguez earlier said he was thumbing down the planned Land Bank-DBP merger as it would not serve the public interest to transform the two institutions into one, given their different functions.
He noted that the Land Bank serves the agriculture sector, while the DBP takes care of the needs of industry.
Tags: Finance Secretary Carlos G. Dominguez III, Land Bank of the Philippines, Land Bank to buy Postbank which will service OFWs, manila bulletin, mb.com.ph, Philippine National Police, Philippine Postal Savings Bank