May 29, 2023
Office of the President
Manila, Philippines
Dear _______:
This refers to our engagement with regard to your inquiry on the possibility of the merging of
Development of the Bank of the Philippines and Land bank of the Philippines.
Relative to said matter, you have shared the following information:
1) A sectoral meeting was held in the Office of the President on March 28, 2003, regarding
the “merging” of the Landbank of the Philippines and the Development Bank of the
Philippines. The purpose of merger is to create a single state-run financial institution which
would best serve the country’s developmental goals.
2) The Land bank of the Philippines (LBP) is a government-owned and controlled corporation
(GOCC) with an original charter defined under Republic Act. No. 3844.
3) Whereas, the Development Bank of the Philippines (DBP) is likewise a GOCC with an
original charter, established under Republic Act. No. 85.
4) That the Governance Commission for Government-Owned or Controlled Corporation
(GCG), through a submitted report to the Office of the President, confirmed that the merger
between the two-state owned banks does not need an enabling law, for there are existing
laws capacitating the president without the concurrence of the congress to implement the
said merger.
In case of a finding contrary to [information], this specific opinion shall no longer be material
and relevant.
Pertinent to the resolution of your concerns, we have identified the following legal issues:
1. Whether the Land bank of the Philippines and the Development Bank of the Philippines
may be merged without going through the Congress.
2. Whether the merger of the said banks can be made in accordance with the procedure under
the Corporation Code of the Philippines.
Allow us to discuss the said issues in the same order of presentation.
1. Whether the Land bank of the Philippines and the Development Bank of the
Philippines may be merged without going through the Congress.
[Answer]
2. Whether the merger of the said banks can be made in accordance with the procedure
under the Corporation Code of the Philippines.
In the case of Tetangco Jr. v Commission on Audit, it has been ruled that a GOCC may
be established either through an original charter or the general corporation law.
Moreover, Section 122 of the Corporation Code provides that "Any two or more
corporations organized under this Code may merge into a single corporation which shall
be one of the constituent corporations or may consolidate into a new single corporation,
which shall be the consolidated corporation."
Taking into consideration the aforementioned laws, given that Land Bank of the
Philippines and Development Bank of the Philippines are chartered GOCCs, not created
under the Corporation Code, section 122 of the Revised Corporation Code, which
specifically applies to merger and consolidation of corporations created under the said
code is not applicable. Thus, the procedure for merger outlined under the Corporation
Code of the Philippines cannot be used in the merger of the said banks.
In sum, we hereby conclude the following:
1. ___
2. The procedure for merger outlined under the Corporation Code of the Philippines cannot
be used in the merger of the said banks.
In view of the foregoing, the following steps need to be undertaken:
1. [1st Step]
2. [2nd Step]
Once said steps are completed, you may decide to avail any of the following remedies:
1. [1st Remedy]
2. [2nd Remedy]
Should you wish to seek clarification of any item discussed herein, please do not hesitate to ask
us.
Thank you!
Very truly yours,
[Name]
Legal Counsel/s