President Marcos Approves Merger of Land Bank and UCPB Finance Arms

MANILA — President Ferdinand R. Marcos Jr. has authorized the consolidation of the finance and leasing corporations of the Land Bank of the Philippines (LBP) and the United Coconut Planters Bank (UCPB). The executive order, numbered 65, was signed on August 6 and publicized this Friday, marking a significant reorganization within the government-controlled financial sector.

According to Philippines News Agency, the LBP Leasing and Finance Corp. (LLFC) will absorb the UCPB Leasing and Finance Corp. (ULFC), which has reportedly not met its operational goals as a government-owned or controlled corporation (GOCC). The Governance Commission for GOCCs (GCG) en banc supported the merger, noting that it would streamline operations and reduce redundancy between the two entities’ functions and mandates.

The executive directive specifies that LLFC will oversee the merger process in consultation with the GCG, ensuring that all assets and liabilities of ULFC are transferred under the terms approved by relevant regulatory bodies. The order outlines compliance with Republic Act (RA) 11232, or the Revised Corporation Code of the Philippines, and RA 10667, or the Philippine Competition Act, as essential to the merger process.

Additionally, the merger will include the transfer of all UCPB assets and liabilities to LBP, which encompasses its ownership shares in ULFC. Both LLFC and ULFC, which are attached to the Department of Finance, provide financial leasing services to businesses, particularly for equipment acquisition.

Executive Order 65 also mandates the creation and execution of an integration plan, directing the reorganization and possible absorption of qualified ULFC employees into LLFC. The LLFC board of directors is tasked with submitting a proposed reorganization plan within one year from the EO’s effectivity.

For affected ULFC personnel, the order permits the ULFC Board of Directors to offer a separation incentive package, referencing rates set under EO 150 from 2021, which regulates compensation and classification systems within GOCCs. The executive order took effect immediately upon its publication in the Official Gazette or a newspaper of general circulation.