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LANDBANK-UCPB merger: a win-win for coconut farmers and other agri workers


June 29, 2021

 

The Land Bank of the Philippines (LANDBANK) has asserted that its upcoming merger with the United Coconut Planters Bank (UCPB) will strengthen government efforts to build a stronger, unified banking institution capable of serving coconut farmers and other workers in the agricultural sector.

LANDBANK President-CEO Cecilia Borromeo said that the merger will promote unprecedented rural development, in keeping with President Duterte’s goal of expanding financial inclusion among Filipinos, especially those in the countryside who belong to the underserved and unbanked sectors.

Borromeo, a former scholar of the Philippine Coconut Producers Federation, Inc. (COCOFED), said coconut farmers will be able to take advantage of the established expertise of LANDBANK in lending to the agriculture and agribusiness sectors.

“LANDBANK’s track record of being consistently compliant with the Agri Agra Law shows our commitment to perform our mandate, to empower not only the farmers but all workers in the agriculture sector,” she said.

Republic Act No. 10000, or the Agri Agra Law, mandates banks to allot 15 percent of their total lending portfolio for agriculture loans and 10 percent of its total loanable funds to agrarian reform beneficiaries.

As of December 2020, LANDBANK’s agriculture loans reached 76.95 percent of its total loan portfolio, significantly above the minimum requirement of 15 percent. Agrarian reform lending, meanwhile, hit 11.52 percent during the same period, also above the 10 percent required under the Agri Agra law.

LANDBANK’s agriculture lending has been consistently growing from PHP 222.05 billion in 2018, to PHP 236.31 billion in 2019, and PHP 237.62 billion in 2020.

As of end-May 2021, LANDBANK’s loans to agriculture reached PHP 230.02 billion, an increase of PHP 73 million net from the PHP 229.29 billion level in April 2021.

The number of farmers and fishers assisted by LANDBANK reached 2,734,572 as of May 2021, an increase of 31,323 from 2,703,249 in April 2021.

“With the merged resources of LANDBANK and UCPB, we can bring closer to the farmers our services, as we are able to tap a combined total of 722 branches and servicing units, including those in the provinces,” Borromeo said.

She added that 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 LANDBANK digital banking service.”

LANDBANK’s management expertise is also expected to provide support to UCPB, thus protecting the interest of coconut farmers in the would-be merged banks.

"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," Borromeo said.

“The merger will also mean better financial services for UCPB clients, especially those who are in the farm sector. For the clients of both banks, the merger will mean they can now rely on a stronger and better capitalized institution with solid government support,” she added.

On the part of the UCPB, Officer-in-Charge (OIC) Liduvino Geron said, “The merger enables UCPB and its clients to benefit from the strength, stability, scale and reach of LANDBANK. 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.”

Under Executive Order No. 142, President Duterte ordered the LANDBANK and UCPB to enter into a merger applicable to government-owned and -controlled corporations (GOCCs) and recognized by regulatory agencies.

LANDBANK, which is the biggest public sector bank in the country, will be the surviving entity under the merger.

Once the merger is concluded, LANDBANK will remain as the industry’s second biggest bank in terms of assets and deposits.


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