Landbank, UCPB merger to promote rural development, expand lending activities

·3 min read

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

Borromeo 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 10000, or the Agri Agra Law, mandates banks to allot 15 percent of their total lending portfolio for agriculture loans and 10 percent of their 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 P222.05 billion in 2018, to P236.31 billion in 2019, and P237.62 billion in 2020.

As of end-May 2021, Landbank’s loans to agriculture reached P230.02 billion, an increase of P73 million net from the P229.29 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.

Digital banking

“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 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.

“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 said.

On the part of UCPB, officer-in-charge 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 142, Duterte ordered the Landbank and UCPB to enter into a merger applicable to government-owned and -controlled corporations 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. (PR)