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SECTION 1
Declaration of Policy
SECTION 1.
Declaration of Policy.
There is a need to rationalize the operation of government agencies and government financial institutions (GFIs) to strengthen their financial capabilities, to improve the delivery of services, to achieve economic efficiency and to support the development thrust of the government. Towards this end, the State shall therefore:
a) Recognize the importance of strengthening GFIs in preparation for regional economic integration;
b) Encourage sustainable growth and development in capital and credit facilities of GFIs for the benefit and protection of the public;
c) Ensure that the social mandate of providing assistance to priority sectors, including farmers and fisherfolk, agrarian reform beneficiaries and SMEs, is continuously fulfilled, and that investments are amply protected.
SECTION 2
SECTION 2.
Operational Merger of the Development Bank of the Philippines and the Land Bank of the Philippines. The operational merger of DBP and LBP, through the transfer of assets and liabilities of DBP to LBP as the surviving entity, is hereby approved, subject to the written consent of the Philippine Deposit Insurance Corporation and approval of the Bangko Sentral ng Pilipinas (BSP). All reference to the terms "merger" or "merged banks," as used in this Order, shall be understood as referring to the above-stated operational merger.
SECTION 3
Increase in the Authorized Capital Stock of LBP
SECTION 3.
Increase in the Authorized Capital Stock of LBP.
As recommended by the DOF, the increase in the authorized capital stock of LBP to Two Hundred Billion (P200,000,000,000.00), divided into 2 billion common shares with par value of P100.00 per share, is hereby approved.
To allow LBP to continue supporting the government's sustainable and inclusive growth agenda, the DOF and the Department of Budget and Management are hereby directed to provide a capital infusion to LBP of at least Thirty Billion Pesos (P30,000,000,000.00), to be sourced from existing funds if allowed by law, or to be included in the General Appropriations Act for the succeeding years.
SECTION 4
Implementation of the Merger by Concerned Government Offices/Agencies
SECTION 4.
Implementation of the Merger by Concerned Government Offices/Agencies.
The GCG shall implement the merger, and in consultation with DBP and LBP, shall also determine and implement the extent and modes by which the assets and liabilities will be transferred.
All other government offices and agencies are hereby directed to promptly take such actions as may be necessary to fully implement the provisions of this Executive Order within one (1) year from its effectivity.
SECTION 5
Reorganization of the Merged Banks
SECTION 5.
Reorganization of the Merged Banks.
The GCG shall undertake, approve and implement a reorganization plan and implement a compensation and position classification system for the merged banks, subject to the principles and standards of the GOCC Governance Act of 2011, and under the condition that all employees of the constituent banks who will be retained under the said reorganization plan, shall not suffer any break in service or tenure, or any diminution of salaries and lawful benefits.
In addition to the separation or retirement benefits allowed under applicable laws, all personnel of the constituent banks separated from service by reason of the reorganization, shall be entitled to a Merger Incentive Pay (MIP) under the following rates:
Years of Government Service
MIP Computation
First 20 years of service
1.00 x Basic Monthly Pay (BMP) x No. of Years
21 to 30 years
1.25 x BMP x No. of Years
31 years and above
1.50 x BMP x No. of Years
SECTION 6
Repeal
SECTION 6.
Repeal.
All executive orders, rules and regulations and other issuances or parts thereof, which are inconsistent with this Executive Order, are hereby revoked, amended, or modified accordingly.
SECTION 7
Separability
SECTION 7.
Separability.
If any provision of this Executive Order is declared invalid or unconstitutional, the other provisions not affected thereby shall remain valid and subsisting.
SECTION 8
Effectivity
SECTION 8.
Effectivity.
This Executive Order shall take effect immediately upon its publication in a newspaper of general circulation.
DONE, in the City of Manila, this 4th day of February, in the year of Our Lord, Two Thousand and Sixteen.
(Sgd.)
BENIGNO S. AQUINO, III
President of the Philippines
By the President:
(SGD.)
PAQUITO N. OCHOA, JR.
Executive Secretary