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Land Bank of the Philippines

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Land Bank of the Philippines
Company typeState-owned
IndustryFinance and insurance
FoundedAugust 8, 1963; 61 years ago (1963-08-08)
HeadquartersMalate, Manila, Philippines
Key people
ProductsFinancial services
Revenue₱77.09 billion (2019)[1]
₱19.05 billion (2019)[1]
Total assets₱2.04 trillion (2019)[1]
Number of employees
10,037 (2019)
Websitewww.landbank.com

Land Bank of the Philippines (LBP; often referred to simply as LandBank), is a government-owned bank in the Philippines with a special focus on serving the needs of farmers and fishermen. While it provides the services of a universal bank, it is officially classified as a "specialized government bank" with a universal banking license.

LandBank is the second largest bank in the Philippines in terms of assets and is the largest government-owned bank. It is also one of the biggest government-owned and controlled corporations and banking institutions in the Philippines along with the Development Bank of the Philippines (DBP), Overseas Filipino Bank (OFW Bank), and Al-Amanah Islamic Investment Bank of the Philippines.

Unlike most Philippine banks, LandBank has an extensive rural branch network with 409 Branches and Extension Offices, 46 Lending Centers and 2,188 ATMs (as of February 2020).[2] It services many rural sector clients in areas where banking is either limited to rural banks or is non-existent.

History

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LandBank was established on August 8, 1963, as part of the Agricultural Land Reform Code as part of a program of land reform in the Philippines. It was to help with the purchase of agricultural estates for division and resale to small landholders and the purchase of land by the agricultural lessee.[3]

In 1965, LandBank's by-laws were approved and its first board of trustees was formed, with the Secretary of Finance as chairman.

On October 21, 1972, Presidential Decree No. 27, signed by President Ferdinand Marcos, emancipated all tenant farmers working on private agricultural lands devoted to rice and corn, whether working on a landed estate or not. The system was implemented through a system of sharecropping or lease-tenancy. LandBank was tasked to collect 15-year land amortizations from beneficiaries at the cost of the value of the land plus six percent interest per annum.[4]

By 1973, LandBank was in financial distress. It lacked the resources and the capital needed to implement the land reform programs and lacked the structure to implement the programs efficiently. On July 21, Marcos signed Presidential Decree No. 251 which revitalized the bank. The decree granted LandBank a universal banking license (the first bank in the Philippines to be issued such a license) with a social mission to spur countryside development. The decree expanded LandBank's powers to include lending for agricultural, industrial, homebuilding and home-financing projects and other productive enterprises, as well as lending to farmers' cooperatives and associations to facilitate production, marketing of crops and acquisition of essential commodities. LandBank was also required by the decree to provide timely and adequate support in all phases involved in the execution of agrarian reform and also increased its authorized capital to ₱3 billion. It also became exempted from all national, provincial, city and municipal taxes and assessments.[5]

LandBank was reorganized in 1977 when it was divided into three sectors to better assess the needs of its customers. It was divided into Agrarian, Banking, and Operations sectors to strengthen operations and ensure long-term viability.[6]

In 1982, the Agricultural Credit Administration (ACA), established under the same law as LandBank, was abolished and all its assets and functions transferred to LandBank. ACA's function was to extend credit to small farmers. Also in this year, Union Bank of the Philippines (UnionBank) was formed, with LandBank having a 40-percent stake in the government-owned commercial bank.[7]

LandBank became the financial intermediary for the Comprehensive Agrarian Reform Program (CARP) in 1988. It was also in that year that UnionBank started a gradual privatization. The Aboitiz Group of Companies acquired LandBank's 40% share of UnionBank then which it continues to own. LandBank also became the third member of Expressnet, an interbank network in December 1991 but now a BancNet member.

On February 23, 1995, LandBank's charter was once again amended. Its authorized capital was increased to ₱9 billion and it became an official government depository. The number of members of the board of trustees was also increased to nine whereas the Secretary of Finance, as Chairman, the President of the Bank as Vice-Chairman, the Secretary of Agrarian Reform, the Secretary of Labor, and the Secretary of Agriculture as ex officio members.[8]

On August 25, 1998, LandBank's authorized capital was once again increased to 25 billion pesos, and it then increased to 200 billion pesos, after the planned DBP–LandBank merger in 2016.

In 2014, LandBank was planned to be merged with the Development Bank of the Philippines (DBP).[9] President Benigno Aquino III signed Executive Order No. 198 on February 4, 2016, to give way on the merger, with the former as the surviving entity.[10] However, the Duterte administration canceled the merger later that year.[11]Three years into the Presidency of Bongbong Marcos, this had been officially cancelled. [12]

On June 25, 2021, President Rodrigo Duterte signed Executive Order No. 142 which mandates the merging of LandBank with the United Coconut Planters Bank (UCPB), with LandBank as the surviving entity.[13][14]

Current operations

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A LandBank branch in Navotas

LandBank competes against the major banks such as Metrobank, Bank of the Philippine Islands (BPI), Banco de Oro and Philippine National Bank (PNB). In rural areas, it either competes against or complements rural banks.

On the other end of the spectrum, LandBank takes on a dual role with the Development Bank of the Philippines, another government-owned bank. It either competes against or works with DBP, depending on the situation.

Board of Directors

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Executive Management Team

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  • Ma. Lynette V. Ortiz - President & CEO
  • Liduvino S. Geron - Executive Vice President, Branch Banking Sector
  • Alan V. Bornas - Executive Vice President, Operations Sector
  • Carel D. Halog - Executive Vice President, Treasury and Investment Banking Sector
  • Alex A. Lorayes - Executive Vice President, Corporate Services Sector
  • Leila S. Martin - Senior Vice President, Digital Banking Sector
  • Ma. Celeste A. Burgos - Senior Vice President, National Development Lending Sector

Subsidiaries and affiliates

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Land Bank has the following subsidiaries and affiliates:

  • LBP Leasing Corporation
  • LBP Insurance Brokerage
  • LBP Resources and Development Corporation (former LB (Land Bank) Realty Development Corporation)
  • LBP Countryside Development Foundation, Inc.
  • UCPB Securities, Inc.
  • Overseas Filipino Bank

See also

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References

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  1. ^ a b c "Land Bank Annual Report" (PDF) (Press release). Retrieved February 2, 2021.
  2. ^ "Corporate Profile". LANDBANK Website.
  3. ^ Republic Act No. 3844 (August 8, 1963), "An Act to Ordain the Agricultural Land Reform Code and to Institute Land Reforms in the Philippines, Including the Abolition of Tenancy and the Channeling of Capital Into Industry, Provide for the Necessary Implementing Agencies, Appropriate Funds Therefor and for Other Purposes." (PDF), Official Gazette of the Republic of the Philippines, retrieved August 1, 2023
  4. ^ Presidential Decree No. 27, s. 1972 (October 21, 1972), "Decreeing the Emancipation of Tenants From the Bondage of the Soil, Transferring to Them the Ownership of the Land They Till and Providing the Instruments and Mechanism Therefor", Official Gazette of the Republic of the Philippines, retrieved August 1, 2023
  5. ^ Presidential Decree No. 251, s. 1973 (July 21, 1973), "Amending Certain Provisions of Republic Act Numbered Three Thousand Eight Hundred Forty-four, as Amended, Entitled "The Code of Agrarian Reform in the Philippines"", Official Gazette of the Republic of the Philippines, retrieved July 10, 2023
  6. ^ "FAST FACTS: What you should know about Landbank". Rappler. July 31, 2019. Retrieved July 10, 2023.
  7. ^ Executive Order No. 816, s. 1982 (July 8, 1982), "Providing for the Abolition of the Agricultural Credit Administration and Transferring Its Functions to the Land Bank of the Philippines", Official Gazette of the Republic of the Philippines, retrieved July 10, 2023
  8. ^ Republic Act No. 7907 (February 23, 1995), "An Act Amending Republic Act Numbered Thirty-eight Hundred Forty-four, as Amended, Otherwise Known as the "Code of Agrarian Reform in the Philippines", Supreme Court E-Library, retrieved July 10, 2023
  9. ^ "Landbank-DBP merger shelved for now". BusinessWorld. Retrieved January 5, 2016.
  10. ^ Dela Paz, Chrisee (February 9, 2016). "Aquino OKs Landbank-DBP merger". Rappler. Retrieved June 30, 2021.
  11. ^ de Vera, Ben O. (September 7, 2016). "Gov't stops DBP-Landbank merger". Philippine Daily Inquirer. Retrieved June 30, 2021.
  12. ^ https://www.rappler.com/business/landbank-dbp-stop-merger-plan-seek-more-capital-possible-initial-public-offering/
  13. ^ Manuel, Pilar (June 29, 2021). "Duterte approves merger of Landbank, UCPB". CNN Philippines. Archived from the original on June 29, 2021. Retrieved June 30, 2021.
  14. ^ Aguilar, Krissy (June 29, 2021). "Duterte approves merger of Landbank and UCPB". Philippine Daily Inquirer. Retrieved June 30, 2021.
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