The Philippine Competition Competition (PCC) has approved Land Bank of the Philippines’s planned takeover of Philippine Postal Savings Bank, paving the way for the creation of Overseas Filipino Bank.
“In view of the recommendation from the Mergers & Acquisitions Office that, on the basis of information obtained from the parties and other sources to date, the acquisition … does not result in a substantial lessening of competition in the relevant markets…,” the anti-trust regulator said in a decision posted on its website.
It noted that a “loss of competition is not likely to result from the transaction and sufficient competitive constraints on the parties remain from other market participants, post-acquisition.”
“The Commission hereby resolves that it will take no further action with respect to the transaction. This is without prejudice to the Commission’s power to conduct monitoring of the provision of wholesale banking services to government entities in geographic area where there is a limited number of competing authorized government depository banks aside from the merged entity post-acquisition,” it said.
Republic Act 10667 mandates PCC approval for all merger and acquisition deals worth P1 billion and above.
The Bangko Sentral ng Pilipinas green-lit the transaction in December, two months after President Rodrigo Duterte signed Executive Order 44 establishing the OFB.
As a LandBank unit, Postalbank will be renamed Overseas Filipino Bank, serving as a foreign and domestic remittance marketing arm that will cater to the banking needs of Filipino migrant workers worldwide.
The Palace order likewise mandated LandBank to infuse the needed capital and implement a reorganization plan for the bank.
OFB will be managed by a board of directors consisting of nine members including the Landbank president as chairman, the Landbank designated OFB president as vice-chairperson, four Landbank-designated directors or officers as members, and members representing the Department of Labor and Employment, Overseas Workers Welfare Administration, the private sector and overseas Filipino workers.
While the total value of the transaction has not been disclosed, preliminary Finance department valuations have put Postalbank’s value at a negative P580 million.
The government has said that it wanted OFB to be operational by February this year.