Duterte okays acquisition of postal bank to be converted into Overseas Filipino Bank

October 9, 2017

President Rodrigo Duterte has approved the acquisition of the Philippine Postal Savings Bank (PPSB) by the Land Bank of the Philippines (LBP) and subsequently to be converted into an Overseas Filipino Bank (OFB).

In Executive Order No. 44 signed on Sept. 28, 2017, Duterte said the acquisition of PPSB by LBP through transfer of shares is subject to the necessary approval and clearance of the Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Philippine Deposit Insurance Corporation, and the Philippine Competition Commission.

With this, he ordered the Philippine Postal Corporation (PPC) and the Bureau of Treasury to transfer all their respective shares in PPSB to LBP at zero value.

"Relative thereto, the PPSB shall cause the expeditious transfer of all assets, liabilities, records, systems, and other appurtenant items to LBP," the EO read.

PPSB is a subsidiary of the PPC and has the primary purpose of developing the rural financial sector. It is strategically equipped to provide the needed financial and remittance services to Filipinos overseas and their families.

Duterte also ordered LBP to "infuse necessary capital" to OFB in order to strengthen the capital base of the bank for the overseas Filipinos and enable the same to attain its primary agenda of servicing the various financial and banking needs of overseas Filipinos.

The EO also provides for the reorganization plan for the OFB and cause the detail of secondment of LBP employees as may be necessary.

The OFB shall have the board of directors composed of nine members, such as the LBP president as chairperson; LBP-designated OFB president as vice chairperson; four LBP-designated directors of officers as members; a member representing the Department of Labor and Employment; a member representing the Overseas Workers Welfare Administration; and a private sector member representing overseas Filipinos.

The members representing the DOLE, OWWA and overseas Filipinos shall be appointed by the President.

All PPSB officers and employees who voluntarily elect to be retired or may be separated from the service shall be granted retirement incentive, in addition to retirement or separation benefits under existing laws.

Funding for the separation pay and other benefits of affected officials and personnel of PPSB shall be sourced from its corporate funds or, whenever necessary, the corporate funds of the LBP.

The EO also provides for the return of Project Dagdag Regular Income Vice Entrepreneurship (DRIVE) Fund.

"Prior to the actual transfer of shares, the PPSB is hereby directed to return to the National Treasury the balance amounting to P249.23 million from the previously released P500 million to fund the Project DRIVE Fund," it said.

The Order shall take effect immediately upon publication in the Official Gazette or in a newspaper of general circulation. Celerina Monte/DMS