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Treasury & Capital Markets
New boss takes over at Landbank in Philippines
Appointment comes amid contentious merger plan making it nation’s biggest lender
Patricia Chiu 25 May 2023

Lynette V. Ortiz has been sworn in as president and chief executive officer of the Land Bank of the Philippines (Landbank), one of two state-owned banks in the Philippines, which is at the center of a controversial merger plan. 

Manila-based Ortiz succeeds Cecilia Borromeo, who served as president and CEO of the bank for four years. Ortiz joins Landbank from Standard Chartered Bank Philippines, where she most recently served as CEO and was the first Filipino to helm the London-headquartered lender’s Philippine business. 

During her time with Standard Chartered, Ortiz led strategies to grow the local franchise across the various client segments and delivered sustainable financial performances. 

Ortiz, who was sworn in by finance secretary Benjamin Diokno, says she hopes to bring “a fresh perspective” to Landbank as a result of her years of experience working with global banks. 

“I recognize the highly important role of Landbank in nation-building,” she adds. “And I am keen to contribute and infuse ideas and innovations that will further fortify the bank in fulfilling its social mandate.” 

Ortiz also says she hopes to make Landbank’s operations “more dynamic and responsive to address the changing needs of our highly diverse customers and stakeholders”.

Landbank has 2.8 trillion Philippine pesos (US$50.2 billion) in assets, as of June 2022, and a depositor base of about 2.5 trillion pesos.

But come November this year, Ortiz may have a bigger bank to manage if Landbank’s planned merger with the country’s other state-owned bank, the Development Bank of the Philippines (DBP), goes through. 

If this happens, Landbank, as the surviving entity, will overtake BDO Unibank as the biggest lender in the country. 

DBP opposes merger

While both Landbank and DBP are state owned, they have slightly different customer bases, with Landbank created to cater mostly to the agricultural sector and DBP to industries.

However, Diokno, who is ex-officio chairman of Landbank and also the strongest proponent of the merger, previously has said that the two banks essentially share the same mandate and “do almost the same thing”.

In addition to being the current chair of the Landbank, Diokno, as finance secretary, also serves as an ex-officio member of the Governance Commission for Government-Owned and -Controlled Corporations (GCG), the government body to which the merger proposal was submitted to, a fact that DBP chairman Dante Tiñga has highlighted. 

Tiñga alluded to a conflict of interest on Diokno’s part earlier in May during a briefing with local reporters. “[Diokno] is the ex-officio chairman of [Landbank] and will remain so after it becomes the surviving superbank following the merger. […] He was also governor of the Bangko Sentral ng Pilipinas (BSP) before his appointment to the cabinet and is a member of the Monetary Board of the BSP, which regulates banking in the country,” he said, adding that the proposed merger is a “dangerous experiment”.

The GCG, the ruling body for state-owned firms, for its part, has initiated its own legal study on the proposal.

In a statement last month, GCG chairman Alex Quiroz said that, based on "the provisions of statutes and applicable jurisprudence on the matter”, the merger could go through without the need to pass a new law.

However, DBP disagrees. It has since submitted an appeal to the Office of the President regarding the GCG’s conclusion. It also insists that any planned merger “requires congressional action” and that the bank is ready to “exhaust all available means to ensure that all issues and concerns are properly threshed out and effectively addressed in the proper and legal forum”.

Diokno, however, is confident the merger will happen, saying an executive order from President Ferdinand Marcos III directing the two banks to merge could come out as early as this month, and that the marriage of Landbank and DBP can be finalized by November. 

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