Landbank of the Philippines

From Wikipilipinas: The Hip 'n Free Philippine Encyclopedia
Jump to: navigation, search
Land Bank of the Philippines
Logo of Landbank
Type State-owned
Founded Manila, Philippines (1963)
Headquarters Manila, Philippines
Key people
Gilda E. Pico, Acting Pesident and CEO (2006)
Finance and Insurance
Financial Services
PHP22.579 billion (2005)
PHP3.019 billion (Green Arrow Up Darker.png34%) (2005) [1]
7,954 (as of 2005)

Land Bank of the Philippines, also known as Landbank or by its initials, LBP, is a bank in the Philippines owned by the Philippine government. Landbank services mainly rural farmers and fisherman|fishermen since the Philippines largely has an agriculture-based economy. It provides the services of a universal bank; however, it is officially classified as a "specialized government bank" with a universal banking license. Landbank is the fourth 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/or controlled corporations in the Philippines.

Unlike most Philippine banks, Landbank has an extensive rural branch network. It services many rural sector clients in areas where banking is either limited to rural banks or is non-existent.



Landbank was established on August8, 1963 as part of the Agricultural Land Reform Code, or Republic Act No. 3844. At that time, Landbank was established for the purposes of land reform: that is, so to speak, the purchase of agricultural estates for division and resale to small landholders and also to facilitate the purchase of land by the agricultural lessee. In 1965, Landbank's by-laws were approved and its first board of trustees, with the Secretary of Finance as chairman, was formed.

On October 21, 1972, Presidential Decree No. 27, signed by then-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 and/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.

By 1973, Landbank was in financial distress. It lacked the resources and the capital needed to implement the land reform programs and was too deficient in structure to implement the programs efficiently. On July 21, Marcos signed into law 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, home-building 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 mandated by the decree to provide timely and adequate support in all phases involved in the execution of agrarian reform and also increased its authorized financial capital|capital to 3 billion pesos. It also became exempted from all national, provincial, city and municipal taxes and assessments.

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

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 (finance)|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.

Landbank became the financial intermediary for the Comprehensive Agrarian Reform Program (CARP) in 1988. It was also in this year that UnionBank started a gradual privitization. The Aboitiz Group of Companies acquired Landbank's 40% share of UnionBank in the same year and still has this share today. Landbank also became the third member of Expressnet, an automatic teller machine|ATM consortium, in December of 1991.

On February 23, 1995, Landbank's charter was once again amended. Its authorized capital was increased to nine billion pesos and established it as an official government depository. It also increased the number of board members of Landbank's board of trustees to nine members. On August 25, 1998, Landbank's authorized capital was once again increased to 25 billion pesos.

Subsidiaries and affiliates

Landbank is divided into the following subsidiaries and affiliates:


  • Government of the Philippines: 100%


Landbank competes against the major banks such as Metrobank, BPI, Equitable PCI Bank and Philippine National Bank. In rural areas, depending on the situation, 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, which is another government-owned bank. It either competes against or works with DBP, depending on the situation involved.

See also

External links



Original content from WikiPilipinas. under GNU Free Documentation License. See full disclaimer.