State-run Land Bank of the Philippines said its merger with United Coconut Planters Bank (UCPB) effective March 1 would benefit the agriculture sector the most.

"Landbank's union with UCPB advances the government's development agenda to support the agriculture sector through a stronger, more resilient and unified banking institution. The merger places us in a better position to reach and service more farmers, fishers and other players in the agribusiness value chain nationwide," Cecilia Borromeo, president and chief executive of Landbank, said in a statement on Monday.

The merger will "provide a more robust support to the country's agriculture sector for inclusive rural development," Landbank said.

Landbank will be the surviving entity in this merger that will create the Philippines' second-biggest bank in terms of assets, totaling P2.9 trillion.

"More importantly, the increased financial muscle will significantly grow the bank's loan portfolio directed at servicing the whole agriculture sector alongside key development industries," Landbank added.

With the merger, Landbank and UCPB's customers can access a total of 677 branches and branch-lite units, 2,800 automated teller machines (ATMs), as well as 228 cash deposit machines across the country. "Customers are assured that the services of both Landbank and UCPB will continue to be unhampered, with deposits remaining intact and secured in their respective servicing branches."

"All UCPB branches will continue to operate and serve UCPB customers until the systems integration and accounts migration to Landbank are completed. The majority of UCPB branches will be converted as Landbank branches and will be announced regularly to the public," Landbank said.

"Existing service fees will still apply for cash withdrawals of UCPB cardholders at Landbank ATMs until all accounts are converted or migrated to Landbank that comes with new ATM cards," it added.

Set into motion by President Duterte's Executive Order No. 142 last year, the Landbank-UCPB merger was prioritized by the government to save UCPB, Finance Secretary Carlos Dominguez III said last week.

Dominguez said the Duterte administration canceled Landbank's merger with also state-run Development Bank of the Philippines under a 2016 EO of former President Benigno Aquino III because it was UCPB, which had "a potential risk of failure" that would have cost the Philippine Deposit Insurance Corp. P150 billion in losses. INQ