QuestionsQuestions (EXECUTIVE ORDER NO. 142)
It is anchored on Section 17, Article VII of the 1987 Constitution (President’s control over executive departments) and on statutory authorities including RA No. 11524 (Coconut Farmers and Industry Trust Fund Act), RA No. 10149 (GOCC Governance Act), particularly provisions on GCG’s role in evaluating mergers and centralized monitoring of GOCC operations.
Section 5(a) of RA No. 10149 empowers the GCG to determine whether a merger is in the best interest of the State based on evaluation of the GOCC’s performance and relevance; and Section 28 provides that agencies/GOCCs seeking to purchase a corporation or acquire controlling interest must submit proposals to the GCG for review and approval of the President.
EO 142 approves the merger of UCPB with LBP, with LBP as the surviving entity, and provides that all assets and liabilities of UCPB will be transferred to LBP.
Because under existing company and corporate law, corporate mergers generally require SEC approval/registration and compliance with regulatory requirements, in addition to presidential approval and any specific conditions under RA No. 11524 and the Revised Corporation Code (RA No. 11232).
It states the merger is approved subject to the conditions and limitations under RA No. 11524 and the Revised Corporation Code (RA No. 11232).
EO 142 approves the LBP’s acquisition of the special preferred shares held by PDIC in UCPB, representing 88.91% of UCPB’s authorized capital stock, as part of restructuring the ownership/control consistent with the merger’s objectives.
They represent 88.91% of UCPB’s authorized capital stock.
P12 Billion par value.
The GCG en banc endorsed the acquisition and merger (subject to conditions and prior approvals), and the Monetary Board approved via Resolution No. 618 dated 20 May 2021 the LBP and PDIC request for LBP to acquire PDIC’s special preferred shares totaling 88.91% with par value P12 Billion.
EO 142 notes that UCPB remains under rehabilitation pursuant to a Memorandum of Agreement involving the Republic, PCGG, PDIC, and UCPB, where PDIC provided financial assistance (capital notes converted into special preferred shares). The share sale to LBP is part of that rehabilitation/settlement framework.
It requires UCPB and LBP to prepare and implement an integration plan toward full implementation of the merger, in accordance with existing laws and regulations.
LBP may adopt and implement a reorganization plan approved by its Board, subject to RA No. 10149 and GCG rules. Separated LBP personnel may receive separation incentives fixed by the Board.
UCPB must pay separation benefits pursuant to guidelines it may adopt and applicable laws/rules. UCPB personnel may be hired by LBP when applicable, provided they have necessary civil service eligibility and other requirements for the position.
All other government offices and agencies must take necessary actions subject to applicable laws, to fully implement the provisions within six (6) months from effectivity.
Sections 2, 4, and 5 of EO 198 (s. 2016) are repealed, with inconsistent issuances or parts thereof repealed or modified accordingly.
It takes effect immediately upon publication in the Official Gazette or in a newspaper of general circulation. This starts the clock for implementation duties and ensures legal enforceability and compliance urgency.