Law Summary
Role of Philippine Postal Savings Bank (PPSB)
- PPSB is a subsidiary of the Philippine Postal Corporation (PPC) with the primary role of developing the rural financial sector.
- Strategically positioned to provide financial and remittance services to OFWs and their families.
Legal Basis and Governance Recommendation
- Section 2 of RA No. 10149 (GOCC Governance Act of 2011) mandates active State ownership in GOCCs aligned with national development policies.
- Governance Commission for GOCCs (GCG) recommended LBP's acquisition of PPSB via share transfer due to misalignment of PPSB functions with national policy.
- Constitutional authority for the President's oversight over executive entities under Section 17, Article VII of the 1987 Constitution.
Acquisition and Conversion (Section 1)
- Approval of PPSB acquisition by Land Bank of the Philippines (LBP) subject to approvals from Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), Philippine Deposit Insurance Corporation (PDIC), and Philippine Competition Commission (PCC).
- PPSB to be converted into Overseas Filipino Bank (OFB).
Share Transfer and Asset Handover (Section 2)
- PPC and Bureau of Treasury directed to transfer their shares in PPSB to LBP at zero value.
- PPSB tasked with expeditious transfer of assets, liabilities, records, systems to LBP.
Capitalization of OFB (Section 3)
- LBP mandated to infuse necessary capital to strengthen OFB’s base.
- Capital infusion aims to enable OFB to address financial and banking needs of OFWs effectively.
Reorganization and Governance Structure (Section 4)
- LBP to implement a reorganization plan and detail/second employees as needed.
- OFB governed by a 9-member Board of Directors:
- LBP President (Chairperson)
- LBP-designated OFB President (Vice Chairperson)
- Four LBP-designated directors or officers
- One member representing DOLE
- One member representing OWWA
- One private sector member representing overseas Filipinos
- President of the Philippines appoints DOLE, OWWA, and private sector members.
Retirement Incentive Plan (Section 5)
- Voluntary retirement/separation scheme for PPSB employees offers additional incentives based on years of service:
- Up to 20 years: 1.0 x Basic Monthly Pay (BMP) x years served.
- More than 20 and up to 30 years: 1.25 x BMP x years.
- More than 30 years: 1.50 x BMP x years.
- Funding sourced from PPSB corporate funds or LBP funds if necessary.
Return of Project DRIVE Fund (Section 6)
- PPSB required to return P249.23 million balance of the previously released P500 million DRIVE Fund to the National Treasury before share transfer.
Repealing Clause (Section 7)
- Any prior orders or issuances inconsistent with this Executive Order are repealed or modified accordingly.
Separability Clause (Section 8)
- Invalidity of any provision does not affect the rest of the Order; unaffected provisions remain in force.
Effectivity (Section 9)
- Order becomes effective immediately upon publication in the Official Gazette or newspaper of general circulation.