Court stops sale of Banco Filipino assets

MANILA, Philippines - The Makati City Regional Trial Court has ordered the Bangko Sentral ng Pilipinas (BSP) and the Monetary Board to cease and desist from consolidating and selling by public auction the assets of the Banco Filipino Savings and Mortgage Bank pending the final disposition of an P18.8-billion damage suit which filed by Banco Filipino against the BSP.

In a four-page order, Makati RTC Judge Joselito Villarosa granted the petition for the issuance of a preliminary injunction filed by Banco Filipino. 

The RTC also said that Banco Filipino has established that the threat of having its assets — now valued at about P10 billion-sold at a public auction, would cause serious damage to its finances that would result in its closure.

“Finally, plaintiff has established that defendants’ (BSP and Monetary Board) threat of auctioning its assets would surely cause serious damage to plaintiff’s finances and eventual destruction leading to its closure. The mere announcement and publication of said auction will result to a bank run, causing panic among plaintiff’s depositors and the general public,” the court added in its March 17, 2009 order.

Banco Filipino sought the RTC’s intervention by way of the issuance of a preliminary injunction after learning that the BSP is now in the process of appraising the bank’s assets for the purpose of consolidation for a public auction.

Last January, the Supreme Court gave the Makati RTC the green light to proceed with the P18.8-billion damage suit filed by Banco Filipino against the BSP in connection with the bank’s illegal closure in 1985.

In its resolution, the Court affirmed the decision of the Court of Appeals that it was the BSP, being a successor-in-interest which should be held accountable for the excesses committed by the old Central Bank.

“Central Bank (CB) continues to exist and has remained a defendant but with a new name — the Bangko Sentral ng Pilipinas (BSP). The BSP is the sole successor-in-interest of the old CB and that the transfer of assets from the CB to the BSP during the pendency of the subject civil cases constitutes the latter as a transferee pendente lite (pending litigation),” the Court said.

Banco Filipino was ordered padlocked and liquidated in 1985 by the defunct CB. The late Jose Fernandez was then the CB governor and chairman of the Monetary Board (MB).