Banco Filipino asks CA to issue TRO on closure

MANILA, Philippines - Banco Filipino Savings and Mortgage Bank is asking the Court of Appeals to issue a temporary restraining order on its closure and being placed under receivership by the Bangko Sentral ng Pilipinas (BSP).

In a 72-page petition, shareholders of the bank asked the appellate court to stop the BSP from implementing Monetary Board Resolution No. 372-A allowing the seizure and disposal of the bank’s real estate assets and other properties.

The Monetary Board (MB) is BSP’s policy-making body.

Petitioners called the closure order “arbitrary, whimsical, capricious, unreasonable and illegal.”

“The finding of BSP that Banco Filipino supposedly has insufficient realizable assets to meet its liabilities and cannot continue in business without involving probable losses to its depositors and creditors is belied by the fact that Banco Filipino has proven itself to have realizable assets, the value of which far exceeds its liabilities,” the petitioners said.

“More importantly, respondents BSP and MB granted Banco Filipino financial assistance of P25 billion under the approved Business Plan by virtue of MB Resolution No. 1668. Such approval is an acknowledgment on the part of respondents that Banco Filipino is not insolvent and that it has sufficient assets to secure the advances,” the petitioners pointed out.

The bank, owned by the Aguirre family, also cited a preliminary mandatory preventive injunction issued by the Makati City Regional Trial Court Branch 66 ordering the BSP to implement a business plan, already approved by both BSP and MB.

The BSP appointed the Philippine Deposit Insurance Corp. (PDIC) as receiver of Banco Filipino and ordered that assistance be immediately given to its 177,652 depositors.

The BSP said that the bank has insufficient realizable assets to meet its obligations, as its net realizable value stands at -P8.4 billion.

But Banco Filipino vice chairman Perfecto Yasay said the bank has P25 billion in assets.

Founded in 1964, the bank had 32 branches in Metro Manila and nearby areas and 30 more in the provinces before its closure.

The bank claimed in its website that it was closed in 1985 by Central Bank due to alleged insolvency despite its outstanding performance. It was reopened in 1994 following a Supreme Court decision declaring its first closure in 1985 arbitrary.

Meanwhile, the PDIC will start paying depositors of Banco Filipino with deposits of up to P5,000 starting Friday and those with deposits of up to P500,000 within four months.

“We are targeting to start to release those with up to P5,000 in deposits and those with deposits up to P500,000 in 90 to 120 days,” PDIC executive vice president Cristina Orbeta told the House committee on banks and financial intermediaries upon questioning by Isabela Rep. Giorgidi Aggabao. – With Paolo Romero