Palace leaves Banco Filipino mess to BSP

Palace leaves Banco Filipino mess to BSP
By Christine O. Avendaño, Jerome Aning, Jhunnex Napallacan, Joey A. Gabieta, Inquirer Visayas
Philippine Daily Inquirer
First Posted 05:46:00 03/17/2011

MANILA, Philippines—Though it is concerned about the situation at Banco Filipino, Malacañang said it would not intervene in a matter that only the Bangko Sentral ng Pilipinas (BSP), the central bank, was competent to handle.

The Palace was not intervening in the Banco Filipino problem because the BSP has the “competence and supervisory powers over banks,” said Presidential spokesperson Edwin Lacierda.

He said the Palace has “every confidence in BSP Governor Amado Tetangco.”

The BSP has asked Banco Filipino to clarify its financial situation following reports that the bank had declared a voluntary bank holiday. The central bank also asked the thrift bank to respond to complaints it had been receiving from depositors from various parts of the country that many Banco Filipino branches were closed without explanation.

Depositors’ complaints

Lacierda said Malacañang was aware of depositors’ complaints and advised them to “refer their complaints to the BSP.”

Banco Filipino executive vice president Maxy Abad released a statement on Tuesday saying the bank was encountering an “extraordinary financial panic caused by a well-orchestrated smear campaign quoting BSP as the source of inaccurate and malicious imputations.”

The bank blamed the BSP for its woes, citing in particular the non-implementation of a P25-billion rebuilding plan.

Banco Filipino currently has about P17 billion worth of deposits in 62 branches, 32 in Metro Manila and 30 outside the metropolis.

Banco Filipino has traced its woes to a Court of Appeals decision which stopped the Makati Regional Trial Court from implementing an order that would have directed the BSP to provide about P19 billion in financial aid to the bank.

On Feb. 14, the appellate court’s special 10th division chaired by Associate Justice Hakim Abdulwahid issued a writ of preliminary injunction which stopped the Makati RTC Judge Joselito Villarosa from conducting further proceedings on the civil case that Banco Filipino filed to get P25 billion in rehabilitation assistance and P18.8 billion in damages from the BSP.

The appellate court ruled that the BSP and the Monetary Board “have a clear and legal right to be protected against the immediate enforcement of the assailed order, and stand to suffer grave and irreparable injury” from the continuance of the proceedings in the case.

The case stemmed from a 1985 order of the BSP’s predecessor, the Central Bank of the Philippines, which closed the Banco Filipino for being insolvent.

The Supreme Court in 1991 ruled the closure was illegal, arbitrary and made with grave abuse of discretion. Eight years later, the high court decided with finality that the bank was entitled to damages arising from its illegal closure.

In 2009, the Supreme Court allowed the Makati RTC to proceed with hearing the P18.8-billion damage suit filed by the Banco Filipino. The case remains pending but its resolution was effectively stopped by the appellate court injunction.

Left wondering

Lawyer Rose Versoza is one of the Banco Filipino depositors who is left wondering if she can still get back her deposit.

Just two weeks ago, Versoza, a co-anchor of Cebu’s Balitang Bisdak, deposited P18,000 in the account of her 11-year-old son in the Banco Filipino branch in Mandaue City.

She had deposited the money, intended for the tuition of her son who will enter the fifth grade in June, so it would not be spent.

Though she knows she can still get the money from the Philippine Deposit Insurance Corp., Verzosa said she is worried about getting the amount in time for her son’s tuition.

An irate depositor at a Cebu City branch informed dyLA Radio on Tuesday that he had a P2 million deposit and was worried over what would happen to his money.

A young woman in her 20s and a depositor of the Gen. Maxilom Avenue branch in Cebu City, said her savings were small but she needed money to pay her bills.

Hard-earned money

Still another client, a manager of a Cebu City restaurant, said she had deposited P350,000 in the bank.

Lawyer Nick Esmale could not believe he could not withdraw the money he deposited in a Banco Filipino branch in Tacloban City, Leyte.

“It’s hard-earned money, (from) blood and sweat,” said Esmale, a Banco Filipino depositor for more than ten years.

Ritchel Gongora, another depositor at the Tacloban branch, said she was upset that her savings of more than four years could “vanish so easily.”

“When I was informed about it by a friend, I almost fainted and I cried. All I want now is to get back my deposit,” she said.

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