What’s happening to Banco Filipino? (Part 2)

most publicized, and probably has the highest number of depositors at the time of closure. – mostly from the middle class.

4. Probably it is the only case in the history of Philippine banking where the bank was closed for the second time while its earlier claim for damages ( 18.8 Billion arising) from an illegal closure (the first closure) was not yet resolved. In other words, the claim for damages was still pending when the second order of closure was declared;

5. I do not recall any banking case where the proposed Business Plan to rehabilitate a bank has been amended no less than eight ( 8) times – and in the end, the Business Plan was not approved. Its disapproval was further confirmed by the courts;

6. Banco Filipino is the only banking case where its request to extend its corporate life is based on the argument that the total number of years when the bank was closed (12 year) should be a justifiable ground for the extension of its 50 year-corporate life;

7. P robably, the Banco Filipino case is the only banking case in the Philippines where the decision of one division of the Court of Appeals was based on the dissenting opinion of one Monetary Board member. Although the decision of the Court of Appeals in this case was late reversed by another division of the Court of Appeals within a 10-month period; - what happened was precedent- setting;

8. This case of Banco Filipino covers

the span of three (3) Central Bank Acts/Laws namely, Republic Act No. 265 of 1948; Republic Act No. 7653; of 1993; and RA 11211 of 2019. Meaning that there are still pending cases up to this time when the promulgation of RA 11211 this year took place.

This writer was a member of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) for one term – in 2005 to 2011. I was at the BSP at the time Banco Filipino was declared insolvent on March 14, 2011. I was still at BSP at the time Banco Filipino was closed on March 17, 2011 for the second time. I was at the BSP when Banco Filipino was requesting for an emergency loan to cover the heavy withdrawals resulting from media news like the news last March 7, 2011 appearing in Remate and People’s Tonite last March 8, 2011. The March 7, 2011 issue of Remate tabloid had the headline “Banco Filipino Tagilid, Lugi ng 12 billion”

When I left BSP upon the end of my 6-year term in July, 2011 as a Monetary Board Member, the cases involving both the BSP and Banco Filipino did not die down. It is saddening to note too for that today the legal battle between BSP and Banco Filipino continues.

There are many legal issues involved in the Banco Filipino case. One of such legal issues is the matter of determining whether a bank seeking for an emergency loan like Banco Filipino qualifies to borrow under Section 84 of Republic Act 7653 of 1993. In short, what is the test of insolvency?

(To be continued)

Have a joyful day! (For comments/ reactions please send to Ms. Villafuerte’s email: villafuerte_nelly@ yahoo.com).