BSP to review ruling on Banco Filipino

THE Bangko Sentral ng Pilipinas (BSP) said on Wednesday that they would review the decision of the Court of Appeals ruling that the closure of Banco Filipino Mortgage Bank was illegal.

“Our lawyers are reviewing the decision of the Court of Appeals to determine the remedies available to us. Beyond this, we have no further comments,” Juan de Zuniga, BSP deputy governor and general counsel said.

The CA also ordered the central bank to carry out the business plan assistance to the bank. In October 2011, the CA had earlier overturned a Makati court ruling ordering the BSP to release P25 billion in financial assistance to Banco Filipino.

The appellate court’s special 13th Division had granted the central bank’s petition that questioned the order of Judge Joselito Villarosa of Makati Regional Trial Court Branch 66 for the BSP to approve Banco Filipino’s business plan and provide it with P25 billion in assistance.

The CA had ruled that the judge committed grave abuse of discretion when he issued a temporary restraining order (TRO) stopping the BSP from performing its regulatory functions over the bank.

The BSP had placed Banco Filipino under receivership on March 17, 2011, three days after the thrift bank declared a bank holiday.

According to the central bank, the bank had operated as a pyramid or Ponzi scheme in the past years to finance its operations using new deposits to pay old ones, with its officers paying themselves and their lawyers much more than the bank was earning.

The BSP said it had to close the bank because it was insolvent. The liabilities of Banco Filipino had exceeded its assets by P8.4 billion, the central bank added.