Court stops reopening of Banco Filipino
THE Court of Appeals (CA) has stopped the reopening of Banco Filipino as well as the move to infuse P25 billion for its rehabilitation.
This was after a division of the appellate court reversed the decision of another division of the CA declaring null and void the memorandum issued by the Bangko Sentral ng Pilipinas (BSP) and the Monetary Board (MB) placing Banco Filipino under receivership.
In the 18-page decision dated November 21, 2012, the CA’s Special Seventh Division granted the motion for reconsideration filed by the central bank and MB as it reversed and set aside the decision rendered on January 27, 2012 in favor of the bank.
The court, through Associate Justice Noel Tijam, rendered a new judgment dismissing the petition for certiorari and mandamus filed by Banco Filipino and its stockholders.
“We cannot find sufficient ground to uphold this court’s January 27, 2012 decision not only for want of material basis under the facts, the law and jurisprudence but, more importantly, for being brought with uncertainties,” the ruling stated.
The Tijam division took over from the case after all of the justices comprising the former Special 14th Division inhibited from the case.
The old decision, which ordered the reopening of the bank and infusion of funds, was written by Justice Agnes Reyes- Carpio and con- curred in by Justices Vicente Veloso and Normandie Pizarro.
According to a well-placed source, President Benigno Aquino 3rd exerted pressure on the court after he got mad with the Reyes- Carpio ponencia because of their ruling. This resulted in the inhibition of the entire division from the case.
In the Reyes-Carpio ponencia, the Appeals court ruled that “as part of its rehabilitation, respondents Bangko Sentral ng Pilipinas and the Monetary Board shall, within 30days from receipt hereof, extend to Banco Filipino Savings and Mortgage Bank” several assistance or support.
It includes a financial assistance in the amount, which shall not be less than and under such terms as contained or indicated in the Busi- ness plan, Special liquidity facility/fund, which shall be equivalent to the amount of the deposit base of the bank and such other equitable regulatory relief, which shall address the pernicious effects of the illegal closure.
They directed the central bank to provide financial assistance in the amount of not less than P25 billion. The Appeals court had held that it was necessary in order to ensure the fast and immediate recovery of the bank.
But in its new decision, the CA ruled that when the BSP and MB Resolution No. 372-A was issued on March 17, 2011 placing the savings bank under receivership, “their actions were valid exercise of discretion as they are suitable and rea- sonable processes within the context of the pertinent law and, did not, by any means, amount to abuse of discretion, much less grave, correctible by certiorari.”
The Tijam ruling junked the petition of Banco Filipino for its reopening, since there is no certainty that it will not close down again.
Hence, there is no need for central bank and MB to infuse P25 billion for the bank.
Associate Justices Ramon Cruz and Eduardo Peralta Jr. concurred with Tijam’s decision.
Banco Filipino was founded in 1964 by Tomas Aguirre. The bank was closed in 1985 by the central bank due to alleged insolvency but was reopened in 1994. It was again closed in March 2011.