Business group slams court order to reopen Banco Filipino
MANILA, Philippines - Influential business group Makati Business Club expressed its "outrage" over the recent decision of the Court of Appeals to order the reopening of thrift bank Banco Filipino Savings and Mortgage Bank.
In a strongly worded statement dated February 15, the club said the appellate court's decision "threats to undermine the power granted to the central monetary authority… to supervise and regulate the banking industry."
"The decision appears to reward defiance of the Bangko Sentral ng Pilipinas, encourage undisciplined business practice, and worst, permit abuse of depositors' trust and misuse of the people's money," it added.
The group stressed that the BSP must stay independent and "free from court interference" in supervising the banks in the country.
In a 50-page decision written by Associate Justice Agnes Reyes-Carpio and released on February 1, the court said respondents BSP, the Monetary Board and the Philippine Deposit Insurance Corp. (PDIC) committed “grave abuse of discretion” and violated Banco Filipino’s right to due process when they implemented Monetary Board Resolution 372-A on March 17, 2011.
The resolution placed the bank under receivership and barred it from continuing its business operations in the country due to “unsound banking practices,” including a Ponzi-like scheme or the fraudulent practice of using new deposits to pay old ones.
Banco Filipino lawyers had argued that the bank was not insolvent--a position that would have been supported if BSP agreed to extend a P25 billion financial assistance.
The CA ruling required BSP to extend that P25 billion.
The PDIC, which is funded by taxpayers' money, has already released insured amounts to Banco Filipino depositors, complicating the implementation of the appellate court's ruling
BSP Deputy Governor Juan de Zuniga said they have filed a motion for reconsideration on Wednesday, February 15.
The Banco Filipino has been a thorn on the side of the BSP for over 2 decades. Majority of the BSP governors and officials who ruled against the bank were sued in court.
The Aguirre family controls Banco Filipino. - Rappler.com