Banco Filipino loses Supreme Court bid for P25-B financial aid
MANILA, Philippines – The Supreme Court (SC) denied the petition of the now-defunct Banco Filipino to compel the Bangko Sentral ng Pilipinas (BSP) to process and grant its application for an income enhancement loan worth P25 billion.
The decision of the SC's 3rd Division penned by Associate Justice Marvic Leonen upheld the earlier decision of the Court of Appeals (CA) that also denied Banco Filipino's request for financial assistance from the government's banking institutions.
Banco Filipino lost on two main grounds.
First, the SC said that as a closed bank under receivership, Banco Filipino can only file complaints through the Philippine Deposit Insurance Corporation (PDIC).
Second, the SC said that the BSP's decision not to grant the loan to Banco Filipino was a quasi-judicial decision as a quasi-judicial agency. As such, the SC said, petitions against a quasi-judicial agency can only be tackled by the CA.
"In sum, this Court holds that petitioner did not have the legal capacity to file this Petition absent any authorization from its statutory receiver, Philippine Deposit Insurance Corporation. Even assuming that the Petition could be given due course, it would still be denied. The Court of Appeals did not err in dismissing the action pending between the parties before the trial court since special civil actions against quasi-judicial agencies must be filed with the Court of Appeals," Leonen said, with concurrences from Associate Justices Presbitero Velasco Jr, Lucas Bersamin, and Samuel Martires.
What's the issue? Banco Filipino was shut down in 1985, but reopened after the SC declared the closure void in 1991. The SC allowed Banco Filipino to resume business after that.
Going by the SC's findings of an illegal closure, Banco Filipino filed for damage claims worth P18 billion.
After suffering from heavy withdrawals, Banco Filipino ran to the BSP to ask for emergency loans.
For many years, Banco Filipino and the BSP went back and forth on an agreement for the loan requests that reached up to P25 billion. (READ: Business group slams court order to reopen Banco Filipino)
In 2004, the BSP told Banco Filipino that it was approving the loan on the condition that the bank withdraws its damage claims and refrains from filing others.
That's when Banco Filipino went to the Makati City Regional Trial Court (RTC), where it got a favorable decision in 2010.
The CA, however, reversed the Makati RTC in 2011 – a ruling now upheld by Leonen's SC division.
What'll happen now? This means Banco Filipino's problems continue.
In January this year, the CA allowed the BSP to sell and dispose of the bank's assets, according to a BusinessMirror report.
Former officers of Banco Filipino also face criminal complaints for conducting "business in an unsafe and unsound manner that resulted in estimated losses of P1.4 billion to the bank." – Rappler.com