CA keeps central bank from selling off Banco Filipino's assets
MANILA, Philippines – The Court of Appeals (CA) on Wednesday, August 22, stopped the Bangko Sentral ng Pilipinas (BSP) from bidding out, disposing of, or otherwise selling off the assets of Banco Filipino Savings and Mortgage Bank.
Associate Justice Edwin Sorongon of the CA's former 15th Division reversed a lower court's November 27, 2017, decision that would have allowed the BSP to dispose of Banco Filipino's assets.
The reversal takes into account an appeal made before the Supreme Court regarding the validity of the BSP resolution, which put Banco Filipino under receivership, as well as a pending CA resolution regarding the legality of the resolution that ordered the liquidation of Banco Filipino assets.
What happened: Incorporated and opened in 1964, Banco Filipino closed in 1985 but reopened 9 years later after the Supreme Court declared the closure illegal. The High Court directed the BSP to let the bank continue operating.
On March 17, 2011, however, the Monetary Board of the BSP put Banco Filipino under receivership of the Philippine Deposit Insurance Corporation (PDIC), and called for liquidation on October 27, 2011.
BSP said Banco Filipino could not continue doing business as it was likely to involve losses to its depositors and creditors.
The Makati Regional Trial Court suspended the bank liquidation proceedings after a petition was filed by stockholders.
During the suspension of liquidation proceedings, BSP put on its website an invitation to bid on certain properties being sold by the bank, including Banco Filipino properties and assets.
Ekistics Philippines Incorporated, a Banco Filipino stockholder, sought a writ of injunction against the BSP's attempt to sell Banco Filipino assets.
The trial court granted the order on October 17, 2016.
In the November 2017 decision, however, the CA said the Makati RTC committed grave abuse of discretion in issuing the injunction, as Ekistics' claim to the corporate property of Banco Filipino as a stockholder was "inchoate because it is contingent on the presence of remaining assets after the corporation has settled all debts and liabilities upon its liquidation.”
Reconsidering: The CA eventually granted a motion for reconsideration that would prevent BSP from disposing of Banco Filipino's assets until questions regarding Banco Filipino's closure and liquidation were properly answered.
The CA in its decision said selling off Banco Filipino's assets might make appeals hollow, as they "effectively render a favorable resolution in these cases moot and academic."
"Certainly, we cannot countenance the said act of BSP as it not only interfered with but also undermined the exclusive jurisdiction of the liquidation court to adjudicate claims against Banco Filipino…. Considering the aforesaid reasons, we deem that the most prudent course of action is to reverse our assailed decision in order not to render the proceedings before the SC and this Court moot and academic,” the CA added.
Associate justices Ricardo Rosario and Maria Filomena Singh concurred with the decision. – Rappler.com
We mean business
We mean business in delivering to you the latest information about the economy. But as the saying goes, there’s no such thing as a free lunch.
Rappler aims to continue providing free and fearless journalism – without paywalls and editorially independent from outside interests.
However, we need your help. Reader support enables us to continue telling more stories.
By joining Rappler PLUS, you will receive our editorial newsletters and industry reports, get to join exclusive online conversations with our award-winning journalists, and be part of our monthly events.
Make your move now. Join Rappler PLUS.