CA upholds closure of Banco Filipino

The Court of Appeals has upheld the closure of the Banco Filipino Savings Mortgage Bank in 2011 for failing to settle its obligations.

This was after the appeals court junked a motion for consideration filed by shareholders of Banco Filipino and affirmed its November 23, 2012 amended decision.

The amended decision was a reversal of the CA's original decision issued January 27, 2012 ordering the Bangko Sentral ng Pilipinas to reopen the bank.
 
“After a careful review of petitioners’ motion for reconsideration, we find that the issues and arguments raised in the said motion were already comprehensively discussed and passed upon by this Court in its amended decision,” the CA ruled.

The CA said it "took a second hard look" at its previous ruling but found "no compelling reason to reverse our previous ruling."

Banco Filipino had earlier argued that:

- it has sufficient realizable assets to pay its liabilities;

- that the 2010 return on equity does not at all mention any liability that became due, which it did not pay as well as any liability that is yet to become due; and

- that there is no need for the stockholders of BF to make separate plan because one was already prepared in collaboration with the Bangko Sentral ng Pilipinas Monetary Board.

BF had also stressed that the BSP-MB has acknowledged the fact that it is "not insolvent and is qualified to be rehabilitated and to continue its business with safety to its depositors and the general public."

On March 17, 2011, the BSP-MB placed BF under the receivership of the Philippine Deposit Insurance Corp. (PDIC) after noting that the thrift bank “was no longer able to settle its obligations.”

This prompted the thrift bank to seek refuge from the CA, which in turn ordered BF'S re-opening on January 27, 2012 under the BSP-MB's comptrollership, “complete with a viable rehabilitation plan, in order to ensure [the] fast and immediate recovery of the bank from the ill-effects of the illegal [closure].”

The CA however later reversed its ruling and admitted it erred in ordering the reopening of the bank when it considered the supposed appraisal reports belatedly submitted by the BF’s shareholders.
 
The CA said the state deposits insurer found that the thrift bank has P11.77 billion in total assets and P23.03 billion in liabilities when BF was placed under PDIC’s receivership.

The CA noted in its ruling BF's admission that even if the thrift bank was able to secure an emergency loan from the BSP, “such amount will just be exhausted in a matter of days in view of the deposits [that] the bank currently services for its depositors."
 
“This only confirms that Banco Filipino can no longer independently resume its business with safety to its creditors, depositors and the general public and/or that it can still operate without incurring losses,” the CA added. — Mark Merueñas/BM, GMA News