PDIC files charges anew vs. Banco Filipino executives

The chairman and president of the closed Banco Filipino Savings and Mortgage Bank, Inc. and 15 other former directors and officers are facing criminal charges filed against them by the Philippine Deposit Insurance Corporation (PDIC) for violating the PDIC Charter.

In a statement on Wednesday, the PDIC said the bank conducted business “in an unsafe or unsound manner in violation of Republic Act No. 3591.”

The PDIC said the criminal act caused losses to the bank amounting to P789.46 million.

The charges were filed with the Justice Department’s Task Force on Financial Fraud against the Banco Filipino’s chairman and president, vice chairman, four directors, corporate secretary, executive vice president, and other high-ranking officials.

In its complaint, the PDIC noted that P700 million in legal fees were paid to various legal firms without any contracts or supporting documents at a time when the bank was under “dire financial difficulty.”

A partner of the law firm who was paid P225.87 million was also the director of the bank.

The PDIC earlier filed three criminal complaints involving P5.2 billion against the former directors, officers, and employees of Banco Filipino due to anomalies. 

The Bangko Sentral ng Pilipinas (BSP) ordered the closure of the 62-unit thrift bank in 2011.

Upon its takeover of Banco Filipino, the PDIC discovered that the payments to the legal firms were made without the required “pass upon” review of then-BSP Comptroller.

Under the PDIC Charter, the conduct of business in an unsafe or unsound manner may be punished with imprisonment from six years to 12 years, or a fine of not more than P10 million, or both, at the discretion of the court.

“PDIC continues to pursue legal actions against bank officials and personnel who engage in unsafe or unsound banking practices that threaten the stability of the country’s banking system,” the agency said. —Julia Mari Ornedo/LDF, GMA News