Banco Filipino stockholders ask CA to hold BSP closure order

Stockholders of the embattled Banco Filipino Savings and Mortgage Bank have asked the Court of Appeals to prevent the Bangko Sentral ng Pilipinas (BSP) from implementing the closure order issued against the bank last week. In a 74-page petition filed with the appellete court on Monday, March 21, the stockholders said BSP's closure order was "arbitrary, whimsical, capricious, unreasonable, and illegal." "The finding of BSP that Banco Filipino supposedly has insufficient realizable assets to meet its liabilities and cannot continue in business without involving probable losses to its depositors and creditors is belied by the fact that Banco Filipino has proven itself to have realizable assets, the value of which far exceeds its liabilities," the petitioners said. Among the petitioners are Metropolis Development Corporation, Apex Mortgage and Loans Corp., BF Citiland Corporation, Grand Farms, Inc., Spring Sun Management Systems Corp., Tropical Land Corporation, El Grande Development Corporation, CLI Management Corporation, Casa Tropical, Inc., Filipino Vastland Co. Inc., Pilar Development Corporation, PSC Financial Corporation, Top Management Programs Corp, all stockholders of BF. The petitioners then asked the Court of Appeals to immediately issue a temporary restraining order (TRO) to bar the BSP from implementing the closure order, Resolution No. 372-A, which was issued by the Monetary Board, the central bank's policy-setter. They added that the bank does not have a negative net asset value and that its total assets exceed its liabilities by around P25 billion. "Unless restrained, petitioners will suffer great and irreparable injury as the very existence of Banco Filipino is imperilled by the continuing injury being caused by respondents enforcement and continuing implementation of the otherwise illegal closing and receivership of Banco Filipino," said the petitioners. At present, the House of Representatives is conducting an inquiry on the closure of Banco Filipino.

Closure, PDIC receivership On Thursday last week, , the seven-member Monetary Board ordered the bank's closure and placement under the receivership of Philippine Deposit Insurance Company (PDIC). The central bank said the Aguirre-owned bank's liabilities topped its assets by P8.4 billion. The BSP then ordered that assistance be immediately given to Banco Filipino's 177,652 depositors. "Banco Filipino cannot continue in business without involving probable losses to its depositors and creditors," said BSP Deputy Gov. Nestor Espenilla Jr. The Monetary Board also took note that Banco Filipino’s management and board of directors failed to restore its financial health and viability after having been given more than ample time to address its problems. Espenilla said the Monetary Board authorized the filing of appropriate cases against the directors, officers, and other individuals who may be found in violation of banking laws and BSP rules and regulations. In 2002, the BSP extended P3.5 billion in emergency loan to Banco Filipino, of which P2.6 billion remains unpaid. Espenilla said the Monetary Board had rejected renewed pleas of Banco Filipino to extend another P3 billion in emergency loan to cover its huge "overdraft" amounting to more than P900 million. The bank, founded in 1964 by Don Tomas Aguirre, has 32 branches in Metro Manila and nearby areas as well as 30 branches in the provinces. On its website, Banco Filipino is saying it was ordered closed by the Central Bank in 1985, as it was supposedly insolvent, despite the bank's outstanding performance. As early as 1966, Banco Filipino emerged as the biggest savings bank in the country with 92 branches prior to its closure. In 1994, the bank opened 15 of its 92 branches and now has 62 branches operating nationwide. — RSJ, GMA News