THE Court of Appeals (CA) stood path with its ruling on the legality of the closure of Banco Filipino Savings Mortgage Bank in 2011.
In a three-page resolution written by Associate Justice Noel Tijam, the CA’s Former Special Seventh Division found no reversible error in their November 23, 2012, amended decision which reversed its decision on January 27, 2012, ordering the Bangko Sentral ng Pilipinas (BSP) to reopen the bank.
It opined that no new arguments were presented which would warrant the reversal of their decision.
“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 ruling states.
“However, we had taken a second hard look of the same but we found no compelling reason to reverse our previous ruling,” it opined.
In the CA decision, it declared null and void the memorandum issued by the BSP and the Monetary Board (MB) placing Banco Filipino under receivership.
The Tijam division took over from the case after the entire CA former Special Fourteenth Division Division inhibited from the case.
The old decision of the CA ordering the reopening of the bank and infusion of funds was written by Justice Agnes Reyes-Carpio, along with Justice Vicente Veloso and Normandie Pizarro.
According to a well-placed source of The Manila Times, President Benigno Aquino 3rd exerted pressure after he got mad with the Reyes-Carpio ponencia because of their ruling. This resulted the inhibition of the entire division from the case.
In the Reyes-Carpio ponencia, the CA ruled that “as part of its rehabilitation, respondents Bangko Sentral ng Pilipinas and the Monetary Board shall, within 30 days from receipt hereof, extend to Banco Filipino Savings and Mortgage Bank” several assistance or support.
It includes a financial assistance in the amount which shall not be lass than and under such terms as contained or indicated in the business plan, special liquidity facility/fund which shall be equivalent to the amount of the deposit base of the bank and such other equitable regulatory reliefs which shall address the pernicious effects of the illegal closure.
They directed the BSP to provide financial assistance in the amount of not less than P25 billion as it ordered the reopening the banking firm.
The CA had held that it was necessary in order to ensure fast and immediate recovery of the bank from the ill effects of the illegal closure.
But in its new decision under Tijam, the CA ruled that when BSP and MB Resolution 372-A was issued on March 17, 2011, placing the savings bank under receivership and stopped its operations nationwide, “their actions were valid exercise of discretion as they are suitable and reasonable processes within the context of the pertinent law and, did not, by any means, amount to abuse of discretion, much less grave, correctible by certiorari.”
In the Tijam ruling, it junked the petition of Banco Filipino for its reopening since there is no certainty that it will not close down again.
Hence, there is no need for BSP and MB to infuse P25-billion for the said bank.
Based on the records submitted by BSP-appointed comptroller Director Leilanie Canullas, it was shown that the total assets of Banco Filipino is P25.201 billion as opposed to its total liabilities of P23.598 billion, for a net value of P1.602 billion. With this, the appellate court junked Monetary Board Resolution 372-A issued on March 17, 2011, that placed BFSB under receivership and stopped it from continuing its banking system in the Philippines.
With a slogan “Subok na Matibay, Subok na Matatag,” Banco Filipino was founded in 1964 by Tomas Aguirre.
The bank claimed that it has 32 branches in Metro Manila and 30 branches in nearby provinces.
On its website, the bank claimed that it was closed in 1985 by the Central Bank because of the alleged insolvency despite its outstanding performance but was reopened in 1994 following a Supreme Court decision.