CA overturns RTC on BSP, BF dispute

MANILA, Philippines - The Court of Appeals (CA) has overturned an earlier ruling of the Makati City Regional Trial Court (RTC) ordering the Bangko Sentral ng Pilipinas (BSP) and Monetary Board (MB) to release up to P25 billion in financial assistance package and other regulatory relief to the now closed Banco Filipino Savings and Mortgage Bank.

In a 25-page decision, the special 10th division of the appellate court ordered the dismissal of the case filed by Banco Filipino against BSP and MB and also nullified the ruling of the Makati RTC for the release of the aid.

The CA said the trial court should have not acted on the case for lack of jurisdiction.

“The RTC has no jurisdiction over the petition for certiorari and mandamus filed by Banco Filipino in Civil Case No. 10-1042. It is this court (CA) that has jurisdiction over such petition pursuant to Rule 65, Section 4 of the 1997 Revised Rules of Civil Procedure.

“Wherefore, the petition (filed by BSP and MB) is granted. The order dated Nov. 17, 2010 issued by respondent Judge Joselito C. Villarosa of the Regional Trial Court, Branch 66, Makati City, in Civil Case No. 10-1042, is annulled and set aside. In lieu thereof, judgment is hereby rendered dismissing Civil Case No. 10-1042 on the ground of RTC’s lack of jurisdiction over the same,” stated the ruling penned by Associate Justice Hakim Abdulwahid.

Associate Justices Noel Tijam and Ricardo Rosario concurred with the ruling.

Last March, the CA issued a writ of preliminary injunction against the order of Judge Villarosa directing the bank and its policy-making body, the Monetary Board, to implement its Resolution No. 1668 issued on Nov. 19, 2009.

The CA held that BSP and MB “stand to suffer grave and irreparable injury” if the trial court’s order is not enjoined pending the decision on the merits of the case.

In the assailed order, the RTC restrained both MB and BSP officers, employees and representatives “from enforcing other regulatory measures and abuses calculated to coerce petitioner (Banco Filipino) into agreeing to drop and/or withdraw its suits and damage claims against respondents (MB and BSP) and to waive future claims against respondents or their officers, employees, representatives and all persons acting in their behalf.”

The BSP and the MB were also restrained by the trial court “from continuing and committing acts prejudicial to petitioner’s (Banco Filipino’s) operation.”

In its petition, BSP and MB argued that the Makati RTC violated their right to due process when it took cognizance of the case filed by Banco Filipino despite its lack of jurisdiction.

The petitioners further argued that allowing the case to proceed would prevent BSP from performing its constitutionally mandated duty to provide policy direction in banking activities and to supervise the operations of banks.