Go after Singapore, BSP says

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has ruled that Filipino investor Washington Lou should go after ING Asia Private Bank Limited of Singapore (IAPBL Singapore), not ING Bank N.V. - Manila Branch (ING Manila Branch).

In a supplement position paper submitted to the House committee on bank and financial Intermediaries, BSP managing director Johhny Noe E. Ravalo also said “Mr. Lou has no account with ING Manila Branch. To fund his investments through IAPBL Singapore, Mr. Lou directly remitted his money to Singapore.”

Ravalo added that Lou has not denied that he signed a disclosure agreement, which agreement would have explained the investment risks. Besides, as an investor, Lou has a certain level of market awareness and, thus, is not entitled to the same level of protection as an ordinary individual.

“As an investor, Mr. Lou deliberately took on credit and market risks in the pursuit of investment profits and, thus, investment profits and losses accrue solely to Mr. Lou. This is the quid pro quo – as any gains from the investments belong to Mr. Lou, so should investment losses due to credit and market risks be borne solely by Mr. Lou,” the bank regulator added.

In the supplemental position paper in relation to House Resolution 779, the BSP official explained that Filipinos are free to remit their funds offshore and open accounts in financial institutions outside the Philippines.

But that likewise means that they remove their funds and accounts from the Philippine banking system.

“Necessarily, these Filipinos such as Mr. Lou divest the BSP of jurisdiction over their funds and accounts and, more importantly, remove these funds and accounts from the protections afforded by Philippine laws,” Ravalo pointed out.

The BSP position paper was a follow up to the documents and verbal testimonies given by the regulator in relation to a complaint filed by Lou with the Financial Consumer Affairs Group of the BSP against ING Manila Branch. The complainant also filed an administrative complaint against officers of ING Manila Branch with BSP’s Office of Special Investigation (OSI).

A similar complaint reached the House of Representatives, resulting in the investigation of the House Committee on Bank and Financial Intermediaries.

Lou claims that he was defrauded by ING of $6.8 million after investing $3.25 million in 2008.

The BSP pointed out the IAPBL Singapore (now known as Bank of Singapore) and ING Manila Branch are different entities and operate in different countries with different laws.

After preliminary hearings, the House committee told Lou not to use the Philippine Congress as his collection agent, and to sue in Singapore instead. In fact, he first filed a complaint with the Bacolod regional trial court but was told to bring his case to the Singapore courts.