House inquiry into state of Phl banking pushed

CEBU, Philippines - Cebu Sixth District Rep. Gabriel Luis Quisumbing has filed a resolution seeking to investigate the state of bank stability in the country following the recent incident involving the LBC Development Bank which had been placed under receivership of the Philippine Deposit Insurance Corporation.

Quisumbing, in his House resolution 1729, wants the committee on financial intermediaries and other committees of the House to conduct an inquiry, in aid of legislation, on the Bangko Sentral ng Pilipinas’ standards and regulations.

Quisumbing expressed concerns for the depositors of the LBC Bank who were all caught by surprise when their bank suddenly closed last September 9.

He said, the bank’s closure last week especially in its Cebu City branch has dismayed several depositors. In fact, some depositors were in the emergency situation during the time and were in need of money for the hospital.

Quisumbing urged both the BSP and the PDIC to work overtime to pay the depositors’ claims.

“This also gives us cause to review the present standard and banking regulations of BSP. We need to look into reports that LBC bank has been offering higher than average interest rates for deposits. If this is true, then why such an unsound banking practice left unchecked,” Quisumbing said.

According to him, LBC Bank was not the only bank in the country that has been placed under receivership. He said there were already banks previously suffered the same fate like the Bank of East Asia, Pilipino Rural Bank and Philippine Countryside Rural Bank in Cebu, First Interstate Bank in Tacloban City, Rural Bank of Bais, Rural Bank of Parañaque, Rural Bank of San Jose, Rural Bank of Calatagan and Filipino Mortgage and Savings Bank.

LBC bank is the financial services unit of the LBC  Group of Companies, a conglomerate primarily involved in the courier and cargo service and money remittance service which has 20 branches nationwide including its main outlet in Makati City with an estimated P 6.09 billion in deposits. (FREEMAN)