This developed as the SC Second Division denied with finality the motion of Fernandez’s heirs to dismiss the case filed by the bank in 1995 before the Makati regional trial court against former Central Bank officers involved in the closure with the use of military forces.
The High Court said the bank’s shutdown was done "arbitrarily and with grave abuse of discretion."
At the time of its closure in 1985, Banco Filipino was the biggest thrift bank in terms of deposits, resources and branches nationwide. Its total deposits reached P3.6 billion at the height of its popularity in the early 1980s.
From November 1983 to June 1984 however, the bank experienced heavy withdrawals, prompting its management to seek assistance from the Central Bank in the form of an emergency loan.
It was forced to declare a bank holiday on July 17, 1984 and was closed six months later on Jan. 25, 1985 on orders of the Central Bank allegedly due to weak financial position.
It was reopened only nine years later on July 1, 1994 through Monetary Board Resolution No. 427. It has since resumed its full banking services with trust operations.
In pursuing the case, the bank has reportedly paid an unprecedented P94 million in filing fees.
Banco Filipino officers are optimistic that the determination of the bank to claim for damages will now proceed and that justice, though delayed, will be done on the bank.
In a statement, Banco Filipino said that it can now continue with the presentation of its voluminous documentary evidence at the Makati RTC for its separate civil cases against the Monetary Board.
The heirs of Fernandez sought the dismissal of the bank’s damage suit before the lower court for a simple technicality, which was the failure of the Banco Filipino lawyers to appear in the Oct. 27, 1999 pre-trial of the case. But it was later proven that the lower court failed to notify the bank of the trial schedule.
A similar action to dismiss the case was also filed by the Central Bank before the SC in 1998 claiming, among others, that the suit was barred by an earlier court decision and prescription as well as the "lack of cause of action."
The SC denied the arguments.