CA upholds decision to close down Banco Filipino

MANILA, Philippines - The Court of Appeals (CA) is standing firm on its decision last year to close down   Banco Filipino Savings and Mortgage Bank for failing to settle its obligations.

In denying the motion for reconsideration, the CA held that the bank’s shareholders have failed to raise new arguments.

It also refused to issue a temporary restraining order (TRO) and/or writ of preliminary injunction against the implementation of the Jan. 27 amended 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,” read the CA decision.

“However, we had taken a second hard look of the same but we found no compelling reason to reverse our previous ruling.”

Shareholders told the CA that Banco Filipino has sufficient realizable assets to pay its liabilities; that the 2010 return on equity does not at all mention any liability that became due which it did not pay as well as any liability that is yet to become due; and that they do not need to make a separate plan because one was already prepared in collaboration with the  Monetary Board of the Bangko Sentral ng Pilipinas (BSP).

“Having approved the financial assistance for Banco Filipino, the  Monetary Board has acknowledged the fact that it is qualified to be rehabilitated and to continue its business with safety to depositors and the general public,” they added.

However, the CA ruled that the appeal must be denied for lack of merit.

On March 17, 2011, the Monetary Board placed Banco Filipino under the receivership of the Philippine Deposit Insurance Corp. (PDIC).

Banco Filipino shareholders  elevated the case to the CA, which ordered the BSP to reopen the bank on Jan. 27, 2012 under their comptrollership, complete with a viable rehabilitation plan.

The BSP was also given 30 days to extend financial assistance to Banco Filipino.

However, in an amended decision, the CA admitted erring in ordering the reopening of Banco Filipino.