EDITORIAL - Money traps

Once again, depositors are seeing their money trapped in a commercial bank that has gone belly-up. The Bangko Sentral ng Pilipinas announced yesterday that it had shut down and placed under receivership the Banco Filipino Savings and Mortgage Bank after its liabilities overtook its assets by P8.4 billion. Banco Filipino, owned by the Aguirre family, still owes the BSP P2.6 billion of the P3.5 billion it received as emergency loan in 2002 from the Bangko Sentral.

BSP officials said of the 177,652 account holders of Banco Filipino, 97 percent are small depositors covered by the deposit insurance of P500,000 each. About 53 percent have deposits of no more than P5,000 each, and these account holders can recover their money quickly, BSP officials said. But what about those whose deposits exceed the amount covered by insurance?

It’s not the first time that depositors are left holding the bag in the banking industry. In 2008, 133,000 account holders in rural banks of the Legacy Group filed claims amounting to P14 billion after the banks declared a holiday and filed for bankruptcy. Holders of Legacy pre-need and pension plans also found themselves losing life savings and investments in their children’s education.

The controversial founding owner of the Legacy Group, former town mayor Celso de los Angeles, also headed the National Home Mortgage and Finance Corp. during the Arroyo administration and was once accused of being a jueteng lord. Said to be battling cancer these days, De los Angeles allegedly enjoyed the protection of a member of the Securities and Exchange Commission, Jesus Enrique Martinez, and Parañaque Rep. Eduardo Zialcita. Martinez was replaced at the SEC by Manuel Gaite, a Malacañang official who reportedly played a key role in trying to keep Rodolfo Lozada Jr. from testifying at the Senate about the ZTE corruption scandal. Gaite enjoys tenure at the SEC.

Since the Legacy scandal, what has been done to improve corporate regulation and promote responsible banking in this country? The troubles besetting Banco Filipino should remind the Aquino administration that effective regulation and tighter banking policies are needed to strengthen the industry and protect the public.