BANCO FILIPINO BRANCHES REMAIN SHUTTERED / SHUTDOWN ORDER BY BSP

MANILA, MARCH 19, 2011 (BUSINESS WORLD) By Diane Claire M. Jiao, BusinessWorld Posted at 03/17/2011 8:54 AM | Updated as of 03/18/2011 1:04 AM-

Thrif Bank Banco Filipino Savings and Mortgage Bank (Banco Filipino) remained unable to service its clients yesterday, with a senior official again blaming an alleged smear campaign for the bank's woes.

[PHOTO - 'FINEX' JANUARY 2011 INDUCTION OF BOARD OF TRUSTEES]

Financial executives called for an immediate resolution of the issue, saying claims that politicking was involved could spread depositor panic to the rest of the banking system.

"There should be no political considerations on issues such as bank closures. These allegations must be addressed right away," Financial Executives Institute of the Philippines director Anton D. Mauricio said at the sidelines of a Finex meeting yesterday.

The government should project an overwhelming sense of fairness since even just the perception of politicking in selecting which banks get closed could scare off consumers and businesses, Mr. Mauricio warned.

"When transacting with banks, you don’t expect the government to be involved since that is not their money. It’s your money, and you won’t be able to get it if the government closes down the bank," he said.

An operator who answered the Banco Filipino hotline yesterday said "all of our branches remain closed today (Wednesday)." Asked when operations would resume, the operator said, "we are not yet sure because [our bank] is still discussing problems with the BSP (Bangko Sentral ng Pilipinas)."

Banco Filipino vice-chairman Perfecto R. Yasay, who has claimed the central bank wanted the financial institution closed anew, denied that they were not servicing clients.

"We are open, but there are no tellers because they have been receiving death threats from clients who want to withdraw but we cannot service," he told BusinessWorld.

The BSP, said Mr. Yasay, continues to remain mum on the bank’s request for a P3-billion emergency loan after massive withdrawals since last week led to a P903-million overdraft.

"Up to now, they have not given us any reason why they have not given any due course [to Banco Filipino].

"They (the BSP) just told us that they cannot give [us] due course, but we do not know the reason why," he said.

He also questioned reports that the Court of Appeals had junked a lower court ruling ordered the BSP to infuse money into Banco Filipino.

"There was no decision from the Court of Appeals that reverses the injunction of the position of the court of Makati on granting P25 billion financial assistance to our bank," Mr. Yasay claimed.

"These are all smear campaigns," he said.

On Tuesday, Mr. Yasay claimed the BSP did not want to infuse the P25 billion due to Banco Filipino’s refusal to drop litigation involving its 1985 closure.

That shutdown was ordered by the then Central Bank of the Philippines, which said Banco Pilipino could not repay its loans. The Supreme Court ruled the closure illegal in 1991, allowing the bank to re-open in 1994.

Banco Filipino subsequently filed an P18.8-billion damage suit against the Central Bank Board of Liquidators and the BSP.

At the Finex meeting, life member Lita R. Goño said Banco Filipino remained saddled by the experience of its earlier closure.

"It was a very progressive bank before, and then it was picked on by the government and now they’re having a hard time," she said.

If mismanagement is proven, however, a fresh closure would be accepted, the Finex members said.

"This is the natural consequence of our banking system improving to reach global standards," Mr. Mauricio said. "This will also pressure the banking system to quickly implement the proper governance procedures to make it stronger."

The BSP, however, needs to act.

"BSP needs to help Banco Filipino to protect the banking system. If they just let a big bank like that fall, then what more for smaller banks...?" Ms. Goño asked.

REPORT ON THE WEB FROM EasternFreedom is based in Manila, National Capital Region, Philippines,
and is Stringer for Allvoices Online - REPORT & PHOTO FROM ALL-VOICES.

Developments on the Shutdown Order of Banco Filipino by BSP : Philippines | Mar 18, 2011 By EasternFreedom send a private message

Makati City, Philippines --- Today marks the second day of shutdown of Banco Filipino (BF). This came after the Bangko Sentral ng Pilipinas (BSP) released the order and announced the financial insolvency of BF yesterday.

The main office of BF in de la Rosa St. Makati City, was not in its usual bouyant and pleasant transacting ambience. It was locked up and unlit.

The two security guards standing by the steps of BF no longer greeted clients "Good Morning/ Afternoon". Instead, they asked people to read the posted announcement of Philippine Deposit and Insurance Corporation (PDIC).

In recollection, BSP specifically instructed PDIC to facilitate claims transactions of clients with active BF accounts beginning today. PDIC is a government corporation that insures deposit claims up to PhP 500,000.

PDIC staff entered the premises of BF this morning but went back to their respective branch offices in the afternoon. BF clients who received late notifications about the incident were urged to transact with PDIC SSS Ayala Avenue branch.

However, BF clients came to PDIC SSS branch only to be informed about the open transaction of PDIC inside BF premises starting March 20, 2011 .

A PDIC employee who, after briefing BF clients, disclosed that BF did not leave any bank information in the main branch.

Early in the morning, BSP declared that BF employees will be sanctioned for participating in the recent nationwide closure of BF.

It should be remembered that the enmity between BF and BSP has a long history way back in 1985 when SC did not uphold the closure of BF by BSP. BF was once again allowed to operate in 1994. Last March 2010, the Makati Regional Trial Court required BSP to provide BF some rehabilitation assistance and pay the latter cost in damages --- all amounting to at least PhP 30 billion pesos.

Last Tuesday, however, BSP insisted it does not owe BF anything and avowed to appeal the case to the Supreme Court. The basis of the closure of BF, as argued by BSP, was due to the numerous complaints filed by the former's clients.

However, both BF and BSP have independently claimed they are both victims of smear campaigns of each other.

The official shut down of BF is indeed a sad news that shocked and saddened many Filipinos. BF was a pioneer of kiddie savings promotions and the highest interest paying bank in the country. It was the longest running savings and mortgage bank, with nationwide operations, before Tuesday.

Public Affairs:

ANNOUNCEMENTS TO BF CLIENTS (NATIONWIDE)

1. Bring your bank papers and at least 2 valid IDs

2. Go to respective BF branches (where you have active accounts) and PDIC personnel shall facilitate your claims transactions

3. (for Makati Branch only) Attend Depositor's Forum on March 22, 2011, Tuesday at PDIC SSS Branch. For other branches, clients are requested to inquire with local PDIC branches.


Chief News Editor: Sol Jose Vanzi

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