Solon pushes banking stability probe

A CEBU congressman is calling for a House inquiry on the bank stability of the country after the LBC Development Bank closed last Sept. 9.

Rep. Luis Gabriel Quisumbing (Cebu 6th district) said he submitted  House Bill No. 1729, which calls for the review of present standards and banking regulations of Bangko Sentral ng Pilipinas.

“We need to look into reports that LBC Bank was offering higher than average interest rates for deposits. If this is true, then why was such an unsound banking practice left unchecked,” Quisumbing said. He said he was concerned of the depositors of the LBC Bank, who were mostly overseas Filipino workers sending their remittances through the bank’s remittance firm—LBC Express.

“We call upon the concerned agencies, the BSP and the Philippine Deposit Insurance Company (PDIC) to work overtime in paying back the depositors’ claims,” Quisumbing said. Deposits up to P500,000 are insured with the PDIC. Payment of claims in excess of P500,000 shall depend on the liquidation of the bank’s assets.

Quisumbing said he submitted the House bill after the latest bank closure. The other banks that closed in the past years include 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 in  Negros  Oriental, Rural Bank of Parañaque, Banco Filipino Mortgage and Savings Bank. /REPORTER JUCELL MARIE P. CUYOS