Banco Filipino. AFP FILE PHOTO
The Court of Appeals (CA) has overturned a Makati court ruling ordering the Bangko Sentral ng Pilipinas (BSP) to release P25 billion in financial assistance to Banco Filipino.
The appellate court’s special 13th Division granted the central bank’s petition that questioned the order of Judge Joselito Villarosa of Makati Regional Trial Court Branch 66 for the BSP to approve Banco Filipino’s business plan and provide it with P25 billion in assistance.
The appellate court also ruled that the judge committed grave abuse of discretion when he issued a temporary restraining order (TRO) stopping the BSP from performing it regulatory functions over the bank.
“For lack of jurisdiction, the Regional Trial Court, Branch 66, Makati City, is ordered to stop and desist from continuing with the proceedings of Civil Case No. 10-1042, other than to dismiss the said case,” the appellate court said in a ruling on Oct. 3.
Banco Filipino had asked the trial court to order the central bank to approve its business plan and release P25 billion worth of financial assistance.
The savings bank claimed that it was entitled to the financial assistance based on the 1991 Supreme Court decision which ordered the reopening and reorganization of Banco Filipino after its closure in 1985.
On Oct. 28, 2010, Villarosa issued a TRO stopping the BSP from enforcing regulatory measures “calculated to coerce” Banco Filipino to withdraw its suits and damage claims against the central bank.
On Nov. 18, 2010, the judge ordered the BSP and its Monetary Board to “immediately implement (BSP’s) approved business plan by releasing its financial assistance and package of regulatory relief without delay.”
The BSP and the Monetary Board, represented by lawyers Simeon Marcelo, Augusto San Pedro Jr. and John Balisnomo, questioned the judge’s orders the appellate court.
In its Oct. 3 ruling, the Court of Appeals held that there was “undue haste” on the part of Villarosa in issuing the TRO, adding that it violated the central bank’s rights to due process.
“To be sure, the Supreme Court did not intend to dictate how Banco Filipino should be reorganized and what (the BSP) should do under the premises in the process of reorganizing Banco Filipino,” the tribunal said.
The BSP placed Banco Filipino under receivership on March 17 this year, three days after the thrift bank declared a bank holiday.
The BSP said the bank had to be closed because it was insolvent. The liabilities of Banco Filipino had exceeded its assets by P8.4 billion, the BSP said.