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‘BANK RUN’

Banco Filipino blames BSP

MANILA, Philippines—All branches of Banco Filipino Savings & Mortgage Bank in Cebu and Dumaguete City were closed Tuesday, to the consternation of depositors.

Banco Filipino branches in Metro Manila were also shuttered.

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The thrift bank asked the Bangko Sentral ng Pilipinas (BSP) for immediate financial assistance, saying that it encountered heavy withdrawals from depositors worried about its financial health.

But the Aguirre-led bank also blamed the BSP for contributing to its woes, citing the non-implementation of a rebuilding plan that would require P25 billion in liquidity infusion by the banking regulator.

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Banco Filipino currently has about P17 billion worth of deposits in 62 branches—32 in Metro Manila and 30 outside the metropolis.

The BSP said it had asked Banco Filipino to clarify its financial situation to clients and to the banking regulator, following reports that the financial institution had declared a voluntary “bank holiday.”

In a press statement, the BSP acknowledged that it had received reports and complaints from Banco Filipino’s depositors from various parts of the country.

“Accordingly, we have sent a letter addressed to the management of Banco Filipino asking them to explain the bank’s status to its clients and to the BSP,” the regulator said. “We are now waiting for their official response.”

Still open

Banco Filipino vice chair Perfecto Yasay said the bank was still in operation, denying that it had taken a unilateral bank holiday.

Since Monday, there were talks in banking circles that some Banco Filipino branches in provincial areas had not opened and that their manager’s checks had bounced.

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Worried depositors

“We are still open but unfortunately our personnel fear for themselves, especially those in the branches, because we haven’t received any help from the BSP. It could be violent, as we’re talking about the right of depositors,” Yasay said.

Customers started to troop to Banco Filipino’s branches on Juan Luna Avenue and General Maxilum Avenue in Cebu City and A.C. Cortes in Mandaue City on Tuesday morning but only security guards faced the worried depositors.

The security guards said they were also surprised because there was no indication on Monday that the banks would be closed the following day.

No employee reported for work. Leaflets from Banco Filipino executive vice president Maxy Abad were distributed, confirming the closure of the bank’s branches on Tuesday.

In Dumaguete City, depositors were surprised to find the bank deserted on Tuesday save for the presence of security guards who advised them to return another day.

“We’re open but none of the employees reported for work,” a security guard explained to the Philippine Daily Inquirer, adding he did not know anything about the closure.

An insider in Dumaguete’s banking circles, who asked not to be identified, said that at about 11 p.m. on Monday, the employees were told not to report for work the next day.

Smear campaign

Banco Filipino Tuesday posted a statement outside its shuttered head office in Makati City saying that it had been “suffering from extraordinary financial panic” caused by a so-called “smear campaign” against it.

Banco Filipino said the adverse reports about the bank quoted the BSP as the source of “inaccurate and malicious imputations.”

“Kindly inform and clarify this matter to our depositors and assure them that as soon as we receive official notice of any favorable action taken by the Bangko Sentral ng Pilipinas or the Monetary Board, we shall advise them accordingly,” Abad said in the letter dated March 14.

Delisted

Shares of Banco Filipino were delisted by the Philippine Stock Exchange (PSE) effective March 10 for “continuous violation” by the bank of disclosure rules and failing to submit structured reports to the bourse.

Yasay, a former chair of the Securities and Exchange Commission, said an infusion was part of the BSP obligation to the bank.

Banco Filipino was shut down by the old central bank (the BSP’s predecessor) during the Marcos regime in the 1980s but was reopened in 1994 after the Supreme Court ruled that its closure was arbitrary.

Emergency assistance

“The bank is exhausting all efforts to protect its depositors by asking the BSP to stave off the heavy withdrawals by denying derogatory articles attributed to them and by providing emergency loan assistance after we had submitted official collateral,” Yasay said.

But he said that despite the urgency of all these requests, Banco Filipino had not received any official word from the BSP or the Monetary Board on the action they have taken.

P25-billion plan

Yasay is openly opposing the reappointment of Bangko Sentral Governor Armando Tetangco.

Yasay reiterated the need to immediately implement the approved P25-billion business plan as ordered by the Makati Regional Trial Court.

He said the court had also prohibited the BSP and the Monetary Board, its officials and agents, from committing any act prejudicial to the operation of the bank.

“We would like to assure all our depositors and the general public that as soon as we receive official notice of the action taken by the BSP and the Monetary Board then we shall advise them accordingly,” Yasay said.

Philippine Deposit Insurance Co. president Jose Nograles, said the PDIC, the agency mandated by law to oversee padlocked banks, had not received any order from the BSP to take over the bank.

Big overdraft

Yasay acknowledged that Banco Filipino had incurred a “very big” overdraft, which he attributed to the malicious campaign against the bank.

He noted that several tabloids and television stations were reporting that Banco Filipino was problematic and mismanaged.

“This smear campaign has no basis. It’s designed to destroy us once and for all because we still have claims that we’re pursuing (with the BSP),” he said.

“Our closure was illegal and the Supreme Court said [the Bangko Sentral is] liable to pay us. It’s now just a matter of us providing those damage claims. Now, we’re facing another threat due to lack of justice. That’s what we want the public to know: We are the good guys here.”

BSP-managed

Yasay said that since 1994, Banco Filipino had been under the strict supervision of a BSP-designated comptroller. No cash disbursement could be made without the nod of the comptroller, he said. “So, how can they say we’re mismanaged when we are practically being managed by a BSP comptroller?”

As early as November 2009, Yasay claimed the Monetary Board had approved the P25-billion financial assistance loan for Banco Filipino. But he noted that the BSP was insisting that it would provide the package only if Banco Filipino would drop all damage claims filed by the bank.

“We can’t do that. The BSP is not exercising its regulatory authority and instead is blackmailing us,” he said.

If Banco Filipino were to waive its damage claims, Yasay said the bank would be defenseless against any fault-finding by the BSP.

Solvent

Yasay said Banco Filipino remained solvent, claiming it had net capital assets of P25 billion which he said was very large for a thrift bank.

There is no way of confirming Banco Filipino’s financial condition as it has not submitted reports to corporate regulators. It was among the companies delisted by the PSE in its order effective March 10. There are no recent records of filings of financial statements with the PSE. With a report from Daxim L. Lucas

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