MANILA, Philippines—The Court of Appeals stood pat on its last year’s ruling affirming the legality of the closure of Banco Filipino (BF) Savings Mortgage Bank for failure to settle its obligations.
In a three-page resolution by the appeals court Former Special Seventh Division dated Nov. 23 but made public Tuesday, it held that the shareholders of BF failed to raise new arguments to warrant a reversal of its earlier ruling.
“After a careful review of petitioners’ motion for reconsideration, we find that the issues and arguments raised in the said motion were already comprehensively discussed and passed upon by this Court in its amended decision,” the appeals court said.
“However, we had taken a second hard look of the same but we found no compelling reason to reverse our previous ruling,” it added.
In their motion for reconsideration, the shareholders said that BF has sufficient realizable assets to pay its liabilities; that the 2010 return on equity does not at all mention any liability that became due, which it did not pay as well as any liability that is yet to become due; and that there is no need for the stockholders of BF to make separate plan because one was already prepared in collaboration with the BSP-Monetary Board.
They added that having approved the financial assistance for BF, the BSP-MB has acknowledged the fact that it is not insolvent and is qualified to be rehabilitated and to continue its business with safety to its depositors and the general public.
On March 17, 2011, the MB issued Resolution No. 372-A, closing down BF and placing it under the PDIC’s receivership, saying it was insolvent.
The MB issued the order after the bank’s branches failed to service withdrawals and fund checks. An examination by BSP showed BF’s liabilities topped its assets by P8.4 billion.
Ten months later, the appeals court ruled that monetary authorities violated BF’s right to due process when they issued and implemented the resolution. It also ordered the BSP to extend a P25-billion financial assistance to BF, which, according to the shuttered bank, was the amount it needed to get back on its feet.
BF lawyers had argued that the bank was not insolvent, and blamed its financial woes to BSP’s refusal to extend the P25-billion aid.
In its November 2012 ruling, the appeals court said BF “has no financial plan which takes into consideration the possibility of sourcing funds from a different person or entity” apart from the BSP.
It said this means, the bank will “utterly rely on public funds” which will be tantamount to “a government dole-out at the expense of the public with no definite guarantee of return.”
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