Banco Filipino hits BSP over bid to get court suit immunity

MANILA, Philippines – The recently closed Banco Filipino Savings & Mortgage Bank has assailed moves by the Bangko Sentral ng Pilipinas to gain immunity from court cases related to bank-closure orders.

“What they want is absolute power,” Banco Filipino vice chair Perfecto Yasay Jr. complained, in an interview after a press conference on Tuesday, in Ermita, Manila.

In March, after the Monetary Board of the BSP closed down Banco Filipino, the two parties filed criminal complaints against each other with the Department of Justice. The bank insists the closure order was illegal and has charged the BSP officials with graft; the BSP has sued the savings bank on the basis of alleged insolvency and unsound business practices.

The central bank, in proposing the BSP charter amendment to the House of Representatives, expressed concern that their examiners have become vulnerable to lawsuits from owners of banks ordered closed.

As a representative of one of those closed banks, Yasay criticized the BSP for trying to weasel out of legal responsibilities. “That’s precisely what the law intends. They’ve practically been excused from due process already by being allowed to close banks without hearings,” he said.

Yasay maintained that according to the 2010 Report on Examination on Banco Filipino, the BSP had no basis to declare them insolvent. He added that the BSP did not follow correct procedures in charging Banco Filipino with unsafe business practices.

“[After these] abuses, if they are given full [court] immunity, they won’t even be held accountable anymore,” Yasay pointed out.

Yasay said the Congress has rightfully asked the BSP to “exercise extraordinary diligence” in executing their “awesome powers” granted under the New Central Bank Act.

He pointed out “the extraordinary diligence requirement did not unduly hamper” the BSP to shut Banco Filipino down.