Busuego vs.

CA [304 SCRA 473 (March 11 1999)

Power of Monetory Board

Facts: The 16th regular examination of the books and records of PAL Employees Savings and Loan
Association (PESALA) was conducted by a team of CB Examiners.Several irregularities were found to
have been committed by the PESALA officers. Hence, CB sent a letter to petitioners for them to be
present at a meeting specifically for thepurpose of investigating said anomalies. Petitioners did not
respond. Hence, the Monetary Board adopted a resolution including the names of the officers of PESALA
in thewatchlist to prevent them from holding responsible positions in any institution under CB
supervision.Petitioners filed a petition for injunction against the MB in order to prevent their names
from being added in the said watchlist. RTC issued the TRO. The MB appealed to theCA which reversed
RTC. Hence, this petition for certiorari with the SC.Petitioners contend that the MB resolution was null
and void for being violative of their right to due process by imposing administrative sanctions where the
MB is not vested withauthority to disqualify persons from occupying positions in institutions under the
supervision of CB.

Issue: Whether or not the MB resolution was null and void.

Held: NO. The CB, through the MB, is the government agency charged with the responsibility of
administering the monetary, banking and credit system of the country and is granted the power of
supervision and examination over banks and non-bank financial institutions performing quasi-banking
functions of which savings and loan associations,such as PESALA, form part of.The special law governing
savings and loan associations is R.A. 3779, the Savings and Loan Association Act. Said law authorizes the
MB to conduct regular yearlyexaminations of the books and records of savings and loan associations, to
suspend a savings and loan association for violation of law, to decide any controversy over
theobligations and duties of directors and officers, and to take remedial measures. Hence, the CB,
through the MB, is empowered to conduct investigations and examine therecords of savings and loan
associations. If any irregularity is discovered in the process, the MB may impose appropriate sanctions,
such as suspending the offender fromholding office or from being employed with the CB, or placing the
names of the offenders in a watchlis