VOL.

142, JULY 8, 1986 523

Banco Filipino vs. Monetary Board

No. L-70054. July 8, 1986.*

BANCO FILIPINO, petitioner, vs. MONETARY BOARD,

ET AL., respondents.

Evidence; Motions; Statutes declaring certain official records

confidential must be liberally construed and an exception thereto is
deemed implied when the records are needed in a court of justice.
—The motion for the production of the subject documents was
filed by petitioner pursuant to Section 1, Rule 27, of the Rules of
Court. It has been held that “a party is ordinarily entitled to the
production of books, documents and papers which are material
and relevant to the establishment of his cause of action or
defense” (General Electric Co. vs. Superior Court in and for
Alameda County, 45 C. 2d 879, cited in Martin, Rules of Court,
3rd edition, Vol. 2, p. 104). “The test to be applied by the trial
judge in determining the relevancy of documents and the
sufficiency of their description is one of reasonableness and
practicability” (Line Corp. of the Philippines vs. Moran, 59 Phil.
176, 180). “On the ground of public policy, the rules providing for
production and inspection of books and papers do not authorize
the production or inspection of privileged matter, that is, books,
papers which because of their confidential and privileged
character could not be received in evidence” (27) CJS 224). “In
passing on a motion for discovery of documents, the courts should
be liberal in determining whether or not documents are relevant
to the subject matter of action” (Hercules Powder Co. vs. Haas
Co., U.S. Dist. Ct. Oct. 26, 1944, 9 Fed. Rules Service, 659, cited
in Moran, Comments on the Rules of Court, 1979 Ed. Vol. 2, p.
102). Likewise, “any statute declaring in general terms that
official records are confidential should be liberally construed, to
have an implied exception for disclosure when needed in a court of
justice” (Wigmore on Evidence, Vol. VIII, p. 801, citing the case of
Marbury vs. Madison, 1 Cr. 137, 143).
Same; Same; Central Bank documents necessary and relevant
to be furnished the CB’s adversary to enable the latter to prepare
itself for the case may be ordered produced by the Central Bank.—
With respect to Items Nos. 3 to 9, these are the annexes to the
Supervision and Examination Sector, Dept. II (SES) Reports
submitted to the Central Bank and Monetary Board which were
taken into considera-

_______________

* EN BANC.

524

524 SUPREME COURT REPORTS ANNOTATED

Banco Filipino vs. Monetary Board

tion by said respondents in closing petitioner bank. A copy of the

SES Reports was furnished to the petitioner. We, therefore, fail to
see any proper reason why the annexes thereto should be
withheld. Petitioner cannot adequately study and properly
analyze the report without the corresponding annexes. Pertinent
and relevant, these could be useful and even necessary to the
preparation by petitioner of its comment, objections and
exceptions to the Conservator’s reports and receiver’s reports.
Regarding copies of the letter and reports of first Conservator, Mr.
Basilio Estanislao, to the Monetary Board and to Central Bank
Governor Fernandez (Item No. 2) these appear relevant as
petitioner has asserted that the above-named Conservator had in
fact wanted to resume normal operations of Banco Filipino but
then he was thereafter replaced by Mr. Gilberto Teodoro. The
letter and reports could be favorable or adverse to the case of
petitioner but whatever the result may be, petitioner should be
allowed to photocopy the same.
Same; Same; Tapes and transcripts of Monetary Board
deliberations while confidential, are not absolutely privileged and
courts may order their production.—As to the tapes and
transcripts of the Monetary Board deliberations on the closure of
Banco Filipino and its meetings on July 27, 1984, and March 22,
1985, (Item No. 1), respondents contend that “it is obvious from
the requirement (Sections 13 and 15 of the Central Bank Act) that
the subject matter (of the deliberations), when resolved . . . shall
be made available to the public but the deliberations themselves
are not open to disclosure but are to be kept in confidence.” This
Court, however, sees it in a different light. The deliberations may
be confidential but not necessarily absolute and privileged. There
is no specific provision in the Central Bank Act, even in Sections
13 and 15 thereof, which prohibits absolutely the courts from
conducting an inquiry on said deliberations when these are
relevant or material to a matter subject of a suit pending before it.
The disclosure is here not intended to obtain information for
personal gain. There is no indication that such disclosure would
cause detriment to the government, to the bank or to third
parties. Significantly, it is the bank itself here that is interested
in obtaining what it considers as information useful and
indispensably needed by it to support its position in the matter
being inquired to by the court below.
Same; The public officer who is being asked to disclose certain
documents relevant to the case has the burden of proof to show that
public interest will be adversely affected thereby.—In the case at
bar, the respondents have not established that public interest
would suf-

525

VOL. 142, JULY 8, 1986 525

Banco Filipino vs. Monetary Board

fer by the disclosure of the papers and documents sought by
petitioner. Considering that petitioner bank was already closed as
of January 25, 1985, any disclosure of the aforementioned letters,
reports, and transcripts at this time pose no danger or peril to our
economy. Neither will it trigger any bank run nor compromise
state secrets. Respondent’s reason for their resistance to the order
of production are tenuous and specious. If the respondents public
officials acted rightfully and prudently in the performance of their
duties, there should be nothing at all that would provoke fear of
disclosure. On the contrary, public interests will be best served by
the disclosure of the documents. Not only the banks and its
employees but also its numerous depositors and creditors are
entitled to be informed as to whether or not there was a valid and
legal justification for the petitioner’s bank closure.

PETITION to review the order of the Regional Trial Court

of Makati, Br. 136.

The facts are stated in the resolution of the Court.

RESOLUTION

Subject of this “Petition to Set Aside Order to Produce

Documents dated 17 February 1986” is the Order of Branch
136, Regional Trial Court, Makati, granting the motion of
the petitioner herein, based on Section 1, Rule 27, of the
Rules of Court, for the production, inspection, and copying
of certain papers and records which are claimed as needed
by the Petitioner Bank for the preparation of its comments,
objections, and exceptions to the Conservator’s report dated
January 8, 1985, and Receiver’s Report dated March 19,
1985. The documents now asked to be produced, inspected,
and copied are the following:

(1) Copies of tapes and transcripts of the Monetary

Board (MB) deliberations on the closure of Banco
Filipino (BF) and its meeting on July 27, 1984, and
March 22, 1985;
(2) Copies of the letter and reports of first conservator,
Mr. Basilio Estanislao, to the MB and to Central
Bank Governor Jose Fernandez;

526

526 SUPREME COURT REPORTS ANNOTATED

Banco Filipino vs. Monetary Board
 (3) Papers showing computations of all the interests
and penalties charged by the CB against BF;
(4) Schedule of recommended valuation of reserves per
Mr. Tiaoqui’s report dated March 19, 1985;
(5) Adjustment per Annex “C” of Mr. Tiaoqui’s report;
(6) Annexes “A”, “B”, and “C” of the joint report of Mr.
Tiaoqui, Mr. Aurellano, and Mrs. Valenzuela;
(7) Schedule of devaluation of CB-premises of Paseo de
Roxas of same report;
(8) Schedule of BF’s realizable assets from P5,159.44 B
to P3,909.23 B as of January 25, 1985;
(9) Documents listed in BF’s letter to Mrs. Carlota
Valenzuela dated October 25, 1985.

In issuing the challenged order, the court below took the

view that the Supreme Court’s resolution referring to it the
matters relative to the bank’s closure does not preclude the
petitioner from availing of this mode of discovery as an
additional means of preparing for the hearing. It
considered the documents sought to be produced as not
privileged because these constitute or contain evidence
material to the issues into by the Court. These materials
are said to comprise of records of the administrative
proceedings conducted by respondent’s officials and
representatives from the inception of and preparation of
the challenged reports and the resolution placing petitioner
under receivership and thereafter under liquidation as it is
the regularity and impartiality of these administrative
proceedings which are being assailed by the petitioner, the
trial court saw no reason why said documents should be
thus concealed from it.
Respondents Monetary Board and Central Bank take
exception to the said order and pray in their petition before
this Court for the reversal and setting aside of the same.
The grounds recited in support of their petition are the
following:

(1) The ratiocination of the trial court is wholly in error

because the proceedings before it do not at all deal
with either the administrative proceedings
conducted by

527

VOL. 142, JULY 8, 1986 527

Banco Filipino vs. Monetary Board
 the respondents or the regularity and impartiality
of the CB actions on BF; it does so simply upon the
charge that no “hearing” was given BF prior to
those actions of closure and liquidation. However,
no such prior hearing had been called as none is
required by the law and by the Supreme Court
decisions in force to this date (Rural Bank of
Lucena, Inc. vs. Arca, 15 SCRA 66, and Rural Bank
of Bato vs. IAC, G.R. 65642, Oct. 15, 1984).
(2) The tapes and transcripts of the Monetary Board
deliberations are confidential pursuant to Sections
13 and 15 of the Central Bank Act.

“Sec. 13. Withdrawal of persons having a personal interest.—

Whenever any member attending a meeting of the Monetary
Board has a material personal interest, directly or indirectly, in
the discussion or resolution of any given matter, said member
shall not participate in the discussion or resolution of the matter
and must retire from the meeting during the deliberation thereon.
The subject matter, when resolved, and the fact that a member
had a personal interest in it, shall be made available to the public.
The minutes of the meeting shall note the withdrawal of the
member concerned. (As amended by PD No. 1827).
 “Sec. 15. Responsibility.—Any member of the Monetary Board
or officer or employee of the Central Bank who wilfully violates
this Act or who is guilty of gross negligence in the performance of
his duties shall be held liable for any loss or injury suffered by the
Bank as a result of such violation or negligence. Similar
responsibility shall apply to the disclosure of any information of a
confidential nature about the discussion or resolutions of the
Monetary Board, except as required in Section 13 of this Act, or
about the operations of the Bank, and to the use of such
information for personal gain or to the detriment of the
Government, the Bank or third parties. (As amended by
Presidential Decree No. 72). (Italics supplied).

(3) The Monetary Board deliberations were necessarily

held subsequent to the submission of the CB
reports. They did not enter into the making of those
reports and can have no materiality to any question
of fact that may be raised in relation to their
contents.

528

528 SUPREME COURT REPORTS ANNOTATED

Banco Filipino vs. Monetary Board
On April 16, 1986, Petitioner Banco Filipino filed its
Comment on Respondent’s petition to set aside the order
for the production of the documents. In said pleading, the
petitioner bank assails the respondent’s petition on the
following grounds:

(1) There is no reason why Banco Filipino should not

be furnished the documents, particularly Nos. 3 to 9
of its motion, when these are merely attachments to
the Supervision and Examination Sector, Dept. II
(SES) Reports, copies of which were given to it
pursuant to a Supreme Court order.
(2) The Supreme Court in its referral of October 8,
1985 to the RTC Makati intended full evidence
taking of the proceeding for judicial review of
administrative action filed with the Supreme Court,
the trial Court being better equipped for evidence
taking.
(3) The respondents cannot claim privilege in refusing
to produce the Central Bank records because it is
based only on the generalized interest in
confidentiality. Petitioner cites as a precedent the
doctrine established in the case of U.S. vs. Nixon,
 418 U.S. 683, 713, which states that “when the
ground for asserting privilege as to subpoenaed
materials sought for use in a criminal case is based
only on the generalized interest in confidentiality, it
cannot prevail over the fundamental demands of
due process of law.”
(4) The requested documents and records of the
Central Bank are material and relevant because BF
is entitled to prove from the CB records (a) that
Governor Fernandez closed BF without a MB
resolution and without examiner’s reports on the
financial position of BF; (b) that a MB resolution
was later made to legalize the BF closure but it had
no supporting examiner’s report; (c) that the earlier
reports did not satisfy respondent Governor
Fernandez and he ordered the examiners and the
conservator, Gilberto Teodoro, to “improve” them;
and (d) that the reports were then fabricated.

529

VOL. 142, JULY 8, 1986 529

Banco Filipino vs. Monetary Board
Petitioner adds that what respondents fear is disclosure of
their proceedings because petitioner has accused the CB
governor of (a) covering 51% of its stockholding, (b)
encashing BF securities in trickles as fuel a run, (c)
appointing a conservator when the President ordered the
MB to grant petitioner a P3 Billion credit line, (d) replacing
Estanislao with Gilberto Teodoro when the former wanted
to resume normal operations of BF, and (e) changing the
conservatorship to receivership when it appointed Carlota
Valenzuela as receiver again without hearing.
On May 13, 1986, Respondent Monetary Board filed
their Reply to Petitioner Bank’s Comment dated April 15,
1986. Respondents argue that:

(1) The case of U.S. vs. Nixon and the other decisions
cited by petitioner are inapplicable because—

a) The authorities cited refer only to a claim of

privilege based only on the generalized interest of
confidentiality or on an executive privilege that is
merely presumptive. On the other hand, the so-
called MB deliberations are privileged
communications pursuant to Section 21, Rule 130 of
the Rules of Court because statements and opinions
 expressed in the deliberation of the members of the
MB are specifically vested with confidentiality
under Secs. 13 and 15 of the Central Bank Act. The
“public interest” requirement for non-disclosure is
evident from the fact that the statute punishes any
disclosure of such deliberations.
b) Petitioner has not in the least shown any relevance
or need to produce the alleged MB deliberations.
What petitioner intends to prove are not “issues”
raised in the pleadings of the main petition.

(2) Petitioner is interested, not in discovering evidence,

but in practicing oppression by the forced
publication of the MB members’ confidential
statements at board meetings.
(3) The so-called deliberations of the Monetary Board
are in truth merely the individual statements and
expressions of opinion of its members. They are not
statements or opinions

530

530 SUPREME COURT REPORTS ANNOTATED

 Banco Filipino vs. Monetary Board

that can be imputed to the board itself or to the

Central Bank. The transcripts of stenographic notes
on the deliberations of the MB are not official
records of the CB; they are taken merely to assist
the Secretary of the MB in the preparation of the
minutes of the meetings. And as advertedly also,
the tape recordings are not available as these are
used over and over again.

The motion for the production of the subject documents was

filed by petitioner pursuant to Section 1, Rule 27, of the
Rules of Court. It has beep held that “a party is ordinarily
entitled to the production of books, documents and papers
which are material and relevant to the establishment of his
cause of action or defense” (General Electric Co. vs.
Superior Court in and for Alameda County, 45 C. 2d 879,
cited in Martin, Rules of Court, 3rd edition, Vol. 2, p. 104).
“The test to be applied by the trial judge in determining the
relevancy of documents and the sufficiency of their
description is one of reasonableness and practicability”
(Line Corp. of the Philippines vs. Moran, 59 Phil. 176, 180).
“On the ground of public policy, the rules providing for
production and inspection of books and papers do not
authorize the production or inspection of privileged matter,
that is, books, papers which because of their confidential
and privileged character could not be received in evidence”
(27) CJS 224). “In passing on a motion for discovery of
documents, the courts should be liberal in determining
whether or not documents are relevant to the subject
matter of action” (Hercules Powder Co. vs. Haas Co., U.S.
Dist. Ct. Oct. 26, 1944, 9 Fed. Rules Service, 659, cited in
Moran, Comments on the Rules of Court, 1979 Ed. Vol. 2,
p. 102). Likewise, “any statute declaring in general terms
that official records are confidential should be liberally
construed, to have an implied exception for disclosure when
needed in a court of justice” (Wigmore on Evidence, Vol.
VIII, p. 801, citing the case of Marbury vs. Madison, 1 Cr.
137, 143).
In the light of the jurisprudence above-cited, this Court
holds that no grave abuse of discretion was committed by
the court below in granting petitioner’s motion for the
production of the documents enumerated herein. We accept
the view taken by the court below that the documents are
not privileged and
531
 VOL. 142, JULY 8, 1986 531
Banco Filipino vs. Monetary Board

that these constitute or contain evidence material to the

issues being inquired into by the Court.
With respect to Items Nos. 3 to 9, these are the annexes
to the Supervision and Examination Sector, Dept. II (SES)
Reports submitted to the Central Bank and Monetary
Board which were taken into consideration by said
respondents in closing petitioner bank. A copy of the SES
Reports was furnished to the petitioner. We, therefore, fail
to see any proper reason why the annexes thereto should be
withheld. Petitioner cannot adequately study and properly
analyze the report without the corresponding annexes.
Pertinent and relevant, these could be useful and even
necessary to the preparation by petitioner of its comment,
objections and exceptions to the Conservator’s reports and
receiver’s reports.
Regarding copies of the letter and reports of first
Conservator, Mr. Basilio Estanislao, to the Monetary Board
and to Central Bank Governor Fernandez (Item No. 2)
these appear relevant as petitioner has asserted that the
above-named Conservator had in fact wanted to resume
normal operations of Banco Filipino but then he was
thereafter replaced by Mr. Gilberto Teodoro. The letter and
reports could be favorable or adverse to the case of
petitioner but whatever the result may be, petitioner
should be allowed to photocopy the same.
As to the tapes and transcripts of the Monetary Board
deliberations on the closure of Banco Filipino and its
meetings on July 27, 1984, and March 22, 1985, (Item No.
1), respondents contend that “it is obvious from the
requirement (Sections 13 and 15 of the Central Bank Act)
that the subject matter (of the deliberations), when
resolved . . . shall be made available to the public but the
deliberations themselves are not open to disclosure but are
to be kept in confidence.” This Court, however, sees it in a
different light. The deliberations may be confidential but
not necessarily absolute and privileged. There is no specific
provision in the Central Bank Act, even in Sections 13 and
15 thereof, which prohibits absolutely the courts from
conducting an inquiry on said deliberations when these are
relevant or material to a matter subject of a suit pending
before it. The disclosure is here not intended to obtain
information for personal gain. There is no indication
532
532 SUPREME COURT REPORTS ANNOTATED
Banco Filipino vs. Monetary Board

that such disclosure would cause detriment to the

government, to the bank or to third parties. Significantly, it
is the bank itself here that is interested in obtaining what
it considers as information useful and indispensably
needed by it to support its position in the matter being
inquired to by the court below.
On the other hand, respondents cite Section 21, Rule
130, Rules of Court which states:

“Section 21. Privileged Communications.—The following persons

cannot testify as to matters learned in confidence in the following
cases:

x x x      x x x      x x x      x x x

(e) A public officer cannot be examined during his term of office or

afterwards, as to communications made to him in official
confidence, when the court finds that the public interest would
suffer by disclosure.”

But this privilege, as this Court notes, is intended not for

the protection of public officers but for the protection of
public interest (Vogel vs. Gruaz, 110 U.S. 311 cited in
Moran, Comments on the Rules of Court, 1980 Ed. Vol. 5,
p. 211). Where there is no public interest that would be
prejudiced, this invoked rule will not be applicable.

“The rule that a public officer cannot be examined as to

communications made to him in official confidence does not apply
when there is nothing to show that the public interest would
suffer by the disclosure question. x x x”, (Agnew vs. Agnew, 52 SD
472, cited in Martin Rules of Court of the Philippines, Third
Edition, Vol. 5, p. 199).

In the case at bar, the respondents have not established

that public interest would suffer by the disclosure of the
papers and documents sought by petitioner. Considering
that petitioner bank was already closed as of January 25,
1985, any disclosure of the aforementioned letters, reports,
and transcripts at this time pose no danger or peril to our
economy. Neither will it trigger any bank run nor
compromise state secrets. Respondent’s reason for their
resistance to the order of production are tenuous and
specious. If the respondents public officials acted

533
 VOL. 142, JULY 8, 1986 533
Banco Filipino vs. Monetary Board

rightfully and prudently in the performance of their duties,

there should be nothing at all that would provoke fear of
disclosure.
On the contrary, public interests will be best served by
the disclosure of the documents. Not only the banks and its
employees but also its numerous depositors and creditors
are entitled to be informed as to whether or not there was a
valid and legal justification for the petitioner’s bank
closure. It will be well to consider that—

“Public interest means more than a mere curiosity; it means

something in which the public, the community at large, has some
pecuniary interest by which their legal rights or liabilities are
affected” (State vs. Crocket, 206, p. 816 cited in Words and
Phrases, Vol. 35, p. 229).

IN VIEW OF ALL THE FOREGOING, the order to produce

documents dated February 17, 1986 issued by the court
below in S.C.-G.R. No. 70054, is hereby affirmed, except as
to the copies of the tapes relative to the Monetary Board
deliberations on the closure of Banco Filipino on January
 25, 1985 and its meetings on July 27, 1984, and March 22,
1985 and only if such tapes are actually no longer available
taking into account respondent Monetary Board’s
manifestations that the tape recording of the deliberations
of that Board are, for purposes of economy, used over and
over again inasmuch as these tapes are not required to be
kept or stored. (See Respondent’s Reply, dated May 12,
1986; Rollo, Vol. IV, pp. 1288-1289).
SO ORDERED.

     Gutierrez, Jr., J., took no part.

Order affirmed.

——o0o———

534

© Copyright 2017 Central Book Supply, Inc. All rights reserved.