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BSP, Banco Filipino trade

criminal charges
Published April 1, 2011 4:55pm

(Updated 5:15 p.m.) The Bangko Sentral ng Pilipinas (BSP) and Banco Filipino
Mortgage and Savings Bank filed criminal charges against each other at the
Department of Justice on Friday in connection with the thrift bank’s closure last
month. The BSP accused Banco Filipino of violating banking laws, while the thrift
bank accused central bank officials of committing graft practices. Last March, the
Monetary Board — BSP’s policy-making body — ordered Banco Filipino’s closure
and placement under the receivership of Philippine Deposit Insurance Corp. The
central bank said the Aguirre-owned bank’s liabilities topped its assets by P8.4
billion. The BSP then ordered that assistance be immediately given to Banco
Filipino’s 177,652 depositors. The Monetary Board also took note that Banco
Filipino’s management and board of directors failed to restore its financial health
and viability after having been given more than ample time to address its
problems. Banco Filipino stockholders are still trying to ask the Court of Appeals
to stop the implementation of the Monetary Board’s closure order. BSP’s
complaints In five separate complaints, the BSP on Friday filed a string of charges
against the Aguirre-owned thrift bank. These include:

 Willful refusal to file audited financial statements for 2002 to 2007;

 Falsification and issuance of false statements to hide the true financial
condition of the bank;
 Willful refusal to report directors, officers, stockholders, and other related
interest or DOSRI loans;
 Willful refusal to comply with numerous BSP laws and directives; and
 Willful refusal to cease the condcut of unsafe, hazardous, and unsound
bank practices.

Speaking to reporters, BSP Office of Special Investigations director Alfonso

Penaco IV alleged that Banco Filipino’s unsound bank practices led to the bank’s
closure. “More than half of the bank’s loan portfolio was allocated to the
directors, officers, stockholders and other related interest of the bank, some of
which the bank deliberately refused to report to the BSP as required by law. Most
of these loans became past due and remains uncollected to this date," said
Penaco. Banco Filipino also files raps On Friday, Banco Filipino also filed a graft
complaint against the seven officials of the Monetary Board. In a 29-page
complaint-affidavit filed with the Department of Justice, Banco Filipino executive
vice presidents Maxy Abad and Francisco Rivera and Banco Filipino stockholders
alleged that officials of the central bank violated Republic Act No. 3019, or the
Anti-Graft and Corrupt Practices Act. “We accuse the respondents of gross and
blatant violation of [RA No. 3019], specifically Section 3 thereof, by denying the
grant of emergency loans requested and needed by Banco Filipino under an
emergency situation and the eventual closure and receivership of the said bank
shortly thereafter," said the complainants. They added that the Bangko Sentral’s
actions were “done with manifest partiality, evident bad faith, and/or gross
inexcusable negligence to the damage and prejudice of Banco Filipino, its
stockholders, and depositors." Named on the charge sheet were BSP Gov.
Amando Tetangco Jr., BSP deputy governors Nestor Espenilla Jr. and Juan de
Zuniga Jr., and Monetary Board members Juanita Amatong, Alfredo Antonio,
Ignacio Bunye, and Peter Favila. The complainants criticized the BSP for its
alleged lack of support to reorganize and rehabilitate the beleaguered bank. They
alleged that the Monetary Board — BSP’s policy-making body — pressured
Banco Filipino into paying its emergency loans. GMA News Online is still trying to
reach Espenilla for his reaction but he could not be contacted as of this
posting. Tiff with BSP On its website, Banco Filipino said it was ordered closed by
the central bank in 1985, as it was supposedly insolvent, despite the bank’s
outstanding performance. As early as 1966, Banco Filipino emerged as the
biggest savings bank in the country with 92 branches prior to its closure. In
1994, the bank opened 15 of its 92 branches and had 62 branches operating
nationwide. In its complaint filed on Friday, Banco Filipino recounted the
supposed troubles it encountered with BSP since its re-opening. “We would like
to emphasize that the precarious financial condition or serious financial
pressures that Banco Filipino experienced since re-opening and until the present
was brought about by the illegal closure of the bank and he lack of regulatory
support for the business, further aggravated by the obstinate refusal of the BSP
to make reparations to Banco Filipino for its wrongful conduct," said the
complainants. They added that BSP rejected the bank’s seven business-plan
proposals instead of extending “immediate and deserved assistance to Banco
Filipino." — JE, GMA News