MANILA, Philippines - The Philippine Deposit Insurance Corp. (PDIC) has filed with the Department of Justice (DOJ) a criminal case against a president of a closed bank for intentionally filing a false bank report to the PDIC in violation of the PDIC Charter, and for perjury in violation of the Revised Penal Code.
Suzette Liwag Banzon, former president and manager of the closed Filhomes Savings and Loan Bank Inc. (FSLBI), was accused of knowingly and intentionally signing and submitting five falsified regular certified statements (RCS) to PDIC relative to the deposit balances of FSLBI for the years 2002 to 2004.
These bank reports understated the bank’s aggregate deposits by P284.5 million resulting in lower assessment payments and risks to the PDIC Deposit Insurance Fund (DIF). The DIF is the funding source for deposit insurance payouts in case of bank closures.
The bank reports showed a discrepancy between the subsidiary ledgers (SL) and general ledger (GL) for the bank’s deposit liabilities.
The GL for deposits was found to have been understated since 2002 and was corrected only in November and December 2004, barely a few months prior to the closure of the bank in January 2005.
The SL represents the transactions of each individual deposit while the GL contains the aggregate amount of deposits. By understating the GL, the bank in effect, paid a lower amount for its deposit insurance assessment, hence, incurred an assessment deficiency.
The sworn affidavits of FSLBI’s former employees indicate that Banzon gave direct instructions to manipulate the bank’s records by deducting the interest expenses on deposits to address the bank’s continuing losses due to interest expenses on deposits.
The former employees added that the SL and GL for deposits are reconciled on instruction of Banzon whenever the Bangko Sentral ng Pilipinas (BSP) is about to examine the books of the bank.
All member banks are required to submit the RCS, or a summary of all the member-bank’s deposit liabilities and the amount of assessment to be paid by the bank to PDIC to insure its deposits.
The bank president or the bank’s authorized signatory attests to the veracity of the information contained in the RCS. The RCS is subject to an assessment audit of the PDIC.
The BSP placed FLSBI under PDIC receivership in 2005. So far, PDIC paid almost P407 million in deposit insurance claims, or 90.1 percent of the total estimated insured deposits amounting to P447.7 million.