Appellate court upholds Banco Filipino liquidation

MANILA, Philippines — The Court of Appeals (CA) has upheld the decision of the Bangko Sentral ng Pilipinas (BSP) to place the closed Banco Filipino Savings and Mortgage Bank under the receivership of the state’s liquidator.

In a statement, state-run Philippine Deposit Insurance Corp. (PDIC) said that the appellate court has denied the motion for reconsideration filed by Metropolis Development Corp. (MDC), one of the major shareholders of the closed bank.

The CA ruled that it would no longer reverse a court decision to uphold the action of the BSP Monetary Board (MB) to place the shuttered Banco Filipino under liquidation by statutory receivership.

The CA said that MDC failed to present new issues that could persuade it to modify its resolution. The resolution refers to the court order upholding MB Resolution 1635 issued in 2011 placing Banco Filipino under the PDIC’s liquidation.

In 2020 the CA dismissed the petition lodged by MDC arguing that Banco Filipino was supposed  to expire on 2014, three years after it was put under receivership. The CA rendered the issue as moot and used it to deny MDC’s petition for certiorari.

“MDC had claimed in its denied motion that it can continue existing for up to three years after its dissolution to wind up its affairs and that the MB resolution placing the bank under liquidation within just seven months from its closure diminished their rights as stockholders over the bank’s assets,” the PDIC said.

“The CA, however, did not give credence to MDC’s argument and, instead, bolstered the propriety of the issuance of the MB resolution,” the PDIC added.

The PDIC and Banco Filipino have a long history of financial feud on how to go about liquidating the closed bank’s assets after its closure more than 10 years ago.

In 2019, the PDIC filed a criminal case against former officials of Banco Filipino before the Department of Justice (DOJ) for conducting business in an unsafe or unsound manner.

According to the state-owned firm, the decisions made by former Banco Filipino executives caused losses to the bank totaling P789.46 million.

In 2016 the government liquidator also pursued criminal charges against former Banco Filipino officers for syndicated estafa amounting to P669.6 million.

The syndicated estafa was allegedly committed prior to the closure, but the involved individuals failed to return the amount upon the MB ruling to shutter Banco Filipino.