DOJ forms panel to probe Banco Filipino row


Posted at Apr 14 2011 01:47 AM | Updated as of Apr 15 2011 01:03 PM

MANILA, Philippines – The Department of Justice (DOJ) has formed a 3-man panel to investigate the charges and counter-charges involving the Bangko Sentral ng Pilipinas (BSP) and Banco Filipino Savings and Mortgage Bank in connection to the latter's closure last month.
Justice Secretary Leila de Lima issued Department Order No. 282, wherein she named Senior State Prosecutor Rosanne Balauag, as chair of the panel with Assistant State Prosecutors Bernardo Parico and Agapito Fajardo Jr., as members.
De Lima also directed the consolidation of the charges and counter-charges filed by BSP and its Monetary Board and Banco Filipino last April 1.
Banco Filipino, through its officers and stockholders, accused BSP and Monetary Board officials of violating Section 3 (e) of RA 3019 (Anti-Graft and Corrupt Practices Act).
Lawyer Harry Roque Jr., who represents the bank, claimed that BSP violated the anti-graft law when it denied the grant of emergency loans needed by the bank under an emergency situation and when it eventually ordered the closure and receivership two weeks ago.
He added that the order of closure issued against the bank was made with “manifest partiality, evident bad faith and gross inexcusable negligence to the damage and prejudice of Banco Filipino, its stockholders and depositors."
Named respondents in the case were BSP governor Amado Tetangco Jr., deputy governor Nestor Espenilla Jr., deputy governor and general counsel Juan de Zuniga Jr., and MB members Juanita Amatong, Alfredo Antonio, Ignacio Bunye and Peter Favila.
In its counter-complaint, the BSP sought the criminal prosecution of the bank's directors for alleged “willful refusal” to file audited financial statements from 2002 to 2007.
It also accused Banco Filipino president Teodoto Arcenas Jr., and director Perfecto Yasay Jr. of falsification and issuance of false statements to hide true financial condition of the bank, willful refusal to report loans, 26 counts of violation of BSP laws and directives and willful refusal to cease conduct of unsafe, hazardous and unsound bank practices.

Banco Filipino has filed a petition before the Court of Appeals (CA) seeking the nullification of MB Resolution No. 372-A. issued on March 17 that placed the bank under receivership and barred it from continuing its business operations in the country.
The appellate court subsequently directed BSP and MB to submit their comments on Banco Filipino's petition.
The bank argued the BSP and MB committed grave abuse of discretion in issuing the assailed memorandum order considering that since it re-opened in 1994, the bank has been operating under the "enhanced monitoring system" of the BSP.
As such, the petitioners said, all transactions of the bank are "passed upon" by the BSP comptroller who reports directly to the Monetary Board.
They added that the bank's closure is “illegal,” considering that it is not insolvent.
The bank, according to the petitioners, does not have a negative net asset value and that its total assets exceed its liabilities by around P25 billion.