PDIC takes over Express Savings Bank


Posted at Jul 08 2011 04:23 PM | Updated as of Jul 11 2011 07:38 PM

Pichay-led LWUA invested P780-M in Express Savings

MANILA, Philippines - A thrift bank based in Laguna that was acquired by the Local Water Utilities Administration (LWUA) under its chairman, former Surigao Congressman Prospero Pichay, without permission from monetary officials has been placed under receivership of the Philippine Deposit Insurance Corp. (PDIC).

In a statement, PDIC said it took over Express Savings Bank Inc. (ESBI) after the Monetary Board placed it under receivership for its financial woes.

PDIC said that as of March 31, Express Savings had estimated total deposit liabilities of P608.36 million, consisting of 2,673 accounts.

Express Savings has three branches in Laguna -- Santa Rosa, Biñan, and San Pedro. Its head office is located on J.P. Rizal Avenue, Cabuyao.

LWUA acquisition

In 2009, LWUA, led by Pichay, invested P780 million agency funds to acquire Express Savings without clearance from the Monetary Board of the Bangko Sentral ng Pilipinas and the Department of Finance.

Pichay and two other LWUA officials, acting administrator Daniel Landingin and acting deputy administrator Wilfredo Feleo, only obtained approval from the office of former President Gloria Arroyo.

Last Monday (July 4), the Ombudsman ordered Pichay, Landingin, and Feleo dismissed from service for the purchase of Express Savings.

Acting Ombudsman Orlando Casimiro found all three liable for grave misconduct.

The order was immediately executory.

In an interview with ANC last Monday, Pichay said he will question the decision before the Court of Appeals. A petition is also currently lodged there questioning their earlier suspension for the same case.

Arroyo appointed Pichay to the LWUA in 2008 after he lost in the senatorial elections under administration ticket.

Pichay was a leader of Arroyo's Kabalikat ng Malayang Pilipino (KAMPI) party.

Insured accounts

PDIC said on Friday that upon takeover, all records of the bank would be "gathered, verified and validated."

A forum will also be conducted on July 12 to explain to depositors the process of filing insurance claims.

PDIC said "holders of deposit accounts with balances of P10,000 and below who have no outstanding loans and whose addresses are current in the bank records are not required to file deposit insurance claims."

The PDIC said "this group of depositors comprises 56.7% of the bank’s total deposit accounts amounting to P4.57 million."