MANILA, Philippines - The Regional Trial Court (RTC) in Makati City has issued a temporary restraining order (TRO) enjoining the Bangko Sentral ng Pilipinas (BSP) and the Monetary Board (MB) from implementing other regulatory measures designed to coerce the Banco Filipino Savings and Mortgage Bank into dropping all its suits and damage claims against them in exchange for the approval of its billion Business Plan.
Makati RTC Judge Joselito Villarosa also directed both the BSP and the MB to immediately execute Banco Filipino’s approved Business Plan by releasing, without delay, the financial assistance and a package of regulatory relief.
“After a painstaking and assiduous perusal of the arguments raised by both parties, the Court finds that plaintiff has by preponderance of evidence established its right to the issuance of a writ of preliminary mandatory and preventive injunction, the same is hereby granted,” the trial court ruled.
It added that the grant of financial assistance to Banco Filipino is “a necessary consequence of continuing in business with safety to its creditors, depositors and the general public.”
It noted that the Supreme Court has ruled with finality in 1992 that Banco Filipino’s closure was illegal and that it has the right to continue in business.
However, Banco Filipino noted that the BSP and the MB continue to abide by the SC’s ruling, prompting it to file a petition for a temporary restraining order and/or a writ of preliminary injunction against the two government financial institutions.
In particular, the acts sought to be enjoined by Banco Filipino were the delay and refusal of the respondents to implement its approved business plan and release its P25-billion financial assistance; the regulatory measures and abuses calculated to coerce petitioner into agreeing to drop and/or withdraw its suits and damage claims against respondents and to waive future claims against respondents or their officers, employees, representatives, and all persons acting in their behalf; and acts prejudicial to its operations.
In granting the TRO, the RTC stressed that the regulatory oppression by the BSP on Banco Filipino became apparent when after seven years of summarily rejecting the seven proposed business plan of the latter, the BSP offered as an alternative to its proposed eigth business plan long-term financial assistance and package of regulatory reliefs, on the condition that it drop all its damage claims against the BSP amounting to P18.8 billion.
“The imposition of the condition for petitioner to withdraw its claim against herein respondents and its officers shall affect the stability of the former, particularly its financial aspect. Considering further, the material and unilateral changes that was done by Supervision and Examination Sector to the approved Business Plan, the threat of closure of petitioner in the court’s opinion, is plausible,” the trial court held.
“Accordingly, in order to maintain the status quo and prevent irreparable injury to applicant and so as not to render nugatory the proceedings before this court, respondent Bangko Sentral ng Pilipinas and the Monetary Board…are hereby enjoined from employing acts inimical to the enforcement and implementation of the approval Business Plan; continuing and committing acts prejudicial to petitioner’s operations; withdrawing or threatening to withdraw the approval of the business plan containing financial assistance, and package of regulatory reliefs; and otherwise enforcing other regulatory measures and abuses calculated to coerce Banco Filipino Savings and Mortgage Bank into agreeing to drop and/or withdrawing its suits and damage claims against BSP and MB, and to waive future claims against respondents or their official and employees,” the trial court ordered.
In 1991, the SC declared the closure “arbitrary and with grave abuse of discretion.” The decision became final and executory on Feb. 4, 1992.