SC junks Banco Filipino plea for P25-B assistance
The Supreme Court has rejected Banco Filipino’s bid to secure P25 billion in financial assistance from the Bangko Sentral ng Pilipinas (BSP), ruling that the now-shuttered thrift bank “lacked the capacity to sue.”
In a 24-page decision penned by Associate Justice Marvic Leonen, the high court dismissed Banco Filipino’s petition to enforce a 2010 Makati Regional Trial Court (RTC) ruling ordering the release of the funds.
The Supreme Court upheld a 2011 Court of Appeals (CA) decision that set aside the RTC order, saying that as a closed bank, Banco Filipino could only sue or be sued via its receiver, the Philippine Deposit Insurance Corp. (PDIC).
The high court also said that the BSP’s policymaking Monetary Board, in denying the thrift bank’s plea for assistance, had acted in a quasi-judicial capacity.
“Its decisions, resolutions and orders are the decisions, resolutions and orders of a quasi-judicial agency. Any action filed against the Monetary Board is an action against a quasi-judicial agency,” the court ruled.
“The petition is dismissed on the ground petitioner’s lack of capacity to sue.”
Banco Filipino was declared insolvent and ordered closed by the then Central Bank of the Philippines in 1985 but the SC voided this in 1991. The bank subsequently reopened in 1994 but was again shut by the BSP in 2011.
Banco Filipino claimed nearly P19 billion in damages due to the initial closure order and said that the BSP had refused to provide emergency funding after it reopened because it had refused to drop the claim. It won a reprieve from the Makati RTC but monetary authorities elevated the matter to the appellate court.
The CA, in siding with the BSP, ruled that the RTC had no jurisdiction as Banco Filipino had filed the case on Oct. 20, 2010, after the SC ordered that petitions for writs of certiorari, prohibition or mandamus against the acts and omissions of quasi-judicial agencies should be filed with the appellate court for procedural uniformity.
It was noted that under Republic Act 7653, when the Monetary Board finds a bank insolvent, it may “summarily and without need for prior hearing forbid the institution from doing business in the country and designate the PDIC as receiver of the banking institution.”
The SC did not bite Banco Filipino’s claim it was not a closed bank at the time it filed the petition for review on April 10, 2012.
“When banks become insolvent, depositors are secure in the knowledge that they can still recoup some part of their savings through Philippine Deposit Insurance Corporation. Thus, Philippine Deposit Insurance Corporation’s participation in all suits involving the insolvent bank is necessary and imbued with the public interest,” the SC said.
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