MANILA, MARCH 19, 2011 (STAR) By Lawrence Agcaoili - The Philippine Deposit Insurance Corp. (PDIC) yesterday revealed that about 60 percent of the total deposits in the closed Banco Filipino Savings and Mortgage Bank are covered by the mandatory insurance of P500,000 per depositor.
PDIC executive vice president Cristina Orbeta said in a press conference that the government-owned insurer would pay P9.4 billion worth of deposit claims of Banco Filipino out of its Deposit Insurance Fund (DIF) amounting to P64.6 billion.
The Bangko Sentral ng Pilipinas (BSP) said the deposit base of Banco Filipino dropped to P15 billion as of March 15 from about P17 billion as of end-December. This means that the PDIC would pay P9.4 billion or 62 percent of the total deposits.
Orbeta told reporters that PDIC personnel have been deployed to the 62 banking units of Banco Filipino nationwide to gather and preserve the bank's records and assets, preparatory to examination so that the claims servicing process may start.
"We shall give updates as soon as the examination of bank records is complete. The entire organization has been mobilized to fast-track payment of deposit insurance," she explained.
PDIC gave assurance that about 97 percent of the total deposit accounts of the closed bank are fully insured by the maximum coverage of P500,000. Banco Filipino has 177,652 deposit accounts.
The PDIC official said the agency would fast-track the payment of deposits with balances of P5,000 and below that make up 53 percent of total accounts.
"We target to start payment for depositors with accounts of P5,000 and below with no outstanding loans and whose addresses are current in the bank records a week after takeover. These depositors need not file claims. We shall mail payment directly to them via registered mail," she added.
Orbeta said PDIC would send postal money orders (PMO) that could be encashed at any of the over 1,400 post offices and over 300 branches of Land Bank of the Philippines nationwide.
On the other hand, depositors with balances of P5,000 and below who have outstanding loans or whose addresses are not updated as well as depositors with balances above P5,000 need to file claims.
The PDIC would hold Depositors Forums starting next week to explain procedures and requirements on filing claims and answer depositors' queries.
"Again, we assure depositors that PDIC will pay deposit insurance for all valid accounts," Orbeta said.
She also reminded borrowers of Banco Filipino to settle their outstanding loans to authorized PDIC deputies or designated PDIC accounts with the Philippine National Bank (PNB).
Banco Filipino has been seeking P25-billion worth of financial assistance and regulatory relief as well as P19 billion in compensation from the BSP for the bank's alleged illegal closure in 1985.
A Makati court issued an order on Nov. 18, 2009 directing the BSP and the Monetary Board to immediately implement Banco Filipino's approved business plan.
Likewise, the Supreme Court also affirmed a decision by the Court of Appeals (CA) ordering a court to proceed with the P18.8-billion damage suits filed by Banco Filipino against the Central Bank Board of Liquidators in connection with the bank's closure in 1985.
Tomas Aguirre founded in 1964 the bank with a popular slogan "Subok na Matibay, Subok na Matatag." It has 32 branches in Metro Manila and nearby areas as well as 30 branches in the provinces.
In its website, Banco Filipino claimed that it was ordered closed by the central bank in 1985 due to alleged insolvency despite the bank's outstanding performance.
In 1966, Banco Filipino emerged as the biggest savings bank in the country with 92 branches prior to its closure.
In 1994, the bank opened 15 of its 92 branches. It now has 62 branches nationwide.
Banco Filipino vice chairman and former Securities and Exchange Commission chairman Perfecto Yasay Jr. said he would file the necessary case against the BSP.
Depositors swarm BF branches
Angry depositors assembled at the closed Banco Filipino Savings and Mortgage Bank branches in San Fernando, La Union and other areas in the region yesterday as they demanded to withdraw their money after the BSP ordered the bank's closure last Thursday.
Depositors from various parts of La Union trooped to the closed bank's branch along Quezon Ave. and other bank branches in the Ilocos region to withdraw their money.
Several branches of Banco Filipino in Metro Manila and other parts of Luzon did not open their offices starting last Tuesday.
The BSP ordered last Thursday the closure of Banco Filipino for insolvency after its liabilities overwhelmed its assets by P8.4 billion, prompting monetary authorities to prepare charges against the board of directors and officials of the bank.
BSP Deputy Governor Nestor Espenilla Jr. said the central bank's seven-member Monetary Board decided yesterday to place Banco Filipino under the receivership of the PDIC.
Espenilla pointed out that Banco Filipino has insufficient realizable assets to meet its obligations, with its net realizable value at -P8.4 billion.
The BSP extended P3.5-billion worth of emergency loans to Banco Filipino in 2002, of which P2.6 billion remains outstanding.
Herminio Estrada, 89, a farmer from Balaoan, La Union, went to the bank's branch in San Fernando to withdraw money but was surprised to find that the bank was closed.
"I came to withdraw money to spend for my check-up at the hospital but was surprised to find that it is closed," said Estrada, who has P50,000 in his account.
Two employees at another commercial bank, who spoke on the condition of anonymity, also came to join the crowd to express regret for putting money in Banco Filipino.
Realtor Violeta Boado, who opened an account to save her sales commissions, said that she was a long-time client of the bank and expressed her dismay when all the bank employees refused to face the depositors to explain what happened.
"We will know if there are developments, we are always returning here everyday, we will monitor what is happening, if we get back our money or not," Boado said.
Josie Duclayan, a market vendor, complained that all of her cash deposit in the bank was hard-earned money.
"We are calling on Banco Filipino to return our money, we can no longer eat our meals, it is our only hope to live," she said.
Senator urges BF to pay depositors
Sen. Francis Escudero called on the owners of Banco Filipino to stop looking for people to blame and instead find ways to pay the depositors.
In a statement, Escudero said that the owners of the bank should start working with the PDIC to address the claims of its depositors who were without access to their hard-earned money when the bank was closed.
"While at the onset the PDIC has the ball now insofar as fulfilling its mandate to protect depositors, a sort of test-case for its charter, Banco Filipino should be made accountable to its depositors and has a lot of explaining to do," Escudero said.
He said that the bank was liable for the bank run that led to the closure of several of its branches last Tuesday because it did not forewarn its depositors of its problems.
The bank blamed the BSP for coming out with "inaccurate and malicious imputations" which led to "extraordinary panic caused by a well-orchestrated smear campaign."
Escudero also urged the BSP to strengthen the credibility and integrity of banks through the application of proper safeguards as mandated by law in order to prevent similar cases from happening in the future.
"This should not set a precedent for other banks to do the same, letting BSP or PDIC settle problems with depositors all because banks mismanage their affairs. Our institutions should always see to it that banks as a whole must be liable," Escudero said.
Sen. Ralph Recto said that the BSP should undertake efforts to erase the fears of depositors about the stability of the banking sector brought about by the closure of Banco Filipino.
He said that the BSP should immediately address the cases of other banks which are also facing the same money woes as Banco Filipino and are awaiting rescue. With Marvin Sy, Jun Elias
FROM ABS-CBN NEWS EARLIER
Banco Filipino closes amid panic, heavy withdrawals abs-cbnNEWS.com Posted at 03/15/2011 2:51 PM | Updated as of 03/15/2011 8:48 PM
MANILA, Philippines (3rd UPDATE) - Some branches of Banco Filipino were closed on Tuesday fueling speculations that it went on a bank holiday.
Banco Filipino vice chairman Perfecto Yasay denied, however, that the thrift bank is on a bank holiday but stressed that some of its employees did not report to work on Tuesday amid fears of depositors' ire.
The thrift bank had difficulty servicing withdrawals and couldn't clear checks since Friday, March 11.
In a statement, Banco Filipino admitted that there had been "extraordinary financial panic" and "heavy withdrawals" and blamed the Bangko Sentral ng Pilipinas (BSP) for not acting on their request for a P25 billion financial assistance.
BSP also said in a statement that it has asked management to explain the bank's condition to it and its clients.
The Aguirre-led bank was closed by the Central Bank in 1985, citing insolvency. In 1981, the Supreme Court ruled that the closure was illegal.
Since Banco Filipino re-opened in 1994, it has been requesting for series of financial assistance from the regulator citing it has been in distress.
'Extraordinary financial panic'
At the Butuan and Zamboanga branches of the bank, a notice, signed by Banco Filipino Executive Vice President Maxy Abad, said that the bank is "suffering from extraordinary financial panic" which they attributed to "a well-orchestrated smear campaign," by the BSP.
"The bank is exhausting all efforts to protect its depositors by asking the BSP to stave off the heavy withdrawals by denying the derogatory news articles attributed to them and by providing emergency loan assistance after submitting sufficient collateral," the statement read.
"Despite the urgency of all these requests, we have not recieved any official word from the BSP/MB [Monetary Board] on the action they have taken, if any. Furthermore, we have also reiterated the immediate implementation of the approved business plan as ordered by the Makati-RTC. Moreover, the court order prohibits the BSP/MB, its officials, agents and any persons acting for and in their behalf from committing any act prejudicial to the operation of the bank," it said.
"Kindly inform and clarify this matter to our depositors and assure them that as soon as we receive official notice of any favorable action taken by the BSP/MB we shall advise them accordingly," the statement ended.
Surprised depositors
Depositors in branches in Kamias, Timog, and Muñoz in Quezon City were surprised to find out the bank is closed Tuesday.
Medilina Balogomolon, a depositor, rushed to the bank's Kamias branch to check if the bank was really closed. She tried to withdraw money from the bank's ATM but was only able to get P400 before the machine showed the message "Terminal is unavailable."
Ricardo Galang, who owns a beer house beside the BF Kamias branch and is also a depositor, said the bank was still open Monday.
They saw the tellers counting money in the afternoon but nobody advised them that the bank will be closed today.
Vendors beside the BF Muñoz branch like Marilyn Flores are worried that they will be unable to get their money.
Depositors in provinces worried
Banco Filipino branches in the provinces were also closed Monday.
In Cagayan de Oro, the ABS-CBN News team was only able to talk to a lone guard at the bank. He said he was only directed to tell customers that the bank will be closed for the day.
In Naga City, several worried depositors rushed to the bank, only to be greeted by a security guard who told them that management suspended transactions for the day due to a meeting of bank officials in Manila.
The branch in Iloilo City was also closed, and the bank's ATM machine was also unavailable, customers said.
Branches in Dagupan and Isabela were also closed.
Troubles
Once one of the biggest thrift banks in the country, the central bank closed it in 1985, saying it was insolvent.
In 1991 the Supreme Court said the closure was illegal, paving the way for the bank to re-open in 1994.
It has 62 branches nationwide.
It has also failed to submit regular reports to the Philippine Stock Exchange, leading last week to the delisting of its thinly traded stock.
Reports from ANC Business; Zen Hernandez, ABS-CBN News; Joyce Clavecillas, ABS-CBN Iloilo; Rizza Mozstar, ABS-CBN Naga; Richmond Hinayon, ABS-CBN Butuan; Nevi Calma, ABS-CBN Dagupan; RJ Rosalado, ABS-CBN Zamboanga; and Lala Rimando, abs-cbnnews.com
Chief News Editor: Sol Jose Vanzi
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