Pinoy Business Coach

 “What is clear is that the hard-earned cash of hundreds or even thousands of depositors of Banco Filipino are now trapped with the inability of the bank to dispense cash,” Recto noted.

Still, the senator asked the Bangko Sentral ng Pilipinas (BSP) and the Philippine Deposit Insurance Corp. to see to it that depositors are protected should the bank finally close down and make sure this would not be repeated in other similarly situated banks.

Recto recommended that the BSP rescue the beleaguered Banco Filipino “not to save its owners and board of directors but the hapless depositors who are now jittery over the fate of their money deposits.”

“We want to know from the BSP and its Monetary Board why the thrift bank has not been given its much-needed court-sanctioned attention so that the depositors are protected,” the senator said.

In a statement, Recto clarified he was not shielding the Aguirre family, which controls Banco Filipino, and was simply voicing concern over the impact of the branch closures to its bank clients and to the banking sector in general.

Recto recalled that the BSP, under the rebuilding plan approved by the  Regional Trial Court in Makati following the 1994 Supreme Court order reopening the bank, should have infused P25 billion in financial assistance to the thrift bank.

Banco Filipino, however, bewailed the BSP’s alleged inaction on their emergency-loan requests.

“The BSP, regardless of the real story behind Banco Filipino’s money woes, should calm the banking sector by ensuring the depositors that their money is safe and intact,” Recto said.

He added that “the tsunami of withdrawals must be stopped before the contagion spreads out to other small troubled banks and trigger an 8.9-magnitude quake in the banking sector.”

Recto noted that a few more banks are also facing the same money woes and are awaiting their “rescue” by the BSP.

He explained that the heavy withdrawals in the past few days were apparently the result of a malicious campaign against the bank, describing it as “problematic and mismanaged. “

“If these are really true, the BSP has within its powers to discipline the bank and make it answerable to their clients,” the Senator said.

“I read in the papers that the BSP has asked the bank to explain their closures. The other relevant question, I think, is that why has the BSP not granted the bank its request for emergency-loan assistance?” Recto said, insisting that the BSP must be very clear on its stance on Banco Filipino: “Would it be up for receivership or direct takeover to stave off a looming bank run?”

It was earlier reported that Banco Filipino was forced to close down some of its branches on Tuesday after being hit by heavy withdrawals amid rumors that it was in deep financial trouble.

Banco Filipino was shut down by the old central bank during the Marcos regime in the 1980s but was reopened in 1994 after the Supreme Court ruled that its closure was arbitrary. The bank currently has about P17 billion worth of deposits in more than 60 branches across the country. Bank officials claimed that the bank has net capital assets of P25 billion. 

*It is in your best interest to understand that a bank's insurance coverage of 500T is on a per depositor basis only.  If you intend to place more than 500T in a certain bank then it would be smart to do it under different names. (e.g. your wife).