MANILA – The Court of Appeals has directed the Bangko Sentral ng Pilipinas to reopen Banco Filipino and ordered the implementation of the P25-billion financial assistance as contained in the business plan previously approved by the BSP and the Monetary Board.

In a 50-page ruling, the CA ordered the BSP and the Monetary Board to reopen BF and allow it to resume business in the Philippines under the comptrollership of the BSP and the MB, complete with a viable rehabilitation plan, in order to ensure fast and immediate recovery of the bank from the ill-defects of the illegal closure.

The CA gave the BSP 30 days to extend financial support to Banco Filipino based on the indicated business plan approved by the BSP and MB.

In its Nov. 18, 2010 order, the Makati City Regional Trial Court granted BF’s application for a writ of preliminary mandatory and preventive injunction and directed the BSP and MB to immediately implement the bank's business plan by releasing its P25-billion financial-assistance package and other regulatory relief without delay.

However, the CA said that the injunction was issued with grave abuse of discretion considering that it was issued in violation of law and public policy.

It noted that the impropriety of issuing a temporary restraining order against BSP and the MB in the exercise of regulatory procedure had been settled by the Supreme Court in BSP v. Antonio-Valenzuela, where it said that the issuance by the RTC of writs of preliminary injunction was an unwarranted interference with the powers of MB.

On the other hand, in its recent decision, the CA reversed its last year's ruling and told the BSP to consider the current landscape since the business plan was drafted in 2009 for necessary "augmentations and adjustments."

The CA also directed that a special liquidity facility fund must be put in place.

It said that while there was a P25-billion previously approved by the BSP and MB, supervening events must be taken into consideration.

The CA cited as an example when the bank was about to close, it had around P16-billion deposit accounts which were reduced as the Philippine Deposit Insurance Corp. started paying depositors and creditors.

"As soon as the reopening is published and announced, the depositors would flock and congregate in order to make the withdrawals. Thus, there is a need to address this matter before the reopening," the CA said.

Concurring with the CA ruling were Associate Justices Vicente Veloso and Normandie Pizarro.*PNA

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