P2.1-B unpaid loans to owners led to Banco Filipino's closure
Published Dec 17, 2019 12:00 am
By Ben Rosario
Unpaid loans reaching over P2.1 billion that were granted to the owners of the Banco Filipino by the bank have contributed to the demise of the once leading financial institution in the country.
Members of the House of Representative made this disclosure as they filed House Resolution No. 610 seeking a congressional inquiry in aid of legislation into the alleged “dubious and suspicious unpaid loans extended to the family of Alberto “Bobby” Aguirre, his heirs, relatives and directors and other officers of the bank.
The same group of House members also filed House Resolution No. 609, this time urging the Lower House to investigate the “fraudulent disbursements allegedly committed by Banco Filipino officers and directors prior to its closure in 2011.”
Reps. Enrico Pineda (1Pacman Partylist); Francisco Datol (Senior Citiens) Virgilio Lacson (Manila Teachers); Ron Salo (Kabayan) and Jorge Antonio Bustos (PATROL) said fraudulent disbursements made by officers of the bank reached P789.4 million.
“It was also discovered that Banco Filipino also paid the partner of a law firm who was one of its directors and unconsionable and astounding amount equivalent to P225.8 million despite its financial troubles,” the solons said.
Banco Filipinos was ordered closed by the Monetary Board of the Bangko Sentral ng Pilipinas on March 17, 2011 and placed it under receivership due to alleged “dubious, unsafe and unsound banking practices”, among other alleged violations’.
The solons declared that the Banco Filipino story is a “landmark case and “one of a kind.”
The unique facts surrounding the case is not and should not be duplicated in any banking case in the Philippines, they warned.
The lawmakers recalled that the bank has been given a second chance to resume operations after being closed in 1985 on orders of the MB.
“Whereas, despite being given a second chance to resume its operations on July 1, 1994, Banco Filipino continued to engage in dubious, unsafe and unsound banking practices and extended onerous loans to the bank owners, directors and related interests,” they said.
As a result of the “hefty unpaid loans” or “unpaid DOSRI (directors, officers, stockholders and related interests), the bank suffered financial troubles.
“Among others, Banco Filipino approved an excessive number of weak self-serving loans to its directors, officers, stockholders and related interests (DOSRI loans) equivalent to P2.192 billion or 53.5 percent of its total loans,” the solons disclosed.
They stressed that a congressional investigation has become imperative on account of the unpaid loans proceeding from DOSRI accounts. This move will help legislators craft new legislative measures that would protect Filipino depositors and punish individuals hiding behind the “cloak of corporate identity” but have committed violations of the law.
Members of the House of Representative made this disclosure as they filed House Resolution No. 610 seeking a congressional inquiry in aid of legislation into the alleged “dubious and suspicious unpaid loans extended to the family of Alberto “Bobby” Aguirre, his heirs, relatives and directors and other officers of the bank.
The same group of House members also filed House Resolution No. 609, this time urging the Lower House to investigate the “fraudulent disbursements allegedly committed by Banco Filipino officers and directors prior to its closure in 2011.”
Reps. Enrico Pineda (1Pacman Partylist); Francisco Datol (Senior Citiens) Virgilio Lacson (Manila Teachers); Ron Salo (Kabayan) and Jorge Antonio Bustos (PATROL) said fraudulent disbursements made by officers of the bank reached P789.4 million.
“It was also discovered that Banco Filipino also paid the partner of a law firm who was one of its directors and unconsionable and astounding amount equivalent to P225.8 million despite its financial troubles,” the solons said.
Banco Filipinos was ordered closed by the Monetary Board of the Bangko Sentral ng Pilipinas on March 17, 2011 and placed it under receivership due to alleged “dubious, unsafe and unsound banking practices”, among other alleged violations’.
The solons declared that the Banco Filipino story is a “landmark case and “one of a kind.”
The unique facts surrounding the case is not and should not be duplicated in any banking case in the Philippines, they warned.
The lawmakers recalled that the bank has been given a second chance to resume operations after being closed in 1985 on orders of the MB.
“Whereas, despite being given a second chance to resume its operations on July 1, 1994, Banco Filipino continued to engage in dubious, unsafe and unsound banking practices and extended onerous loans to the bank owners, directors and related interests,” they said.
As a result of the “hefty unpaid loans” or “unpaid DOSRI (directors, officers, stockholders and related interests), the bank suffered financial troubles.
“Among others, Banco Filipino approved an excessive number of weak self-serving loans to its directors, officers, stockholders and related interests (DOSRI loans) equivalent to P2.192 billion or 53.5 percent of its total loans,” the solons disclosed.
They stressed that a congressional investigation has become imperative on account of the unpaid loans proceeding from DOSRI accounts. This move will help legislators craft new legislative measures that would protect Filipino depositors and punish individuals hiding behind the “cloak of corporate identity” but have committed violations of the law.