The Philippine Deposit Insurance Corporation (PDIC) continues with its pursuit to bring to justice perpetrators of unsafe and unsound banking schemes. It recently filed before the Department of Justice (DOJ) a criminal complaint against eight officials of the closed Banco Filipino Savings and Mortgage Bank (BF) for conducting business in an unsafe and unsound manner in violation of the PDIC Charter.

Charged were BF Board of Directors and Executive Committee members Teodoro O. Arcenas, Jr., Albert C. Aguirre, Maxy S. Abad, Catherine C. Aguirre-Hernandez, Delfin M. Dimagiba, Ramon E. Montano, Orlando O. Samson and Francisco A. Rivera.

PDIC alleged in its complaint that the respondents unduly favored eleven (11) “related entities” when they approved loans aggregating P3.08 billion in violation of the General Banking Law and the Bank’s policy manual, and despite adverse findings by bank personnel evaluating the loan applications. This resulted in loss or damage to BF. They are Related Entities because the respondents are also directors/officers of the borrowing companies or the companies that allowed their properties to be used as collaterals for the loans.

In addition, the complaint stated that, as of bank closure, respondents willfully failed to collect P2.99 billion of these loans although they have been past due for periods ranging from four to seven years. The complaint alleged that even as BF was suffering from huge operational losses, the respondents did not exert any effort to collect the said loans.

The complaint also stated that for the years 2008 to 2011, BF spent P515.5 million in legal fees, yet none of it was spent to collect the past due loans of the eleven (11) Related Entities. It also added that BF advanced a total of P37.556 million as real estate taxes for the collaterals of these loans.

PDIC had requested the DoJ to conduct a preliminary investigation against the respondents and the filing of criminal charges of conducting business in an unsafe and unsound manner.

The Philippine Deposit Insurance Corporation (PDIC) was established on June 22, 1963 by Republic Act 3591 to provide depositor protection and help maintain stability in the financial system by providing permanent and continuing deposit insurance. Effective June 1, 2009, the maximum deposit insurance coverage is P500,000 per depositor. All deposit accounts by a depositor in a closed bank maintained in the same right and capacity shall be added together. A joint account shall be insured separately from any individually-owned deposit account.

PDIC news/press releases and other information are available at the website, www.pdic.gov.ph.