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Filipinos ask: Where did our money go?
Four lawmakers on Black Saturday revealed that the banks have been ordered closed by the Monetary Board (MB) during the past 16 years.
Through Resolution 869, the lawmakers are asking the Committee on Banks and Financial Intermediaries to conduct an inquiry, in aid of legislation, on the plight of depositors of closed banks.
The resolution also aims to guide the formulation and crafting of necessary reform legislation that would provide ample protection and remedies to the depositing public.
The lawmakers likewise revealed that majority of the closed banks are rural banks, thrift banks, savings banks and small commercial banks with deposit comprising funds of retirees, cooperatives, small-scale businesses, and mutual fund associations, among other depositors.
Currently, the maximum deposit insurance coverage of the Philippine Deposit Insurance Corporation (PDIC) of P500,000 per account does not cover the entire amount of deposits in the closed banks, the authors noted.
The resolution states that the depositors of these closed banks suffered substantial and irreparable economic damage as they could not recover their deposits in excess of the maximum deposit insurance coverage.
"The most adversely affected in this spate of bank closures are our constituents who entrusted their hard-earned money to the banks only to lose the same without any fault on their part," the lawmakers lamented.
They cited that in the recent closure of the Export and Industry Bank (EIB) - a commercial bank with thousands of depositors consisting of retirees, small entrepreneurs, and cooperatives, among others - the depositors bonded together to seek measures to recover their deposits, but has been hampered by inadequate legal remedies and protection despite the fact that a representative of the PDIC sits in the Board of Directors of EIB.
One of the points raised by the lawmakers is Section 30 of R.A. 7653 or the New Central Bank Act, the depositors who have actual, substantial, material, direct and immediate legal interest in the continued operations of banks are deprived of judicial recourse because only the majority stockholders of the bank have legal standing to question the orders and resolutions of the Monetary Board.
Section 30 of R.A. 7653 provides that orders and resolutions of the MB as regards conservatorship, receivership, and liquidation of troubled banks are immediately final and executory; and the right to judicially challenge the same is solely vested with the majority stockholders of the bank.
Historically, the lawmakers recalled that under Section 29 of R.A. 265 or the original law that created the Central Bank of the Philippines, the right to judicially challenge the orders and resolutions of the MB as regards conservatorship, receivership, and liquidation of troubled banks thereof was not exclusively vested in the majority of its stockholders and the onus (or responsibility) of justifying the closure of banks lies with the MBH.
"It is now imperative that we introduce reforms in our banking statutes to give ample protection to the depositing public," the lawmakers concluded.
The resolution was filed by Reps. Ronald Cosalan, Arthur Defensor, Jr., Jesulito Manalo and Romero Quimbo on behalf of the disgruntled depositors.