G.R. No. 178696 - BANGKO SENTRAL NG PILIPINAS AND ITS MONETARY BOARD, VS. BANCO FILIPINO SAVINGS AND MORTGAGE BANK.[G.R. No. 192607]BANCO FILIPINO SAVINGS AND MORTGAGE BANK, VS. CENTRAL BANK BOARD OF LIQUIDATORS.D E C I S I O N - Supreme Court E-Library

Ruling

ACCORDINGLY, decision is hereby rendered as follows: x x x x 2. The petitions in G.R. No. 70054, 78767 and 78894 are GRANTED and the assailed order of the Central Bank and the Monetary Board dated January 25, 1985 is hereby ANNULLED AND SET ASIDE. The Central Bank and the Monetary Board are ordered to reorganize petitioner Banco Filipino Savings and Mortgage Bank and allow the latter to resume business in the Philippines under the comptrollership of both the Central Bank and the Monetary Board and under such conditions as may be prescribed by the latter in connection with its reorganization until such time that petitioner bank can continue in business with safety to its creditors, depositors and the general public . [12] (Emphasis supplied.) Less than two years thereafter, or on July 6, 1993, Republic Act No. 7653, otherwise known as The New Central Bank Act of 1993 , took effect. [13] This new law abolished the CB and a new central monetary authority was established known as Bangko Sentral ng Pilipinas . [14] But also under the said law, the CB will continue to exist under the name Central Bank-Board of Liquidators [15] (CB-BOL) for the sole purpose of administering and liquidating the assets and liabilities of the CB that were not transferred to the BSP. [16] During meeting held on November 6, 1993, the BSP-MB, resolved - 1. To allow the Banco Filipino Savings and Mortgage Bank (BFSMB) to reopen, subject to submission of its proposed organization including the list of officers and its plan of operations; 2. To instruct Management to write BFSMB officially, advising them of this decision and to ask the bank to collateralize its advances from the Bangko Sentral ng Pilipinas (BSP); and 3. To authorize Management to file a case in Court for the recovery of its advances including interest thereon and look for private a counsel to (a) advise the Monetary Board on the ancillary legal issues and (b) to act as counsel for the BSP Monetary Board in the filing of a civil case against the BFSMB for recovery of money. [17] Thus, on July 1, 1994, BFSMB reopened and resumed business under the comptrollership of the BSP. On December 20, 1999, Memorandum of Agreement [18] was entered into by and between the BSP and BFSMB. In said agreement, BFSMB was to repay to BSP the amount of P3,673,031,589.36 by way of dacion en pago of some of its real properties. The amount owed by BFSMB represented the so-called advances extended to it by the defunct CB. Further, pursuant to the aforementioned Memorandum of Agreement, BSP has to lift its comptrollership over BFSMB on January 20, 2000, and deliver to the latter all collaterals in its custody, including government securities held by designated comptrollers. [19] Sometime in December 2002, BFSMB experienced massive withdrawals. [20] Thus, BFSMB applied for emergency financial assistance from the BSP to maintain liquidity. However, such assistance appeared to have been insufficient to stem the effects of the massive withdra