Banco Filipino Had Been Waving Red Flags

3.25.2011

Banco Filipino, which was shuttered by the PDIC this March, had been waving red flags over a long time. But its depositors have not seen them.

The RED flags:

1. Banco Filipino was closed by the Bangko Sentral ng Pilipinas in 1985 and remained closed until 1992.

2. The bank has not been submitting its balance sheet and financial reports since the first quarter of 2008 -- the oldest quarter for which the BSP has balance sheet reports on its website. We can assume that Banco Filipino has not been submitting reports even before this time.

3. Banco Filipino has been asking the BSP to release the 25-billion-peso loan package it promised to provide the bank as part of negotiations related to the closure of the bank in 1985.

4. In addition to the loan package, the bank has been seeking 18.8 billion pesos in compensation for the claimed illegal closure of the bank by the BSP in 1985.

There are things depositors can learn from the shuttering of Banco Filipino Savings and Mortgage Bank.