Case Study for Banco Filipino Closure

2785 Words Dec 11th, 2011 12 Pages
OVERVIEW OF THE CASE

“Subok Na Matibay, Subok Na Matatag” (Tested Strong, Proven Stable), the slogan of once well-known and once most popular bank in the Philippines, the Banco Filipino, formerly known as Banco Filipino Savings and Mortgage Bank, but surprisingly, it was closed twice in 1985 and in 2011 in the history of banks in the Philippines.

Banco Filipino started its operation in 1964, founded by Tomas Aguirre and was known as one of the thrift bank. The Aguirre family together with the founder control and manage the aforementioned bank. And In 1965, Banco Filipino innovated and became the first all-woman bank, making it number 1 among the banks back then. Because of its continuous innovation of its services, in 1966 it became
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Banco Filipino is well-known, for it has personalized services that are in line with its corporate philosophy, thus making it more attractive to some investors and depositors.

. But then history repeats itself, on March 15, 2011 (Tuesday), Banco Filipino voluntarily closed its branches from depositors without prior notice. At that time for the second time, only the assigned guards can be found in branch premises. Two days later, Banco Filipino was reclosed again on March 17, 2011 by the Bangko Sentral ng Pilipinas formerly known as the Central Bank of the Philippines due to illiquidity and insolvency, since its liabilities is greater than its assets which is expressly prohibited by law which states that a bank's assets must equal or be in excess of its liabilities wherein in the case of the Banco Filipino its liabilities exceeded its asset by PHP 8,400,000.00. The BSP placed it under the receivership of Philippine Deposit Insurance Corp. (PDIC). BSP said that it had gathered sufficient evidence showing the bank's top officers mismanaged their

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