MANILA, Philippines - Shuttered thrift bank Banco Filipino will reopen within the month after the Court of Appeals ruled that its closure in 2011 was illegal, its vice chairman Perfecto Yasay said Friday.

Yasay said the CA decision ordering the Bangko Sentral ng Pilipinas (BSP) to reopen Banco Filipino and provide it with a P25-billion financial aid is "immediately executory" even if the central bank appeals the decision.

"What was filed by us before the CA was a certiorari or petition for review and mandamus. The mandamus is immediately implementable so even if the BSP resorts to an appeal, they can do so but they must implement the mandamus order first," he said.

Yasay added that the only thing that could stop Banco Filipino's reopening is a temporary restraining order (TRO) from the Supreme Court.

But he said a TRO from the high tribunal will also mean that Banco Filipino's receivership and asset liquidation that were ordered by the BSP in 2011 will be put on hold pending the resolution of the case.

'Illegal' closure

In a 50-page decision last Jan. 27, the CA ruled that Banco Filipino "was not accorded due process" when it was placed under receivership. The court also found that the bank was not insolvent as claimed by the BSP and its Monetary Board.

The MB issued Resolution No. 372-A on March 17, 2011, placing Banco Filipino under receivership for failing to service withdrawals and fund issued checks.

The MB claimed that the bank's liabilities topped its assets by P8.4 billion. The bank was also prohibited from continuing its business operations in the Philippines due to "unsound banking practices."

However, Yasay said that Banco Filipino's assets actually exceeded its liabilities by at least P25 billion. He added that the BSP-assigned comptroller of the bank had reported that as of December 2010, Banco Filipino's liabilities amounted to about P19 billion, and its assets were around P21 billion, resulting in a net of P1.5 billion.

"Even if there is a net of only 1 centavo, it's enough to establish that the bank was not insolvent, and there was no basis to close it," Yasay said.

Rehab plan

Yasay said he expects the BSP to be ready with a "viable" rehab plan and a liquidity fund facility, as ordered by the CA, once Banco Filipino reopens this month.

"The liquidity fund facility must be in place so if depositors decide to withdraw their deposits, there will be an amount that will answer to that and the transition from closure to reopening will be smooth."

Yasay said the BSP must obey the court's order to make sure that "depositors' interests are properly protected and safeguarded."

"We should not get into the question of sinong may kasalanan? That's past. The court has spoken. Sinabi na ng korte na walang basehan 'yan," he said.

Banco Filipino had approximately 177,000 accounts worth about P16 billion when it closed down in March, according to Yasay.

Ninety-seven percent of these accounts had deposits of P500,000 and below, and were covered by the Philippine Deposit Insurance Corp. (PDIC).

Yasay said all deposit accounts of less than P5,000 have already been paid by the PDIC.

Customer trust

Yasay said 3% or over 5,000 of their total depositors have not been able to recover their money.

He said the CA's decision to reopen Banco Filipino came as a "relief" to these depositors.

"These are the guys who constitute the P16 billion or so deposit base of Banco Filipino. Many have been keenly following the developments of this case and they are relieved about the decision of the CA," he noted.

Asked whether he is worried that their clients would no longer patronize them, Yasay said, "the decision of the CA has been carefully crafted so that confidence can be restored."

"Some depositors have agreed to tentatively keep their money there for the next three years to make sure that the bank will be able to recover," he said.