Press Release
December 23, 2008

ROXAS SEEKS PROBE ON BANK CLOSURES

Liberal President Senator Mar Roxas today said there was an urgent need to look into the recent closures of several rural banks, to protect depositors.

He has filed Senate Resolution No. 823, for the Senate committee on banks, financial institutions and currencies to conduct the inquiry.

"Kailangang palakasin ang mga regulasyon para mapigilan ang pagsara ng mga bangkong ito (Clearly, we have to strengthen regulations to prevent the closure of these banks)," said Roxas, in the wake of the closure of nine "Legacy Group" banks in the past month.

These are: Bank of East Asia, Pilipino Rural Bank and Philippine Countryside Rural Bank in Cebu, First Interstate Bank in Tacloban City, Rural Bank of Bais in Negros Oriental, Rural Bank of Parañaque, Rural Bank of San Jose, Dynamic Bank (formerly Rural Bank of Calatagan), and San Pablo City Development Bank in Batangas.

It is estimated that the PDIC would have to pay P7 billion-P11 billion in deposit insurance to depositors of these banks, due to alleged "pyramid" schemes wherein the banks would offer an annual return of as high as 20% for depositors.

"Kailangang protektahan ang taumbayan para ang mga bangko ay hindi mangako nang sobra-sobra na hindi naman mabayaran ang mga depositors (Our people have to be protected so that these banks do not promise depositors what they could not fulfill)," he said.

The BSP, he noted, had been stopped by regional trial court orders from issuing its findings of undercapitalization of the Legacy Group banks, until the Supreme Court reversed the lower court rulings.

"Nasa tungkulin ng gobyerno na protektahan ang sistemang pinansyal ng bansa, at kung kailangan, palakasin natin ang kapangyarihan ng BSP at iba pang ahensya para dito (It's the government's responsibility to protect

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