Immunity from suit sought for BSP execs during rehab

Jerry Maglunog

There is a clamor among officials of the Bangko Sentral ng Pilipinas (BSP) that they get immunity from suit during the painful process of putting a distressed bank under the receivership of the Philippine Deposit Insurance Corp. (PDIC).

Giving immunity to officials involved in rehabilitating a bank is enclosed in a bill that aims to amend the 22-year-old BSP charter.

Monetary Board member Felipe Medalla is one of those vocally espousing immunity from suit for all officials involved in closing a bank is a necessity.

“The biggest dilemma in our country is that those who have committed so many violations are the ones who have the guts to file suits,” Medalla said in an interview.

Immunity from suit is just one of the amendments being considered in the BSP charter once it is amended.

Other proposals include allowing the central bank to have a so-called symmetrical computation of losses during open market operations; a P100-billion to P200-billion automatic recapitalization; allowing the BSP to name two more deputy governors; allowing the BSP to float bonds again; and making the finance secretary permanent government representative to the Monetary Board.

Deputy Governor for Monetary Stability Sector Diwa Guinigundo said symmetrical computation of losses is very important because the national government (NG) benefits if the monetary flow favors the economy but the national government doesn’t share in the losses.

Among the mentioned amendments, Medalla said immunity is the most important because those sued by owners of closed banks are having a hard time coping with the expenses in litigations.

One of the officials involved now has 14 criminal suits. “It’s the only way for them to get even,” the MB member, who also served as director general of the National Economic and Development Authority (Neda), said.

Under his suggestion, those who must be given immunity are the head of the supervision and examination division, the governor of the BSP, the chief examiner, the president of the PDIC and all MB members.

Having a criminal suit is not easy to carry, the official said. Former Deputy Governor for Supervision and Examination Sector Alberto Reyes was suspended for six months without pay when top officials of the closed Urban Bank sued them in 2001.

Also almost suspended were the late Governor Rafael Buenaventura but he was spared. According to Medalla, it is very difficult to order the placement of any bank under PDIC receivership.

Former 11-year MB member Dr. Vicente Valdepenas agreed with Medalla, saying their P200,000 salary then at MB is not enough to pay lawyers when sued. Medalla didn’t disclose how much an MB member receives today.

More than a decade ago, bloodshed almost occurred when examiners of the BSP were about to enter Rural Bank of San Miguel in Bulacan. Because of the resistance, those who haf P100,000 deposits at the bank waited so long before their money was given back to them.

But Deputy Governor for SES Nestor Espenilla, is not suporting the clamor for immunity from suit for anyone involved in closing a bank.

“Those who are hell-bent in suing officials who ordered the closure must be given a hard time to succeed; not total immunity,” he said.

Former Budget Secretary Benjamin Diokno has an unsolicited advice to lawmakers in amending the BSP charter: subject the BSP governor to Commission on Appointments’ confirmation before serving a six-year term.

“In the US, the Federal Reserve chairman must hurdle a Senate panel equivalent to CA before he can assume the post,” Diokno said.

He said more often than not, the BSP governor is used in political maneuvering, which, in turn, is bad for the institution because the BSP must be an apolitical institution.

“During FVR’s time, he appointed his townmate (Gabriel Singson) to head the BSP. The result was not good because BSP was politicized during those years,” he said.

Singson was classmate and townmate of former president Fidel V. Ramos.