By Rey E. Requejo

THE Supreme Court has allowed ailing Banco Filipino to pursue its P18.8-billion suit against the Bangko Sentral for its illegal closure in 1985.

In allowing the suit to proceed, the court?s Third Division upheld a Court of Appeals ruling that the Bangko Sentral is a ?successor-in-interest? of the Central Bank, which padlocked and liquidated Banco Filipino during the Marcos regime.

In January 2004, a Makati court granted Banco Filipino?s motion to implead the Bangko Sentral and its Monetary Board. The Makati Court?s decision was upheld by the appeals court in 2006.

Although the Central Bank, the original defendant, became the Central Bank Board of Liquidators, its transfer of assets to the Bangko Sentral while the civil case was pending subjected the new entity to suit as well, the appeals court said.

The Supreme Court declared the closure ?arbitrary and with grave abuse of discretion? in 1991.

In a press conference, lawyer Perfecto Yasay Jr., co-chairman of Banco Filipino, appealed to the Bangko Sentral to ?stop covering for the sins of the Central Bank,? warning that a further delay in enforcing the Supreme Court ruling would drag down its credibility as a regulator of the banking industry.

He pointed out that the Supreme Court itself, finding the closure of the Banco Filipino in 1985 illegal, had ordered the immediate restoration and reorganization of the bank to bring it back at least to its previous status as the leading savings and mortgage institution of the country.

?But instead of helping [Banco Filipino], it sought its further destruction through oppressive and arbitrary actions in order to vindicate the unlawful acts of its predecessor,? Yasay said.

The Supreme Court ruling held Bangko Sentral accountable for the excesses committed by the old Central Bank, Yasay claimed, thus making it liable for the P18.8 billion in damages that Banco Filipino was seeking.

?With this resolution... the banking regulator can now move forward without being scared of its own shadow, and ensure that the quest for justice that Banco Filipino had long sought will now be found,? Yasay said.

He also urged the Bangko Sentral to approve the bank?s business plan, which originally was submitted in 2004 and modified at least seven times.

On July 27, 1984, when Banco Filipino was placed under conservatorship, the bank filed its first civil case.

On Jan. 25, 1985, the Central Bank ordered the closure of Banco Filipino and placed it under receivership. Banco Filipino filed its second civil case.

On March 22, 1985, Banco Filipino was placed under liquidation, prompting the padlocked bank to file its third civil case.

The Supreme Court ordered the three civil cases consolidated on Aug. 29, 1985. Six years later, on Dec. 11, 1991, the Supreme Court annulled and set aside MB Resolution 75, ordered the reorganization and re-opening of Banco Filipino, and ruled that its closure was done ?arbitrarily and with grave abuse of discretion.?

Two years after the Central Bank was abolished and replaced by Bangko Sentral, Banco Filipino filed an amended complaint to include the new monetary authority in its suit.

The bank also sought damages from the estate of former Central Bank Governor Jose Fernandez Jr., who was responsible for its closure in 1985.