Gov’t urged to prosecute rogue bankers
MANILA, Philippines — An alliance of former high government officials has called on authorities to ensure that people behind fraudulent money-making schemes are prosecuted despite alleged connections to influential politicians.
Fraudulent banking practices are very costly to the government and damage public confidence in the banking sector, the Former Senior Government Officials (FSGO) said in a statement Monday.
Philippine Deposit Insurance Corp. (PDIC) has said it will would need about P14 billion to pay claims of depositors of the closed rural banks under the Legacy Group.
The FSGO, composed mostly of former economic officials, said the banks engaged in quasi-pyramiding schemes were enticing depositors by offering absurdly high interest rates.
After being closed by regulators, the banks simply left the burden of refunding deposits to PDIC, the group said.
The FSGO said the people behind the Legacy Group were not intending to do honest-to-goodness banking business but planned to subvert the system and defraud the government and depositors from the start.
“We enjoin the regulators to continue their vigilance in safeguarding the banking system and the depositing public, and in prosecuting wrongdoers to the full extent of the law, to act as deterrent for other, to hold those responsible accountable for their actions, and to keep people’s faith and trust in our banking system,†the FSGO said.
The FSGO welcomed the action of the central bank, Bangko Sentral ng Pilipinas (BSP), of closing down rural banks operating under the Legacy Group after they were found to engage in unsafe and unsound banking practices and failing to fully service withdrawals.
The group said that for a long time, “rogue†bankers had escaped penalties because they were protected by powerful and well-entrenched politicians.
“It is in this context and in furtherance of good governance that we commend and salute the Monetary Board and the BSP for the forceful exercise of their regulatory powers in the recent closures of those rogue banks involved in unsound and unsafe practices,†it said.
“For much too long, these criminal elements masquerading as bankers have abused the protection scheme afforded bank depositors by the PDIC. In the process, they have also defrauded depositors — large and small — in the same banks,†FSGO added.
PDIC has said it is examining the validity of claims of depositors of the closed rural banks and aims to start the payout by the second week of February.
The FSGO is composed of former PDIC presidents Ernest Leung, Norberto Nazareno, Ricardo Mirasol Tan, and Vitaliano Nanagas, former finance secretaries Cesar Purisima, Jesus Estanislao, and Ramon del Rosario Jr., former finance undersecretaries Milwida Guevarra and Edgardo del Fonso, former central bank governor Jose Cuisia; former Monetary Board members Cayetano Paderanga Jr. and Melito Salazar Jr., former national treasurer Leonor Briones, former Development Bank of the Philippines chairman Francisco del Rosario, former Land Bank of the Philippines president Deogracias Vistan, former budget secretaries Emilia Boncodin and Benjamin Diokno, and former trade and industry secretaries Juan Santos and Vicente Paterno. With editing by INQUIRER.net
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