Aquino government assures banking system remains sound and stable

May 7, 2012 9:51 pm 

MANILA, May 7 — The Aquino administration assured the public that the overall Philippine banking system remains sound and stable despite the closure of the Export and Industry Bank Inc. (EIB), a Malacanang official said on Monday.

Presidential Spokesperson Edwin Lacierda issued the statement during the regular press briefing in the Palace on Monday to allay the fears of the public following the closure of the bank.

"Rest assured that the banking system is financially sound po; mas malakas po ang ating banking system. And that’s why Governor Amando Tetangco Jr. (of Bangko Sentral ng Pilipinas) is encouraging the use of banking institutions," Lacierda stressed.

In a statement, the BSP said that the Monetary Board placed Export and Industry Bank Inc. under a receivership on April 26, 2012 pursuant to Section 30 of Republic Act No. 7653 or The New Central Bank Act.

The BSP said the board made its decision on account of the bank's “inability to meet its obligations as they become due, insufficient realizable assets to meet its liabilities and its inability to continue in business without involving probable losses to its depositors or creditors.”

Moreover, it also said that the EIB wrote BSP to “surrender the bank operations to the Bangko Sentral ng Pilipinas and to declare a bank holiday effective April 12, 2012.”

The BSP noted that the Philippine Deposit Insurance Corporation (PDIC) stands ready to service valid deposit claims from depositors of EIB and complete processing of claims as soon as possible.

Likewise, the BSP said the overall Philippine banking system remains sound and stable with ample liquidity and high level of capitalization.

The BSP assured that the closure of EIB is not expected to adversely affect the Philippine banking system considering its relatively small size. Its total assets are equivalent to only about 0.3 percent of the total assets of the banking system. (PNA)

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