Philippines

Another rural bank has been shuttered by the Bangko Sentral ng Pilipinas, ABS-CBN News reported. The Monetary Board (MB) placed the Rural Bank of Padre Burgos (Southern Leyte), Inc. under the receivership of the Philippine Deposit Insurance Corporation (PDIC) last September 12. The PDIC took over the bank on September 15. The rural bank's head office is located in Poblacion, Padre Burgos, Southern Leyte. As of June 30, 2014, records showed the bank has 6,120 accounts with total deposit liabilities of P32.6 million.

The biggest political crisis that President Benigno S. Aquino III of the Philippines has faced in four years in power could damage his image as a crusader against corruption and undermine his ability to deliver on overhauls to sustain strong economic growth, the International New York Times reported. The Supreme Court has declared partly illegal a 145 billion peso, or $3.34 billion, economic stimulus fund that Mr. Aquino created in 2011 from budget savings.

The Government Service Insurance System (GSIS) has extended the deadline for its housing loan restructuring program by another six months or until June this year, The Philippine Star reported. In a statement, the state pension fund said member-borrowers with current accounts have until June 30 to avail of the program. Under the program, the GSIS will condone all unpaid penalties and surcharges and grant extended payment terms to qualified applicants.

Hundreds of depositors here have been trooping to the Rural Bank of Hagonoy Inc. in Barangay (village) Guihing in Hagonoy, Davao del Sur for two weeks now in the hopes of withdrawing their hard-earned money but went home without getting a centavo, The Inquirer reported. Loloy Diabordo, Hagonoy town information officer, said most of those wanting to withdraw money were small time depositors – mainly laborers or sari-sari store owners. “What greeted them was a large-sized notice that the bank is now under receivership by the Philippine Deposit Insurance Corp.

The Bangko Sentral ng Pilipinas (BSP) has foreclosed a 38-year-old rural bank that caters mostly to small and medium-scale enterprises in Bulacan, due to insolvency, the Philippine Daily Inquirer reported. The BSP has placed the Cooperative Rural Bank of Bulacan (CRBB) under receivership of the Philippine Deposit Insurance Co. (PDIC) since May 24. Affected are CRBB’s main office here and its branches in 13 towns and cities in the province. The Inquirer learned that CRBB had a P79-million debt to the Small Business Guarantee and Finance Corp.

High levels of bad and classified loans weighed on the finances of the Makati-based LBC Development Bank, which was recently closed by the Bangko Sentral and placed under the receivership of the government’s Philippine Deposit Insurance Corp, Manila Standard Today reported. Data from the Bangko Sentral showed that LBC Development Bank, a thrift bank formerly known as the Banco Real Development Bank that was taken over by the LBC Group of Companies in 1995, suffered from high levels of bad and classified loans.

LBC Development Bank, a unit of the LBC Group, has been placed under receivership of the Philippine Deposit Insurance Corp (PDIC), the Philippine Daily Inquirer reported. In a statement over the weekend, PDIC said it took over the assets and liabilities of LBC bank after the Monetary Board of the central bank determined that the institution was plagued by liquidity problems. LBC Development Bank, with head office on JP Rizal St. in Makati City, had 19 branches nationwide. As of end-June this year, total deposits placed with the bank amounted to P6.09 billion.

Philippine central-bank governor Amando Tetangco Jr. said Tuesday that inflation in the country is under control and that the bank might not have to raise interest rates as much as some economists predict to contain the threat, The Wall Street Journal reported. Last Thursday, the Bangko Sentral ng Pilipinas increased its overnight borrowing rate by a quarter percentage point to 4.25%—the first interest-rate move since July 2009—and many analysts expect more rate moves to follow. Some predicted interest rates could increase by a total of one percentage point this year.

The Philippine central bank said on Thursday it placed Banco Filipino Savings and Mortgage Bank under receivership, saying 97 percent of depositors were fully covered by deposit insurance of up to 500,000 pesos ($11,400), Reuters reported. The Philippine Deposit Insurance Corporation started to take over Banco Filipino's head office and branches on Thursday afternoon to secure records and documents, the Bangko Sentral ng Pilipinas said on its website. A Banco Filipino official said the bank had deposits of 17 billion pesos ($387 million) and 62 branches nationwide.

National carrier Philippine Airlines, which has bled more than P15 billion ($337.6 million) in the past two fiscal years, is spinning-off its three non-core units as a last resort to avoid bankruptcy, Philstar.com reported. PAL will spin off the following units: in-flight catering services; airport services, including ground handling, cargo handling and ramp handling; and call center reservations by end of May. The move will enable PAL to save as much as P1 billion ($22.5 million) a year, PAL President and COO Jaime Bautista said in a press briefing today.