Some members of the House of Representatives filed a resolution recently for a congressional probe on the unpaid loans reaching over P2.1 billion that were granted to the owners of the now closed Banco Filipino that may have contributed to its demise.

House Resolution 610 – which was filed by Party-list Reps. Enrico Pineda of 1-Pacman, Francisco Datol of Senior Citizens, Virgilio Lacson of Manila Teachers, Ron Salo of Kabayan and Jorge Antonio Bustos of Patrol – seeks to look into the alleged fraudulent disbursements made by officers of the bank reached P789.4 million.

The solons said that the congressional probe will help them craft new laws that would prevent bank owners and officials from abusing their positions to further enrich themselves.

To recall, Banco Filipino was ordered closed by the Monetary Board of the Bangko Sentral ng Pilipinas on 17 March 2011 and placed it under receivership due to alleged “dubious, unsafe and unsound banking practices,” among other alleged violations, noted in the resolution.

More recently, the Philippine Deposit Insurance Corporation (PDIC) has filed a criminal case against officials of the closed bank for paying over P700 million in legal fees to various law firms without any contracts or supporting documents.

PDIC filed the case before the Department of Justice saying the bank officials conducted business “in an unsafe or unsound manner” as Banco Filipino was in dire financial difficulty when the fees were paid.

The legal fees cost the bank P789.56 million and it was eventually closed and placed under the PDIC receivership.

“Moreover, a partner of the law firm which was paid the amount of P225.87 million was a director of the Bank,” PDIC said in a statement.

Charged were the Bank’s chairman and president; vice chairman; four directors; corporate secretary and executive vice president; and other high ranking officers, said PDIC.