Statcon

Exclusio Unius Expressio Alterius

THE HONORABLE MONETARY BOARD AND GAIL U. FULE, DIRECTOR, SUPERVISION AND EXAMINATION DEPARTMENT II, AND BANGKO SENTRAL NG PILIPINAS, Petitioners, v.PHILIPPINE VETERANS BANK, Respondent

G.R. No. 189571, January 21, 2015

FACTS: Respondent established a pension loan product for bona fide veterans or their surviving spouses, as well as salary loan product for teachers and low-salaried employees pursuant to its mandate under Republic Act (RA) Nos. 3518 and 7169 to provide financial assistance to veterans and teachers. As its clientele usually do not have real estate or security to cover their pension or salary loan, other than their continuing good health and/or employment, respondent devised a program by charging a premium in the form of a higher fee known as Credit Redemption Fund (CRF) from said borrowers. Resultantly, Special Trust Funds were established by respondent for the pension loans of the veteran-borrowers, salary loans of teachers and low-salaried employees. These trust funds were, in turn, managed by respondent’s Trust and Investment Department, with respondent as beneficiary. The fees charged against the borrowers were credited to the respective trust funds, which would be used to fully pay the outstanding obligation of the borrowers in case of death.

On April 30, 2002, an examination was conducted by the Supervision and Examination Department (SED) II of the Bangko Sentral ng Pilipinas (BSP). It found, among other things, that respondent’s collection of premiums from the proceeds of various salary and pension loans of borrowers to guarantee payment of outstanding loans violated Section 54 of RA No. 8791 which states that banks shall not directly engage in insurance business as insurer.

On September 16, 2005, petitioners issued Monetary Board (MB) Resolution No. 1139 directing respondent’s Trust and Investment Department to return to the borrowers all the balances of the CRF in the amount of P144,713,224.54 as of...