THE MONETARY BOARD has shuttered a rural bank based in Iloilo, marking the fifth lender to fold this year.
In a circular letter issued on Thursday, the Bangko Sentral ng Pilipinas (BSP) said it has ordered the Bangko Buena Consolidated, Inc. to stop its operations.
As regulator, the BSP can order the closure of problem banks with unhealthy balance sheets and insufficient assets to remain in business. The Philippine Deposit Insurance Corp. (PDIC) has taken over the bank as receiver effective last Friday.
Bangko Buena is run by its president, Cherlyn P. Dela Cruz-Payongayong, based on the BSP’s directory of lenders.
According to PDIC records, the bank runs seven branches in the Visayas. Bangko Buena is headquartered in Iloilo City but also had presence in other towns as well as in nearby Guimaras, Antique, Capiz, and Bacolod.
PDIC’s takeover allows the state-run deposit insurer to acquire the lender’s assets in order to pay outstanding liabilities to depositors. Bank deposits are insured up to P500,000 per depositor, according to the law. Funds used to settle valid deposit insurance claims are drawn from the Deposit Insurance Fund managed by the PDIC.
The state insurer also collects and resolves loans from borrowers and disposes of the bank’s remaining assets through its regular public biddings and negotiated sale, which will be used to settle claims beyond the P500,000 limit.
Bangko Buena follows the fate of four other small lenders shut down by the central bank this year. These are the Women’s Rural Bank, Inc., the Rural Bank of Initao (Misamis Oriental), Inc., the Empire Rural Bank and the Rural Bank of Loreto, Inc. in Dinagat Islands.
The central bank ordered the closure of six rural banks and one thrift bank last year. In 2016, the regulator closed 22 lenders.
The central bank has been encouraging mergers among small banks in order to fortify their financial footing by dangling a host of incentives for those who pursue such plans. — Melissa Luz T. Lopez

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