A run among Rural Banks (RBs) appear to be spreading after three banks, one in Dumaguete and two in Pampanga, recently declared holidays after experiencing massive withdrawals.
The banks were apart from 10 banks of the Legacy Group that the Bangko Sentral ng Pilipinas (BSP) assumed control of after they declared bank holidays. The BSP then insisted that the collapse of the 10 banks were not at all related to a spreding global financial crisis since the banks were on its watchlist long before the crisis struck due to “unsafe and unsound banking practices.”
The Rural Bank of Subangdako (RBS)-Dumaguete branch has closed shop after experiencing massive withdrawals of deposits the past weeks. RBS clients were caught by surprise upon seeing the notice posted at the bank premises yesterday, which said it has declared a bank holiday and was awaiting for the Philippine Deposit Insurance Corp. (PDIC) to assume control of the bank without stating the reasons.
Two other rural banks in Pampanga, the Rural Bank of Bacolor and the Rural Bank of Sta. Rita declared bank holidays, according to the BSP.
BSP Deputy Gov. Nestor Espenilla Jr. said the two Pampanga banks unilaterally declared holidays for reasons unrelated to issues hounding the Legacy Group of banks.
“The Rural Banks of Bacolor and Sta. Rita are on holiday. They have related owners but they are not linked (to the Legacy Group),” he said.
Both banks were hounded by “management and governance issues uniquely their own,” according to Espenilla.
RBS-Dumaguete depositors trooped to the BSP office in Dumaguete to inquire about the status of the bank.
The BSP branch in Dumaguete was not informed of the declaration of a bank holiday by RBS, according to Paulita Enrile, head of the BSP office in Dumaguete.
The main RBS branch in Mandaue, Cebu, however, informed the BSP headquarters in Manila about the Dumaguete branch’s declaration of a bank holiday.
The bank has to undergo a thorough evaluation before its assumption by the PDIC, Enrile pointed out.
This brought to four the number of rural banks being turned over to the PDIC for receivership in Dumaguete.
The other banks were the Rural Bank of Bais in Bais City and its branch in Tanjay City and the Pilipino Rural Bank, all under the Legacy group of companies and the impending turnover of the RBS.
Enrile reiterated pronouncements this represents a tiny fraction of the entire banking system.
The local BSP branch officer said it was waiting for RBS to avail of the emergency loan package after experiencing massive withdrawals of deposits.
Sources, however, said RBS may have failed to meet the collateral requirements before the infusion of funds by BSP.
“We will do what we need to do to protect the depositors,” Espenilla said.
Existing law guarantees the return of deposits up to only P250,000 per depositor by the PDIC, the state-owned deposit insurer. There are ongoing efforts to raise the deposit insurance to P500,000 per depositor.
Earlier, 10 banks under the wings of the Legacy Group successively folded the prompted their being placed under receivership with the PDIC.
The failed banks are the Nation Bank in Bacolod City which declared a bank holiday on Dec. 12, Rural Bank of DARBCI based in General Santos City which declared a holiday on Dec. 17, the Bicol Development Bank based in Legaspi City and the Rural Bank of Carmen based in Carmen, Cebu.
The nine other banks from the same group that have been placed under PDIC receivership were the Rural Bank of Parañaque last Dec. 9, the Rural Bank of Bais based in Negros Oriental, the Pilipino Rural Bank based in Cebu and the Rural Bank of San Jose based in San Jose, Batangas last December 11; and the Bank of East Asia based in Cebu, the First Interstate Bank based in Tacloban; the Philippine Countryside Rural Bank based in Cebu last Dec. 12; and the Dynamic Bank (RB of Clatagan) based in Batangas and the San Pablo City Development Bank based in Laguna last Dec. 16.
PDIC president Jose Nograles had assured depositors of the Legacy Group banks placed under receivership that PDIC will pay all valid claims for deposit insurance.
He added that PDIC personnel have been immediately deployed to undertake receivership and claims operations. –Ruben Hortelano, Daily Tribune
June 2025
Philippine Environment Month!
“Action for Nature, for the Future!”
Invoke Article 33 of the ILO Constitution
against the military junta in Myanmar
to carry out the 2021 ILO Commission of Inquiry recommendations
against serious violations of
Forced Labour and Freedom of Association protocols.
Accept National Unity Government (NUG)
of Myanmar. Reject Military!
#WearMask #WashHands #Distancing #TakePicturesVideosturesVideos
Monthly Observances:
1 Jun – World Day of Parents
5 Jun – World Environment Day
7 Jun – World Food Safety Day
8 Jun – World Oceans Day
12 Jun – World Day Against Child Labour
15 Jun – World Elder Abuse Awareness Day
16 Jun – International Day of Family Remittances
17 Jun – World Day to Combat Desertification and Drought
20 Jun – World Refugee Day
25 Jun – Day of the Seafarer
27 Jun – Micro-, Small and Medium-sized Enterprises Day
Daily Observances:
June 6: Migrant Workers Day
June 19: Filipino Youth Day
June 25: Day of the Filipino Seafarer
