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which bank is the best place to save money in the philippines?

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davidcarlgrimes

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Banco Filipino failed because of fraud: http://bancofilipinofailure.blogspot.com/2011/08/system-is-broken.html

LBC Development Bank seems to have failed because of fraud: http://bancofilipinofailure.blogspot.com/2012/03/lbc-development-bank-where-did-money-go.html

Export and Industry Bank failed because it suffered such high losses way back in the 2000s that it could not recover at all: http://bancofilipinofailure.blogspot.com/2011/09/bsps-ampaw-accounting-system.html

If you want to check how your bank is doing, visit: bancofilipinofailure.blogspot.com


Prospera

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Great, well-researched blog you have there! If I hadn't read the entries on Banco Filipino and LBC, I would never have found out the extent of the fraud that bank-owners like Bobby Aguirre or Charlie Araneta are capable of inflicting on ordinary folks whose only fault was choosing the wrong banks to deposit their hard-earned savings in.

And the BSP's slowness to act to preempt -- or even just to lessen --the damage (particularly in the BF case) doesn't inspire confidence in the system.

"Caveat emptor" clearly remains the best course of action in any kind of business dealing, including where one chooses to park his/her savings.

(Just curious: are you Filipino? You have a huge resemblance to George Bush per your profile pic.)


bajoyjoy

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^The “slowness” however, is also a consequence of exercising prudence, strictly following the rules on bank audit and examination, investigation/receivership procedures and respecting the confidential nature of these processes, in order to avoid premature bank runs (among others) and the contagion it could potentially trigger to the entire banking system. It just so happen (and thankfully), that these are small banks and had very little effect in our financial system. Imagine if one of the top 5 banks is experiencing these same issues or allegedly committing fraud, and somebody lets an info/tip out about XXX bank currently under “special” examination by the BSP, everyone panics, and a gaping hole is created even before the examination/investigation is completed. Eh what if after the examination they find out that the bank may be experiencing cash flow problems the past few months, but it doesn’t mean the bank should be closed down, because if you look at their books closely, in a year or two, their capital assets (like foreclosed mortgages) will start generating income sufficient to meet the reserve requirements and other obligations again…. The solution therefore is to give it time to recoup their investments, maybe lend some cash to the bank and help it get its bearings back until it can handle all its affairs on its own. But because somebody got a word from his neighbor from BSP that XXX bank is getting bankrupt (exag magtsismis), she makes a text brigade to all her co-depositors and the day after, the bank indeed failed to service these  massive withdrawals.  Instead of helping the bank and the depositors (as well as the bank employees na biglang mawawalan ng trabaho), lalo nagkaproblema. And the BSP personnel who prematurely let that info out, will be criminally liable, if not the entire BSP.

So most of the time, you hear some rumor about your neighborhood bank and you try to confirm this to BSP, they will say they know nothing of that sort. Its not because they are slow, but because they do not want to create panic. And usually, the info that a bank will be closed is known only to not more than 5 people (the team handling the examination and the approving authorities and we don’t know the kind of harassments/death threats they get from banks under investigation na talagang may itinatagong anomalya). Kaya pare-parehong nagkakagulatan on the day of closure, which is just fair, imho. Anyway, may PDIC coverage naman, kung talagang wala ng ibang recourse to rehabilitate and save the bank, then at least may way naman ang depositors to recover their money.

I agree that the interest of the depositors should be the priority, but the rights and interest of the bank and the entire banking system, should also be given ample protection, dapat mag-balance din to minimize damage to all parties concerned.. It’s a tricky thing. Kaya sabi nga ni miko, its all about timing. :D



Prospera

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^Hindi ka naman taga-BSP o Monetary Board, bjj? :-) (Am I getting warm?)

I understand, of course, the need for the BSP to act with prudence when it comes to sensitive matters involving banks they are tasked to oversee.

In fact, I read that Banco Filipino even had the gall to file a Php 18-billion damage suit vs the BSP in the course of the 9 years it took for the agency to investigate, rehabilitate and finally order the bank to stop operations. And I distinctly remember hearing BF's CEO Perfecto Yasay on radio claiming at one time that the BSP's closure order was unwarranted, that the bank's assets were more than enough to cover its liabilities, etc, etc. It turns out that the truth of the matter was that BF had long been engaging in fraud--giving out massive loans to dummy corporations associated with Mr. Aguirre--operating what in effect was a Ponzi scheme, using new depositors' money to keep up the appearance of liquidity.

Perhaps, it's a tough balancing act the BSP has to perform to preserve the stability of the banking system. But let's hope things vastly improve as soon as possible so the day won't dawn when ordinary people will prefer keeping their money underneath their mattress than put it in a bank account.


freefront

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^ and here I thought it was one of those "we want, we take" manuever of the Marcos cronies) at least the first time it happened)


davidcarlgrimes

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Being too prudent could be imprudent.

For instance, Banco Filipino was problematic for a long time since 2002, yet it only collapsed in 2011.  Meanwhile, more depositors got hurt.  Deposits grew from Php 7 billion in March 2004 to Php 15 billion when it collapsed in March 2011.

LBC Development Bank's "Other Assets", presumably the advances it made to the LBC Group's Affiliates like LBC Express, was bigger than its Loan Portfolio since 2005 but was only placed under BSP's Prompt Corrective Action (PCA) Program in 2008.  This did nothing to stop the growth of Other Assets from Php 1.07 billion as of year end 2005 (1.77 times the Total Loan Portfolio) to Php 2.69 billion as of year end 2008 (3.6 times the the Total Loan Portfolio) to Php 4.76 billion (5.4 times Total Loan Portfolio) when it collapsed in 2011. http://bancofilipinofailure.blogspot.com/2012/03/lbc-development-bank-where-did-money-go.html

In other words, the bank wasn't in the business of making loans to the public.  It looked like it was in the business of financing the LBC Group.  And who was financing the bank, the depositors of course!  Deposits grew from Php 2.274 billion as of year end 2005 to Php 4.345 billion when it was placed under BSP's PCA Program in 2008 to Php 6.094 billion when it collapsed in 2011.  The bank's capital grew, but not as fast as deposits.  Obviously, more depositors got hurt.

In the case of Export and Industry Bank, the bank was actually bankrupt in 2005 when its capital funds was a negative Php 0.5 billion.  In other words, there was nothing backing up the bank's assets of Php 24.5 billion.  Through financial engineering, it was able to boost its equity to Php 5.4 billion by year end 2006. But its capital position was actually worse because that year, the bank sold Php 13.4 billion of Non-performing assets (NPAs) to a Special Purpose Vehicle (SPV) for only Php 3.515 billion, realizing losses of Php 9.21 billion.  Now where did these losses go?  The bank, with the permission of the BSP, simply pretended that they weren't there. BSP's "regulatory relief" was designed in the hope that banks can "earn" their way out of their losses when the economic cycle improves.  But sometimes the bank is just too far gone to earn their way out of losses. So instead of having an asset base of Php 34.5 billion in 2006, its real asset base was much less, around Php 25.29 billion. If it didn't add anymore assets such as deposits, it would take 39 years for the bank to earn those assets back at a the average 0.8% ROA (return on assets) the Universal and Commercial Banks posted from March 1999 to Dec 2006. It would take 18 years just to get their actual equity back up to zero capital at that rate.  So too boost returns, they had to add more assets, meaning deposits.  And deposits did grow from Php 15.9 billion in 2006 to around Php 18 billion by June 2011.  Obviously, more people got hurt.

If you want to know how your bank is doing, go to www.bancofilipinofailure.blogspot.com





OMG.27

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I do recommend Malayan Bank personally.. Bank staff are quite accommodating and client are not congested like any other bank...


rose.bello.988

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hi pd mag ask about sa time deposit pd ba aq magtime deposit pro gusto ko pa din dagdagan un tinime deposit ko pd ba un bago lng po aq sa forum na eto d ko alam kung paano o saan ako ppsok na mga topic salamat oi in advance  :thankyou:


rodeo

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I do recommend Malayan Bank personally.. Bank staff are quite accommodating and client are not congested like any other bank...
Mayroon po bang 5-yr TD na ino-offer ang Malayan Bank? for 500k po and what is their prevailing rate po sa ngayon?


richpulubi

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Being too prudent could be imprudent.

For instance, Banco Filipino was problematic for a long time since 2002, yet it only collapsed in 2011.  Meanwhile, more depositors got hurt.  Deposits grew from Php 7 billion in March 2004 to Php 15 billion when it collapsed in March 2011.

LBC Development Bank's "Other Assets", presumably the advances it made to the LBC Group's Affiliates like LBC Express, was bigger than its Loan Portfolio since 2005 but was only placed under BSP's Prompt Corrective Action (PCA) Program in 2008.  This did nothing to stop the growth of Other Assets from Php 1.07 billion as of year end 2005 (1.77 times the Total Loan Portfolio) to Php 2.69 billion as of year end 2008 (3.6 times the the Total Loan Portfolio) to Php 4.76 billion (5.4 times Total Loan Portfolio) when it collapsed in 2011. http://bancofilipinofailure.blogspot.com/2012/03/lbc-development-bank-where-did-money-go.html

In other words, the bank wasn't in the business of making loans to the public.  It looked like it was in the business of financing the LBC Group.  And who was financing the bank, the depositors of course!  Deposits grew from Php 2.274 billion as of year end 2005 to Php 4.345 billion when it was placed under BSP's PCA Program in 2008 to Php 6.094 billion when it collapsed in 2011.  The bank's capital grew, but not as fast as deposits.  Obviously, more depositors got hurt.

In the case of Export and Industry Bank, the bank was actually bankrupt in 2005 when its capital funds was a negative Php 0.5 billion.  In other words, there was nothing backing up the bank's assets of Php 24.5 billion.  Through financial engineering, it was able to boost its equity to Php 5.4 billion by year end 2006. But its capital position was actually worse because that year, the bank sold Php 13.4 billion of Non-performing assets (NPAs) to a Special Purpose Vehicle (SPV) for only Php 3.515 billion, realizing losses of Php 9.21 billion.  Now where did these losses go?  The bank, with the permission of the BSP, simply pretended that they weren't there. BSP's "regulatory relief" was designed in the hope that banks can "earn" their way out of their losses when the economic cycle improves.  But sometimes the bank is just too far gone to earn their way out of losses. So instead of having an asset base of Php 34.5 billion in 2006, its real asset base was much less, around Php 25.29 billion. If it didn't add anymore assets such as deposits, it would take 39 years for the bank to earn those assets back at a the average 0.8% ROA (return on assets) the Universal and Commercial Banks posted from March 1999 to Dec 2006. It would take 18 years just to get their actual equity back up to zero capital at that rate.  So too boost returns, they had to add more assets, meaning deposits.  And deposits did grow from Php 15.9 billion in 2006 to around Php 18 billion by June 2011.  Obviously, more people got hurt.

If you want to know how your bank is doing, go to www.bancofilipinofailure.blogspot.com





FYI, you'll only get hurt if you exceed PDIC insurance.  I had money in LBC and BF and other small high risk banks...but all within PDIC.  I've never lost money when they closed.



grayback_01

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thanks for the information richpulubi.


OMG.27

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Mayroon po bang 5-yr TD na ino-offer ang Malayan Bank? for 500k po and what is their prevailing rate po sa ngayon?

Meron. Much better you visit them and inquire about their products. They will be glad to entertain you and explain to you more further...


OMG.27

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hi pd mag ask about sa time deposit pd ba aq magtime deposit pro gusto ko pa din dagdagan un tinime deposit ko pd ba un bago lng po aq sa forum na eto d ko alam kung paano o saan ako ppsok na mga topic salamat oi in advance  :thankyou:

What bank do you prefer to open for time deposit? You may visit them personally to ask about your query... I am sure, it will be explain to you for better understanding and clarification.


rodeo

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Meron. Much better you visit them and inquire about their products. They will be glad to entertain you and explain to you more further...
thanks, will do visit them one of these days....


 


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