Opposition Senator Chiz Escudero said the Central Bank Act (RA 7653) is more than sufficient for the Bangko Sentral ng Pilipinas (BSP) to exercise its supervisory functions and monetary policy over illiquid banks, like those rural banks owned by the Legacy Group of Companies.
Escudero chided the BSP for rushing Congress to pass the BSP Charter Bill to strengthen its supervision over distressed banks.
The BSP on Thursday said the bill has been pending in the legislature which they claim has delayed their actions to move faster in rehabilitating ailing banks.
The senator said the BSP cannot use the non-passage of the bill as a smokescreen for their incompetence in immediately addressing the problems of the rural banks which threatens to affect confidence in other rural banks all over the country.
"BSP cannot and should not pass the buck to Congress in their inability to do their job. They have been given unhampered powers of supervision and examination that the courts cannot even enjoin, unless bond is filed in the court where the case is pending," said Escudero, who is chair of the committee on banks, financial institutions, and currencies.
The Central Bank has already closed 13 rural banks of the Legacy Group since 2008 and these have been placed under receivership.
BSP said it was hampered to close down these banks even when they were already on the verge of insolvency and bankruptcy early in 2008 because the troubled banks secured a temporary restraining order from a Manila Regional Trial Court.
"That may be a factor why the BSP was not able to act swiftly on these banks to protect the public, but definitely not the law or the absence of the proposed amendatory bill," Escudero said.
The senator said BSP should stop blaming other parties for their failure to implement their mandate to protect the public.
He said Sections 29 and 30 of the RA 7653 allows the BSP to appoint a conservator and consequently cause receivership and liquidation if upon examination a bank is already having liquidity problem.