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Statement of Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. Re: Legacy Banks


Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. today said more cases will be filed against executives under the Legacy Group connected with the closure of several rural banks. On their own, the management of these banks declared bank holiday.

Subsequently, the Bangko Sentral ng Pilipinas placed these banks under receivership of the Philippine Deposit Insurance Corporation as these were established to have insufficient assets to cover their liabilities, suffer from severe liquidity problems, and perform unsafe and unsound banking practices.  The receivership paved the way for the PDIC to take over the banks’ assets to protect the interest of their depositors and to start processing deposit insurance claims.

Governor Tetangco also said  Deputy Governor Nestor Espenilla, Jr. is being subjected to unfair and unfounded allegations.  In the matter of Rural Bank of San Jacinto (Masbate),  Governor Tetangco  said DG Espenilla has denied that he owns this bank. RB San Jacinto is a small rural bank incorporated by DG Espenilla’s mother in 1968 when he was ten years old.  He said DG Espenilla has issued the following declaration: “Since its establishment up to the present, I never owned any share of stock in RB San Jacinto nor was I involved in its management. I absolutely have no dealings with the bank, either as a borrower or an investor. I have never been employed by RB San Jacinto.” 

Governor Tetangco added that DG Espenilla continues to enjoy his trust and confidence. He said: “I have known Deputy Governor Nestor Espenilla in the 27 years that he has been a central banker. In all these years, I have known him to be a person of integrity who applies his intellect, professionalism, and dedication in serving the country well as a central banker.”

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