Rural Bank of San Miguel, Inc.

and Soriano
v.
Monetary Board Bangko Sentral ng Pilipinas and PDIC
G.R. No. 150886
February 16, 2007

Facts:
The Rural Bank of San Miguel is a domestic banking corporation in the Philippines with 15
branches in Bataan, with Soriano as its major stockholder. It was placed under receivership by
the Monetary Board with PDIC as receiver, and later on for closure due to the inability of the
bank to pay its liabilities. It was found out that the bank has been unable to meet its depositor’s
demands, failure to replenish its special clearing demand deposit with DBP, several emergency
loans made with BSP, and declaration of a bank holiday. The bank and its stockholders protested
the closure assailing that the Monetary Board acted with grave abuse of discretion by ordering
the closure without a complete examination being conducted, and filed a petition with the CA.
CA denied the petition, which allowed the PDIC to proceed with the liquidation of the bank, hence
this petition.
Issue: Whether or not the New Central Bank Act require a current and complete examination of
the bank before it can close and place the bank under receivership.
Ruling: No.

In RA 7653, only a "report of the head of the supervising or examining department" is

necessary. The word "report" has a definite and unambiguous meaning which is clearly different
from "examination, it may be defined as "something that gives information" or "a usually detailed
account or statement while, an examination is "a search, investigation or scrutiny. rom the words
used in Section 30, it is clear that RA 7653 no longer requires that an examination be made before
the MB can issue a closure order. We cannot make it a requirement in the absence of legal basis,
especially if using the literal meaning of "report" does not lead to absurdity, contradiction or
injustice. Neither does it defeat the intent of the legislators. The purpose of the law is to make
the closure of a bank summary and expeditious in order to protect public interest. This is also
why prior notice and hearing are no longer required before a bank can be closed.