Case Digest (G.R. No. 150128)
Facts:
In Philippine Deposit Insurance Corporation v. Citibank, N.A. and Bank of America, S.T. & N.A. (G.R. No. 170290, April 11, 2012), the Philippine Deposit Insurance Corporation (PDIC), a government instrumentality created under R.A. No. 3591 as amended by R.A. No. 9302, conducted examinations of two foreign bank branches in Makati City. In 1977, PDIC found that Citibank, N.A. had received from its New York head office and other foreign branches dollar placements totaling ₱11,923,163,908.00, reflected in its books as “Account-Head Office/Branches-Foreign Currency,” but these were not reported as deposit liabilities subject to PDIC assessment. PDIC assessed Citibank a deficiency premium of ₱1,595,081.96 on March 16, 1978. Likewise, in 1979 PDIC discovered that Bank of America, S.T. & N.A. had from September 30, 1976 to June 30, 1978 received dollar placements of ₱629,311,869.10 recorded as “Due to Head Office/Branches,” leading to a deficiency assessment of ₱109,264.83 by letter datCase Digest (G.R. No. 150128)
Facts:
- Parties
- Petitioner: Philippine Deposit Insurance Corporation (PDIC), a government instrumentality created under Republic Act (R.A.) No. 3591 as amended by R.A. No. 9302, mandated to insure bank deposits.
- Respondents:
- Citibank, N.A. (Citibank), a U.S. banking corporation licensed in the Philippines.
- Bank of America, S.T. & N.A. (BA), a U.S. national banking association licensed in the Philippines.
- Examinations and Assessments
- Citibank (1977 exam)
- From September 30, 1974 to June 30, 1977, received US$11,923,163,908.00 from its head office and foreign branches, evidenced by Certificates of Dollar Time Deposit, interest-bearing and with maturity dates.
- Lodged in Citibank’s books under “Account-Head Office/Branches-Foreign Currency,” not reported as deposit liabilities; PDIC assessed a deficiency premium of ₱1,595,081.96 (letter dated March 16, 1978).
- Bank of America (1979 exam)
- From September 30, 1976 to June 30, 1978, received US$629,311,869.10 from its head office and foreign branches, evidenced by Certificates of Dollar Time Deposit.
- Lodged under “Due to Head Office/Branches,” not reported as deposit liabilities; PDIC sought ₱109,264.83 deficiency premium (letter dated October 9, 1979).
- Judicial Proceedings
- Citibank and BA separately filed petitions for declaratory relief in the Court of First Instance (now Regional Trial Court) of Rizal on July 19, 1979 and December 11, 1979; cases consolidated.
- RTC, Branch 163, Pasig City (Decision June 29, 1998): Held the inter-branch money placements were not “deposits” under Sections 3 and 4 of R.A. No. 3591 or PDIC rules; deficiency assessments improper.
- Court of Appeals (CA) (Decision October 27, 2005): Affirmed RTC, ruling that:
- No separate depositor-depository relationship between head office and branch (one legal entity).
- PDIC’s purpose is to insure third-party deposits in the Philippines, not inter-branch fund transfers.
- Absent local precedent, FDIC practice excludes inter-branch deposits from insurance base.
- Section 3(f), R.A. No. 3591 excludes obligations payable outside the Philippines.
Issues:
- Whether the dollar-denominated placements made by Citibank’s and Bank of America’s head offices and foreign branches with their Philippine branches constitute “insurable deposits” under the PDIC Charter (R.A. No. 3591) and are therefore subject to deficiency premium assessments.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)