Banco Filipino v.
Monetary Board the MB and to Central Bank Governor Jose Fernandez;
Resolution
Doctrine: Rule 130e or privileged communications of a public officer. But this is
intended not for the protection of public officers but for the protection of public
interest. Where there is no public interest that would be prejudiced, this invoked rule will
not be applicable.
It has been held that "a party is ordinarily entitled to the production of books, documents
and papers which are material and relevant to the establishment of his cause of action or
defense." "The test to be applied by the trial judge in determining the relevancy of
documents and the sufficiency of their description is one of reasonableness and
practicability"
In passing on a motion for discovery of documents, the courts should be liberal in
determining whether or not documents are relevant to the subject matter of
action. Likewise, "any statute declaring in general terms that official records are
confidential should be liberally construed, to have an implied exception for disclosure
when needed in a court the case of Marbury v. Madison.
Background1 (in the main case not in the resolution): On Jan. 15, 1985, the
Monetary Board (MB) issued a resolution finding Banco Filipino insolvent and
unable to do business without loss to its creditors and depositors. It placed Banco
Filipino under receivership of Carlota Valenzuela, Deputy Governor of the
Central Bank (CB). The MB issued another resolution placing the bank under
liquidation and designating Valenzuela as liquidator. By virtue of her authority as
liquidator, Valenzuela appointed the law firm of Sycip, Salazar, et al. to represent
Banco Filipino in all litigations.
In this case, Banco Fil is questioning the validity of the MB resolutions.
The RTC Makati ordered the Monetary Board (MB) to produce certain
documents dated Feb. 17, 1986. The list of documents asked to be produced,
inspected and copied are the ff:
(1) Copies of tapes and transcripts of the Monetary Board (MB) deliberations on
the closure of Banco Filipino (BF) and its meeting on July 27, 1984, and March
22, 1985;
(2) Copies of the letter and reports of first conservator, Mr. Basilio Estanislao, to
1 Para kunyari binasa yung main case
(3) Papers showing computations of all the interests and penalties charged by the
CB against BF;
(4) Schedule of recommended valuation of reserves per Mr. Tiaoqui’s report
dated March 19, 1995;
(5) Adjustment per Annex "C" of Mr. Tiaoqui’s report;
(6) Annexes "A", "B", and "C" of the joint report of Mr. Tiaoqui, Mr. Aurellano,
and Mrs. Valenzuela;
(7) Schedule of devaluation of CB-premises of Paseo de Roxas of same report;
(8) Schedule of BF’s assets from P5,159.44 B to P3,909.23 B as of January 25,
1985;
(9) Documents listed in BF’s letter to Mr. Carlota Valenzuela dated October 25,
1985
The Trial court allowed the production of the said docs as an additional mode of
discovery as an additional means of preparing for the hearing. It considered the
documents sought to be produced as not privileged because these constitute or
contain evidence material to the issue into by the Court.
MB filed a Petition to Set Aside to Produce Documents dated 17 February 1986
on the grounds, among others that, The tapes and transcripts of the Monetary
Board deliberations are confidential pursuant to Sections 13 and 15 of the Central
Bank Act.
"Sec. 13. Withdrawal of persons having a personal interest. — Whenever any
member attending a meeting of the Monetary Board has a material personal
interest, directly or indirectly, in the discussion or resolution of any given matter,
said member and must retire from the meeting during the deliberation thereon.
The subject matter, when resolved, and the fact that a member had a personal
interest in it, shall be made available to the public. The minutes of the meeting
shall note the withdrawal of the member concerned. (As amended by PD No.
1827).
"Sec. 15. Responsibility. — Any member of the Monetary Board or officer or
employee of the Central Bank who wilfully violates this Act or who is guilty of
gross negligence in the performance of his duties shall be held liable for any loss
or injury suffered by the Bank as a result of such violation or negligence. Similar
responsibility shall apply to the disclosure of any information of a confidential
nature about the discussion or resolutions of the Monetary Board, except as
required in Section 13 of this Act, or about the operation of the Bank, and to the
use of such information for personal gain or to the detriment of the Government,
the Bank or third parties. (As amended by Presidential Decree No. 72).
Banco Filipino opposed the petition on the ff grounds:
1. They were merely annexes to the Supervision and Examination Sector
(SECSII) reports, givent to them pursuant to a SC order.
2. SC indended a full evidence taking when it referred the case to the RTC
Makati.
***3. The respondents cannot claim privilege in refusing to produce the Central
Bank records because it is based only on the generalized interest in
confidentiality. Petitioner cites as a precedent the doctrine established in the case
of U.S. v. Nixon, 418 U.S. 683, 713m which states that "when the ground for
asserting privilege as to subpoenaed materials sought for use in a criminal case is
based only on the generalized interest in confidentiality, it cannot prevail over the
fundamental demands of due process of law."
4. the documents are material and relevant, tending to prove that the bank was
closed without examiner’s reports on financial position, the MB resolution made
to legalize the closure had no supporting examiner’s reports, the reports did not
satisfy Gov. Fernandez that he orderd the examiners and conservator to improve
them, and that the reports were then fabricated.
WN the documents sought to be produced are privileged and thus should not
be made available? NO. The documents are not privileged and that these
constitutes or contain evidence material to the issues being inquired into by
Court. No grave abuse of discretion was committed.
1. The motion for the production of the subject documents was filed by petitioner
pursuant to Section 1, Rule 27, of the Rules of Court. It has been held that "a
party is ordinarily entitled to the production of books, documents and papers
which are material and relevant to the establishment of his cause of action or
defense." "The test to be applied by the trial judge in determining the relevancy
of documents and the sufficiency of their description is one of reasonableness and
practicability"
In passing on a motion for discovery of documents, the courts should be liberal in
determining whether or not documents are relevant to the subject matter of
action. Likewise, "any statute declaring in general terms that official records are
confidential should be liberally construed, to have an implied exception for
disclosure when needed in a court the case of Marbury v. Madison.
2. With respect to the annexes, the court fail to see any proper reason why the
annexes thereto should no withheld. Petitioner cannot adequately study and
properly analyze the report without the corresponding annexes. Pertinent and
relevant, these could be useful and even necessary to the preparation by petitioner
of its comment, objections and exceptions to the Conservator’s reports and
receiver’s reports
3. With respect to the letter and reports of the 1 st conservator, these appear
relevants as petitioner has asserted that the above-named Conservator had in fact
to resume normal operations of Banco Filipino but then he was thereafter
replaced by Mr. Gilberto Teodoro
4. as to the tapes, respondents contend that "it is obvious from the requirement
(Sections 13 and 15 of the Central Bank Act) that the subject matter (of the
deliberations), when resolved . . . shall be made available to the public but the
deliberations themselves are not open to disclosure but are to be kept in
confidence." This Court, however, sees it in a different light. The deliberations
may be confidential but not necessarily absolute and privileged. There is no
specific provision in the Central Bank Act, even in Section 13 and 15 thereof,
which prohibits absolutely the courts from conducting an inquiry on said
deliberations when these are relevant or material to a matter subject of a suit
pending before it. The disclosure is here not intended to obtain information for
personal gain. There is no indication that such disclosure would cause detriment
to the government, to the bank or to third parties. Significantly, it is the bank
itself here that is interested in obtaining what it considers as information useful
and indispensably needed by it to support its position in the matter being inquired
to by the court below
5. Respondents cite sec21, Rule 130e or privileged communications of a public
officer. But this privilege, as this Court notes, is intended not for the protection of
public officers but for the protection of public interest. Where there is no public
interest that would be prejudiced, this invoked rule will not be applicable.
"The rule that a public officer cannot be examined as to communications made to
him in official confidence does not apply when there is nothing to show that the
public interest would suffer by the disclosure question. . . ." In the case at bar, the
respondents have not established that public interest would suffer by the
disclosure of the papers and documents sought by petitioner. Considering that
petitioner bank was already closed as of January 25, 1985, any disclosure of the
aforementioned letters, reports, and transcripts at this time pose no danger or peril
to our economy. Neither will it trigger any bank run nor compromise state secrets.
Respondent’s reason for their resistance to the order of production are tenuous
and specious. If the respondents public officials acted rightfully and prudently in
the performance of their duties, there should be nothing at all that would provoke
fear of disclosure.

On the contrary, public interests will be served by the disclosure of the

documents.