Over ₱1.6 billion in unpaid teacher loan collections are filed by AMA Bank against DepEd in criminal charges

Alleging that the Department of Education (DepEd) and some officials unlawfully withheld more than ₱1.6 billion in loan repayments collected from public school teachers, AMA Rural Bank of Mandaluyong (ARB) has filed a criminal complaint against them with the Office of the Ombudsman.  Prior to this, ARB, a lending organization with DepEd accreditation, offered these loans.

Named as respondents in the ARB complaint were Usec. for Finance Annalyn M. Sevilla, Asec. for Finance Edson Byron K. Sy, Usec. for Legal and Legislative Affairs Filemon Ray L. Javier, and Chief Administrative Officer Cholita F. Tiong. 

According to ARB, DepEd admitted to receiving at least ₱1.015 billion by the end of 2024 after a protracted accounting reconciliation process, with an additional ₱676 million still under scrutiny.  DepEd hasn't sent the funds to ARB, meanwhile, claiming that there are still unresolved legal matters related to the BSP's illegal shutdown of ARB in November 2019.  ARB contends that the Supreme Court and the Court of Appeals have already decided these instances in its favor.

ARB claims that DepEd breaches the Anti-Graft and Corrupt Practices Act by refusing to transfer the money, even after subtracting its 1% service fee.  The bank also asserts that since DepEd was not involved in the BSP-related proceedings and the court decisions in favor of ARB are already final and executory, DepEd cannot use them as a justification for withholding making payments.

The complaint raises more general issues with DepEd's management of payroll remittances and deductions.  According to a 2024 report by the Commission on Audit (COA), DepEd neglected to send ₱3.1 billion in loan installments and GSIS contributions.  COA discovered that DepEd had also neglected to pay ₱5.55 billion in taxes, insurance premiums, and loan payments that were withheld from both teaching and non-teaching employees a year prior.  Recently, DepEd was also embroiled in a controversy about the dubious purchase of antiquated and expensive laptops.

According to ARB, the case is a part of its efforts to recoup assets, compensate depositors, and hold public authorities responsible for mismanaging the bank's finances during the illegal closure that was ordered by the BSP.

The Long Wait for Justice: AMA Bank Depositors Demand Immediate Action from the BSP

Depositors at AMA Rural Bank of Mandaluyong, Inc. ("AMA Bank") have been in limbo and unable to access their hard-earned money for more than five years.  Many of them, especially the elderly, have been pursuing justice nonstop in the hopes of finding a solution that will enable them to get their deposits back.  With every year that goes by, their annoyance only grows as the bank's reopening is still delayed by legal and administrative complications.  Unfortunately, a number of these depositors have died before the resolution they had long fought for was realized.

The Supreme Court's First Division ("SC First Division") issued a Resolution of Even Date ("First SC Resolution") on March 1, 2023, rejecting the SC Petitions of the Philippine Deposit Insurance Corporation ("PDIC") and the Bangko Sentral ng Pilipinas ("BSP"), respectively, and upholding the CA Decision.  This decision required PDIC to return the seized assets and money within five days, and it ordered BSP to reopen AMA Rural Bank.

The Supreme Court En Banc then "with finality" rejected the Motions for Reconsideration of BSP and PDIC in its Resolution dated May 28, 2024 ("Second SC Resolution").  After that, the Supreme Court En Banc issued an Entry of Judgment affirming the CA Decision in CA-G.R. and the First and Second SC Resolutions.  On May 28, 2024, SP No. 163288 became final and executory.  

After this ruling, a group of AMA Bank depositors returned to BSP on March 5, 2025, to voice their concerns.  This visit comes after earlier attempts to get clarification on the status of their deposits, which included a formal letter to BSP officials and a previous meeting.  The BSP's actions contradict its repeated declarations that it is in favor of AMA Bank's reopening.

The second Motion for Reconsideration (M.R.) that the BSP filed with the Supreme Court, which vehemently opposes the reopening of AMA Bank, is the source of the issue. The depositors' worries have only grown as a result of this contradiction. Why continue using legal tactics to block the reopening if BSP actually supports it? This second M.R. was communicated to the depositors.  continues to be considered by the Supreme Court, adding to the ambiguity surrounding their funds.

To make matters worse, PDIC, the Department of Education ("DepEd"), and the BSP itself are denying AMA Bank access to nearly 2 billion pesos in legitimate funds.  Even if AMA Bank were to reopen, it would find it difficult to function efficiently without these funds.  Depositors worry that if a reopening is forced without sufficient funding and the BSP second M.R.  stays pending, AMA Bank would only be subject to contempt of court, which would make matters more complicated.

On November 7, 2019, the BSP issued Monetary Board ("MB") Resolution No. 1705.D ("MB Resolution No. 1705.D"), which ordered the closure and liquidation of AMA Bank, designated PDIC as its receiver, and instructed PDIC to move forward with the takeover and liquidation of AMA Bank. This marked the beginning of the protracted suffering endured by AMA Bank depositors.

Following the Notice of Closure, PDIC implemented MB Resolution No. 1705.D on November 8, 2019, and took over the operations of AMA Bank's Mandaluyong City head office, nine branches, and three (3) other banking offices (OBO) across the nation. PDIC also seized all of the bank's assets, including cash assets, and all of its records and documents.

However, the Court of Appeals granted AMA Bank's CA Petition in its Decision dated 7 September 2020 ("CA Decision"), among other things, by nullifying and annulling MB Resolution No. 1705.D and all actions taken in accordance with it. It also ordered PDIC to (i) return all records, documents, and assets that it had seized from AMA BANK and (ii) to revoke the orders it had issued in order to implement MB Resolution 1705.D.

The Court of Appeals determined that the closure was illegal in this CA Decision and directed the BSP and PDIC to reopen the bank and return the assets that had been seized.  The bank has been closed for over four years in spite of this decision.

When BSP and AMA Bank met on March 5, 2025, BSP's Deputy Governor Atty.  Elmore Capule presented the BSP's position on the matter.  But instead of offering a firm solution or a clear course of action, BSP, via Atty.  Capule requested that the depositors come back in a month.  The depositors were even more disappointed by this response because they had anticipated a more significant update or commitment from the central bank.  The depositors were further irritated by the BSP's failure to release an official statement about the meeting, which left them with more questions than answers.

Now, the depositors are making a direct appeal for BSP to:

1. Withdraw the second motion for reconsideration and allow the Supreme Court’s ruling to take effect without further delay.
2. Use its influence over PDIC, DepEd, and BSP itself to release AMA Bank’s rightful funds, ensuring that the institution can operate once more and fulfill its obligations to its depositors.

Time is no longer a luxury for the elderly depositors who have been waiting for years.  Their demand for justice encompasses fairness, accountability, and respect for due process in addition to monetary reparations.  Now, it is up to BSP to make sure that its words and deeds match and to finally end this protracted financial nightmare.

The AMA Bank depositors are demanding justice that has long been deserved, not just their money back.  Their demand that the BSP take immediate action is more urgent than ever.

After receiving conflicting statements regarding reopening and depositor payments, AMA Bank requests clarification from the BSP

In response to the January 30, 2025, press release from the Bangko Sentral ng Pilipinas (BSP) titled "Statement on AMA Bank Case," AMA Rural Bank of Mandaluyong, Inc. (AMA Bank) requested clarification on the BSP's stance on the bank's reopening and its pending Motion for Reconsideration with the Supreme Court.

In contrast to BSP's own legal filings with the Court of Appeals and the Supreme Court, AMA Bank notes that the BSP's statement claimed that its pending second Motion for Reconsideration “does not prevent AMA Bank from reopening and paying its depositors and creditors.” 

BSP previously contended in its Comment/Opposition submitted to the Court of Appeals that the Supreme Court's pending second Motion for Reconsideration precluded the execution of AMA Bank's Motion for Execution. In addition, BSP claimed in its second Motion for Reconsideration submitted to the Supreme Court that AMA Bank could not be reopened in any way following its closure.

AMA Bank is now formally asking BSP to clarify whether it has given up on its second Motion for Reconsideration with the Supreme Court and its Comment/Opposition to AMA Bank's Motion for Execution with the Court of Appeals, given the apparent discrepancy between BSP's press release and its legal arguments. AMA Bank requests that the BSP formally withdraw these filings if it no longer supports them.

In accordance with the Supreme Court's and the Court of Appeals' final rulings, AMA Bank also wants to know if the BSP press release should be regarded as an official approval for the bank's reopening. If so, AMA Bank asks that the BSP provide written confirmation of this.

To facilitate the bank’s reopening for the sole and limited purpose of repaying its long-suffering depositors, AMA Bank is calling on BSP to take the following actions without further delay:

• Return AMA Bank’s reserve funds amounting to approximately Php135 million;
• Instruct the Philippine Deposit Insurance Corporation (PDIC) to return the bank’s cash assets totaling approximately Php340 million, which were seized under BSP’s now-nullified closure order;
• Advise the Department of Education (DepEd) to promptly release collections from teacher’s loans owed to AMA Bank, amounting to more than Php1.4 billion.

In the interest of its creditors and depositors, who have suffered through extended uncertainty as a result of the bank's closure, AMA Bank reaffirms its dedication to finding a solution to this issue. The bank calls on the BSP to take prompt, sincere action to restore its clients' financial stability and guarantee adherence to court orders.