TITLE: Busuego vs.

CA
REFERENCE: [304 SCRA 473 (March 11 1999)]
TOPIC: Qualifications ; Power of Monetory Board

FACTS
The 16th regular examination of the books and records of PAL Employees Savings and Loan
Association (PESALA) was conducted by a team of CB (Central Bank) Examiners. Several irregularities were
found to have been committed by the PESALA officers:
1. Questionable investment In a multi-million peso real estate project (Pesalaville);
2. Conflict of interest in the conduct of business;
3. Unwarranted declaration and payment of dividends;

4. Commission of unsound and unsafe business practices.

Hence, CB sent a letter to petitioners for them to be present at a meeting specifically for the purpose of
investigating said anomalies. Petitioners did not respond. Hence, the Monetary Board adopted a resolution
including the names of the officers of PESALA in the watchlist to prevent them from holding responsible
positions in any institution under CB supervision.
Petitioners filed a petition for injunction against the MB in order to prevent their names from being
added in the said watchlist. RTC issued the TRO. The MB appealed to the CA which reversed RTC. Hence,
this petition for certiorari with the SC.
Petitioners contend that the MB resolution was null and void for being violative of their right to due
process by imposing administrative sanctions where the MB is not vested with authority to disqualify persons
from occupying positions in institutions under the supervision of CB.

ISSUE
Whether or not the MB resolution was null and void?

RULING
(Mao ra ni ang ruling na related sa topic under banking.)
NO.
The CB, through the MB, is the government agency charged with the responsibility of administering the
monetary, banking and credit system of the country and is granted the power of supervision and examination over
banks and non-bank financial institutions performing quasi-banking functions of which savings and loan associations,
such as PESALA, form part of.
The special law governing savings and loan associations is R.A. 3779, the Savings and Loan Association
Act. Said law authorizes the MB to conduct regular yearly examinations of the books and records of savings and
loan associations, to suspend a savings and loan association for violation of law, to decide any controversy over the
obligations and duties of directors and officers, and to take remedial measures. Hence, the CB, through the MB, is
empowered to conduct investigations and examine the records of savings and loan associations. If any irregularity is
discovered in the process, the MB may impose appropriate sanctions, such as suspending the offender from holding
office or from being employed with the CB, or placing the names of the offenders in a watchlist.
Monetary Board, is empowered to conduct investigations and examine the records of savings and loan
associations. If any irregularity is discovered in the process, the Monetary Board may impose appropriate sanctions,
such as suspending the offender from holding office or from being employed with the Central Bank, or placing the
names of the offenders in a watchlist.

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