REPUBLIC OF THE PHILIPPINES

REGIONAL TRIAL COURT

NATIONAL CAPITAL JUDICIAL REGION
MUNTINLUPA CITY
BRANCH _____

UNION BANK OF THE PHILIPPINES,

Plaintiff,
- versus Spouses Abcde and Avery Pretty Arroyo,
Defendant.
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JUDICIAL AFFIDAVIT

I, Borgy Calugay, Filipino, of legal age, single and with residence at 76 P.

Banzon St. Sinagtala Village, BF Homes, Paraaque, after having been duly sworn in
accordance with law, do hereby depose and state that:
Question 1: Why are you here?
Answer: I am here to execute a judicial affidavit as a witness for Unionbank.
Question 2: How are you related to the petitioner in this case?
Answer: I am currently the Assistant Manager for Operations of Unionbank.
Question 3: What are the functions and duties of your position?
Answer: I am in charge of keeping track and collecting unpaid obligations of the bank.
Question 4: Do you know the respondent in this case?
Answer: Yes.
Question 5: How do you know the respondent?
Answer: They are clients of the bank who maintains a savings account with the bank.
They also obtained a loan from us.
Question 6: How much was their loan?
Answer: P60M.
Question 7: When was this loan contracted/ obtained?
Answer: February 14, 2001.
Question 8: What is your proof of said loan?
Answer: The Promissory note that was executed by the spouses in favor of the bank.
Question 9: I am showing you a document, is this the same promissory note executed
by the spouses?
Answer: Yes.
Question 10: What are the principal terms of the loan agreement?
Answer: It has a 12% annual interest payable within 15 years, with an installment to
be payable at Php 333,333 per month. It further provides that in case the obligee fails
to pay any of the sums secured, the bank has the right to declare the entire obligation
due and payable and to foreclose the mortgage.

Question 11: What are the conditions/ requirement of your bank when obtaining a
loan?
Answer: When loans in large amount are obtained, the Bank requires that the loan be
secured or the client gives a security.
Question 12: What security did respondent execute in this case?
Answer: The spouses executed two real estate mortgages.
Question 13: During the period of this loan agreement, what happened to the
installment agreed upon between the respondent and Union Bank?
Answer: The spouses were able to pay the monthly installment until February of 2011.
Question 14: How are the payments made?
Answer: Through an agreement they made with the bank to automatically debit said
amount from their Savings Account.
Question 15: You said they were able to pay the monthly installment until February
2011, what happened after that?
Answer: The spouses failed to pay the monthly installment due for the next month.
Question 16: What did the bank do when respondent failed to pay on said date?
Answer: On March 2011, we informed them through a letter regarding their failure to
pay the installment for that month.
Question 17: What was respondents reply after you sent the letter?
Answer: They requested for an extension of 3 months to pay their outstanding
obligation.
Question 18: What happened after 3 months?
Answer: The spouses were still not able to pay, thus we sent them a formal demand
letter giving them additional 30 days to settle the entire amount due in consonance
with the acceleration clause stipulated in the loan agreement.
Question 19: What did the respondent do after you sent the demand letter?
Answer: They did not do anything even after the expiration of the 30 days given to
them.
Question 20: What did the bank do after?
Answer: The Bank foreclosed the property subject of the Real Estate Mortgage
executed by the spouses.
Question 21: When did the bank foreclosed the property?
Answer: On August 17, 2011.
Question 22: What happened to the property during foreclosure?
Answer: The property was sold to the highest bidder.
Question 23: Who was the highest bidder?
Answer: Unionbank.
Question 24: How much was the property sold?
Answer: Php 20M.
Question 25: How did you come up with that amount?
Answer: We based the bid price from the policy of the bank.
Question 26: What is your bank policy regarding public auction?
Answer: It is our banks policy that in public auctions, the basis of our bid price is
either the total exposure or 80% of the total appraised value of the property,
whichever is lower.

Question 27: What policy did you apply in this case?

Answer: We used the 80% of the total appraised value of the said property or Php 20M.
Question 28: Why did you choose that option?
Answer: Based on our computation, that option is lower.
Question 29: What is your proof that that option was lower?
Answer: We have a statement of Bank Expenses which shows the computation we
made to determine which of the policies will have a lower value.
Question 30: Im showing you a document, is this the same Statement of bank
expenses that you said?
Answer: Yes, its the same document.
Question 31: After the foreclosure, what happened to the loan?
Answer: We applied the bid price to the balance of the loan as well as the interests
that accrued.
Question 32: After the application of the bid price, what happened to the loan?
Answer: There was still a deficiency in the amount of Php 12M plus interest.
Question 33: Why is still there a deficiency?
Answer: Because based on our computation after we applied the bid price to the loan
and the interest, there was still a balance left that was not covered by said bid price.
Question 34: When you found out that there was a deficiency, what did the bank do?
Answer: We waited for the spouses to redeem the foreclosed property.
Question 35: What happened next?
Answer: They failed to redeem it within one year from registration of the sale with
the register of deeds.
Question 36: What did the bank do when the spouses failed to redeem within said
period?
Answer: After the expiration of the period for the right of redemption, there being no
redemption made, we sent an extrajudicial demand to the spouses to collect the
deficiency within 60 days plus interest.
Question 37: What did the respondent do when you sent the demand letter for
deficiency?
Answer: They did not pay the deficiency and ignored the letter.
Question 38: What did the bank do when the respondent did not pay/ignored the
demand?
Answer: The Bank filed a complaint for the collection of the deficiency of the
mortgaged obligation.