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What is the Philippine Deposit Insurance Corporation (PDIC)?

PDIC is a government-owned and controlled corporation created in 1963 by virtue of
Republic Act 3591 for the purpose of insuring bank deposits. The latest amendments
to RA 3591 are contained in RA 9302 enacted on July 27, 2004, which provided
enhanced depositor protection through increased deposit insurance coverage up to
P250,000 and strengthened PDIC's risk management capabilities through the
restoration of PDIC's authority to examine member banks with prior approval by the
Monetary Board. The new law also enhanced PDIC's receivership and liquidation
powers.

The PDIC is an attached agency of the Department of Finance.

What is PDIC’s overall mandate?

To provide depositor protection and strengthen public confidence in the banking
system to foster financial stability.

What are the functions of PDIC?

A. Insurance

The PDIC assesses and collects insurance assessments from member-banks to insure
member-banks’ deposit accounts. In case of bank closures, the PDIC processes
and services claims for insured deposits. Deposits are insured up to a maximum
coverage of P250,000 per depositor.

B. Bank Examination

Under the new law, PDIC's authority to examine its member banks, with prior
approval by the Monetary Board, has been restored.

C. Bank Rehabilitation

The PDIC may grant financial assistance to distressed banks if it is proven to be a less
costly alternative than closure.

D. Receivership of closed banks

Once a bank is ordered closed by the Monetary Board (MB) of the Bangko Sentral ng
Pilipinas, the PDIC is designated as statutory receiver. The PDIC upon receipt of the
MB resolution ordering the closure of a bank, immediately physically takes over the
closed bank. Receivership is the stage within which the PDIC manages the affairs of
the closed bank and preserves its assets for the benefit of creditors.

E. Liquidation of closed banks

After it is determined that the closed bank can not be rehabilitated, the PDIC shall
recommend the liquidation of the assets of the closed bank. Liquidation refers to the

What types of deposits are insured by PDIC? All peso and foreign currency savings deposit accounts. as well as branches and agencies in the Philippines of foreign banks and all other corporations authorized to perform banking functions in the Philippines. rural banks. Deposits in overseas branches of local banks are not insured with PDIC. are not covered by PDIC. What is PDIC’s maximum deposit insurance coverage? The maximum deposit insurance coverage is P250. cooperative banks. But PDIC insurance only covers deposits in banks located in the Philippines. and for other purposes") and Sec. are insured with PDIC. closure by reason of strike or existence of public disorder. after deducting unpaid loans and other obligations of the depositor to the closed bank. revolution or civil war. time deposit accounts. Are the deposits of all banks insured with PDIC? Yes.000 per depositor. current or demand deposit or checking accounts in a bank are insured with PDIC. private development banks. 79 of Central Bank (CB) Circular No. hence. Under the new law. Are all banks members of PDIC? Membership of banks to PDIC is mandatory. In no case shall insured deposit exceed P250. all operating banks are members of PDIC. bank losses due to theft.000 per depositor. Thus. fire. Sec. savings and loan associations. What is an insured deposit? deposit is the net amount due to any depositor for deposits in an insured bank. What specific risks to a bank does PDIC cover? PDIC covers only the risk of bank closure ordered by the Monetary Board. Deposits of all commercial banks. PDIC's power to terminate insured status of banks has been revoked.recovery and conversion of assets into cash for distribution to all creditors in accordance with the order of creditor preference pursuant to law. . savings and mortgage banks. 9 of RA 6426 (‘An act instituting a foreign currency deposit system in the Philippines. All deposit accounts by a depositor in a closed bank maintained in the same right and capacity shall be added together.

Deposits in different banking institutions are insured separately.1389. if you have deposits at the main office and at one or more branch offices of the same bank. mandate that foreign currency deposits shall be insured under the provisions of RA 3591. 1993. dated August 13. the deposits are added together when determining deposit insurance coverage. such that interests are updated. if a bank has one or more branches. savings. the main office and all branch offices are considered as one bank. Insurance premium is paid by the banks. If I have deposits in several different insured banks. Thus. depositors are entitled to receive payment in the same currency in which the insured deposit is denominated. the total of which shall not exceed P250. However. and whenever applicable. not by the depositors. The bank is assessed 1/5 of 1% per annum of the assessment base of the bank as insurance assessment. the outstanding balance of each account is adjusted. withholding taxes are deducted. Shall the depositor pay any insurance premium to PDIC? No. unpaid loans and other obligations of the depositor are deducted. How is insurance coverage determined? In determining the insured amount.000. will my deposits be added together for insurance purposes? No. The type of account (whether checking. and in no case shall insured deposit exceed P250. time or other form of deposit) has no bearing on the amount of insurance coverage. Can PDIC insurance coverage be increased by having several accounts in the same name in an insured bank? No. accounts maintained by a depositor in the same right and capacity are added together. Is there a need for a depositor to file his claim for insured deposit with PDIC? Yes. Deposit insurance coverage is not determined on a per-account basis. Depositors will be advised through the national and/or local media and posters at the premises of the closed insured bank and other public places within the locality on the schedule of claims servicing and the prescriptive date of filing claim. as amended.000. 1389. When should the depositor of a closed insured bank file his claim with PDIC? . Under CB Circular No.

As soon as the pre-settlement examination is completed.00 maximum insurance coverage? .The depositor of the closed insured bank should file a claim for his insured deposits within twenty-four (24) months from date of bank closure. the excess deposits are usually assumed by the rehabilitator. The claim may be filed with the Liquidator of the closed bank. amount in excess of the P250. How long does the pre-settlement examination take? The length of time needed for the pre-settlement examination of deposit liabilities of a closed insured bank largely depends on the completeness and accuracy of records turned over by the Bank to PDIC and the number of deposit accounts to be examined. PDIC shall schedule the servicing of claims. What is the order of priorities for the payment of claims in excess of the P250.000.000 coverage can still be claimed upon the final liquidation of the remaining assets of the closed bank. body or agency.00. if the closed bank is rehabilitated. what happens to the excess of the maximum amount of insured deposit? If the closed bank is not rehabilitated or taken over by another bank. The six-month period shall not apply if the documents of the claimant are incomplete or if the validity of the claim requires the resolution of issues of facts and law by another office. On the average. claims servicing for banks with problematic records starts 2-3 months after takeover by PDIC. What processes are involved before PDIC starts servicing claims? Deposit records are subjected to an examination prior to the start of servicing/settlement of claims. If the deposit account in a closed bank is more than P250.000. idependently or in coordination with PDIC. What happens when the depositor of a closed bank fails to file his claim within the 24-month period? All rights of the depositor with respect to the insured deposit shall no longer be honored but his rights against the closed bank subsists. However. How long does it take PDIC to settle a claim for insured deposit? The claim for insured deposit should be settled within six (6) months from the date of filing but the claim must be filed within twenty-four (24) months after bank closure.

secured credits and trust funds are settled.000. labor claims.00 will be settled together with claims of other ordinary creditors. claims for deposit in excess of the insured P250. . Under the law.The schedule of payment beyond the P250.000. after preferred claims like government taxes.00 maximum insurance shall be based on priorities set by law.