RC- Al Khwarizmi International College

DEPARTMENT OF ACCOUNTANCY
Marawi City, 9700

LAW

PHILIPPINE DEPOSIT INSURANCE CORPORATION

Created by RA 3591, as amended, to insure the deposits of all banks which are entitled to the benefits of
insurance
PDIC exists to provide deposit insurance coverage for the depositing public to help promote public
confidence and stability in the economy. It ensures prompt payment of insured deposits exercise
complementary supervision of banks, adopt responsive resolution methods, and applies efficient
management of receivership and liquidation functions.

NOTE:
PDIC covers only the risk of a bank closure order by the Monetary Board. (e.g. because of insolvency)
Thus, bank losses to the theft, fire, closure by reason of strike or existence of public disorder, revolution
or civil war, are not covered by PDIC.

Maximum Deposit Insurance Coverage (MDIC)

PDIC shall pay deposit insurance on all valid deposits up to the Maximum Deposit Insurance Coverage
of Php500,000, per depositor, of a closed bank. Accounts maintained in the same right and capacity for a
depositor’s benefit, whether in his own name or in the name of others, are covered by deposit insurance.
Deposits are considered valid upon the determination by the PDIC, based on bank records, that the deposits
were made with a corresponding inflow of cash.

Insured Deposit
The amount due to any bonafide depositor for legitimate deposits in an insured bank as of the date of
closure but not to exceed Five hundred thousand pesos (Php500,000.00).
No owner or holder of any passbook, certificate of deposit, or other evidence of deposit shall be recognize
as a depositor entitled to the rights under the PDIC charter unless the passbook, certificate of deposit, or
other evidence of deposit is determined by the PDIC to be an authentic document or record of the issuing
bank.
In determining such amount due to any depositor, there shall be added together all deposits in the bank
maintained in the same right and capacity for his or her benefit either in his or her name or in the name of
others.

NOTE:
If a bank has one or more branches, the main office and all branch offices are considered as one bank.
Thus, if you have deposits at the main office and at one or more branch offices of the same bank, the
deposits are added together when determining deposit insurance coverage, the total of which shall not
exceed Php500,000.00.

Single Accounts
are individually-owned accounts or accounts held under one name, either as natural person or juridical
entity.

Prepared by: MACA-UMBOS, Aiza S. PDIC Law (BL33)|1 of 3

 RC- Al Khwarizmi International College
DEPARTMENT OF ACCOUNTANCY
Marawi City, 9700

Joint Accounts
A joint account regardless of whether the conjunction “and”, “or” or “and/or” is used shall be insured
separately from any individually-owned deposit account. The maximum insured deposit shall be divided
into as many equal shares as there are account holder, unless a different sharing is stipulated in the
document of deposit.
Joint accounts held in the names of a juridical entity and a natural person shall be presumed to belong
solely to the juridical entity.
The aggregate interest of each co–owner over several joint accounts, whether owned by the same or
different combinations of individuals, juridical persons or entities, shall be subject to the maximum
insured deposit of Php500,000.00

When should the depositor of a closed bank file his deposit insurance claim with the PDIC?
Depositors have two (2) years from the date of bank takeover. Otherwise, all rights of the depositor with
respect to the insured deposit shall no longer be honored. But he may still make a claim against the assets
of the closed bank.

Filling of Claims with PDIC

For account holders with a total deposit amount of not more than Php100,000.00, there is an automatic
payment by mail. PDIC sends the check to by email, in cooperation with the Philippine Postal Office.
Provided that they:

I. Have no obligation with the closed bank, or have not acted as co–makers of these obligations, or
are not spouses of the borrowers;
II. Have complete mailing address found in the bank records or have updated their addresses through
the Mailing Address Update Form (MAUF) of PDIC before the start of the onsite claims settlement
operation; and
III. Have not maintained the account under the name of business entities

For account holder of more than Php100,000.00, claims must be filed during the onsite Claims Settlement
Operations (CSO) period, as announced in the Noticed to Depositors published in national or local
newspapers, or posted in the bank premises and conspicuous places within the locality, and in the PDIC
website. Depositor who failed to file their claims during the onsite CSO may do so personally or through
mail by sending a duly accomplished and notarized Claim Form.

Requirements in Filling Claims

Original Evidence of Deposit
TWO (2) VALID PHOTO-BEARING IDENTIFICATION DOCUMENTS (IDs) with clear signature
of depositor/claimant
If the depositor is below 18 years old, a photocopy of his/her birth certificate from the National Statistics
Office (NSO) or duly certified copy from the local civil registrar and valid IDs of the parent.
Original copy of a notarized Special Power of Attorney (SPA) for claimants who are not the signatories
in the bank records. In the case of minor depositor, the SPA must be executed by the parent.

Prepared by: MACA-UMBOS, Aiza S. PDIC Law (BL33)|2 of 3

 RC- Al Khwarizmi International College
DEPARTMENT OF ACCOUNTANCY
Marawi City, 9700

Allah does not burden a soul beyond that it can bear – Qur’an 2:286

NAME: DATE:
SUBJECT: BL33 (Law of Negotiable Instrument SCORE: /20

QUIZ: Answer the following.

1. In your own words what is PDIC? (3 pts.)

2. What Banks are covered by PDIC? (3 pts.)

3. What is the mode of payment of the insured deposits? (3 pts.)

4. The couple Kathryn Bernardo and Daniel Padilla have the following account balances with Security Bank:

Kathryn Bernardo Php500,000.00

Daniel Padilla Php500,000.00
Kathryn Bernardo and/or Daniel Padilla Php500,000.00

How much can Kathryn Bernardo recover from PDIC? (5 pts.)

5. The bank records of China Bank show the following joint accounts and their balances:

Jennie and/or Jisoo Php500,000.00

Jennie and/or Rose Php500,000.00
Jennie and/or Lisa Php500,000.00

Is each account insured? (1 pts.)

How much can Jennie recover from PDIC? (5 pts.)

Prepared by: MACA-UMBOS, Aiza S. PDIC Law (BL33)|3 of 3