A.

Research and study PDIC

https://www.pdic.gov.ph/faqs-19
The Philippine Deposit Insurance Corporation is a Philippine government-run deposit insurance fund. It was
established on June 22, 1963 by Republic Act 3591. It guarantees deposits up to ₱500,000. The primary function of PDIC
is to protect small investors/depositors and build strong confidence in banking.

What is PDIC’s overall mandate?

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, exercises complementary supervision of banks, adopts responsive resolution
methods, and applies efficient management of receivership and liquidation functions.
What are the functions of PDIC?
 Deposit Insurer

 Liquidator of Closed Banks

What is PDIC’s maximum deposit insurance coverage?
Effective June 1, 2009, the maximum deposit insurance coverage is P500,000 per depositor. All deposit accounts by a depositor in a
closed bank maintained in the same right and capacity shall be added together.

Under R.A. No. 9576, the PDIC may propose to adjust the MDIC, subject to the approval of the President of the Philippines, in case of a
condition that threatens the monetary and financial stability of the banking system that may have systemic consequences.
What is an insured deposit?
The term ‘insured deposit’ means the amount due to any bona fide depositor for legitimate deposits in an insured bank net of any
obligation of the depositor to the insured bank as of date of closure, but not to exceed P500,000.00.

A joint account shall be insured separately from any individually-owned deposit account.

R.A. No. 9576 stipulates that PDIC will not pay deposit insurance for the following accounts or transactions:

1. Investment products such as bonds, securities and trust accounts;

2. Deposit accounts which are unfunded, fictitious or fraudulent;
3. Deposit products constituting or emanating from unsafe and unsound banking practices;
4. Deposits that are determined to be proceeds of an unlawful activity as defined under the Anti-Money Laundering Law.

Are all banks members of PDIC?

Membership of banks to PDIC is mandatory; hence, all operating banks are members of PDIC.

What specific risks to a bank does PDIC cover?

PDIC covers only the risk of a bank closure ordered by the Monetary Board. Thus, bank losses due to theft, fire, closure by reason of
strike or existence of public disorder, revolution or civil war, are not covered by PDIC.
What types of deposits are insured by PDIC?
Except for the exclusions stipulated in RA 9576, deposits of all commercial banks, savings and mortgage banks, rural banks, private
development banks, cooperative banks, savings and loan associations, as well as branches and agencies in the Philippines of foreign
banks and all other corporations authorized to perform banking functions in the Philippines, are insured with PDIC. As for Philippine
banks with branches outside the country, RA 9576 stipulates that subject to the approval of the Board of Directors, any insured bank with
branch outside the Philippines may elect to include for insurance its deposit obligations payable at such branch.

Foreign currency deposits are also insured by PDIC pursuant to RA 6426 (“An act instituting a foreign currency deposit system in the
Philippines, and for other purposes”) and Central Bank (CB) Circular No. 1389. Depositors may receive payment in the same currency in
which the insured deposit is denominated.

Exclusions from deposit insurance coverage as stipulated in R.A. No. 9576:

1. Investment products such as bonds, securities and trust accounts;

2. Deposit accounts which are unfunded, fictitious or fraudulent;
 3. Deposit products constituting or emanating from unsafe and unsound banking practices;
4. Deposits that are determined to be proceeds of an unlawful activity as defined under the Anti-Money Laundering Law.

How is insurance coverage determined?

In determining the insured amount, the outstanding balance of each account is adjusted, such that interests are updated, withholding taxes
are deducted, accounts maintained by a depositor in the same right and capacity are added together; and whenever applicable, unpaid
loans and other obligations of the depositor are deducted; and in no case shall insured deposit exceed P500,000.

R.A. No. 9576 stipulates that PDIC will not pay deposit insurance for the following accounts or transactions:

1. Investment products such as bonds, securities and trust accounts;

2. Deposit accounts which are unfunded, fictitious or fraudulent;
3. Deposit products constituting or emanating from unsafe and unsound banking practices;
4. Deposits that are determined to be proceeds of an unlawful activity as defined under the Anti-Money Laundering Law.

How long does it take PDIC to settle a claim for insured deposit?
PDIC aims to pay valid claims as soon as possible. Prior to payout, claims are examined thoroughly. This is to protect the Deposit
Insurance Fund (DIF) which is the source of insurance payments. Sometimes, depositors mistakenly assume that the payouts are sourced
from their deposits. This is not the case. The payouts are from PDIC’s own funds.

The claim for insured deposit should be settled within six (6) months from the date of filing provided all requirements are met but the
claim must be filed within twenty-four (24) months after bank takeover. 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, body or agency,
independently or in coordination with PDIC.
B. What is the role of PDIC and BSP in the growth of our economy?
As the government financial institution mandated to protect deposits, the PDIC is actively helping
other financial regulators find ways to strengthen the Philippine banking system. Strong banks help
spur economic development. Strong banks are less prone to closures and pose les risk to depositors.
The primary objective of the Bangko Sentral ng Pilipinas is to promote price and financial stability
conducive to balanced and sustainable economic growth. It also seeks to maintain monetary
stability and the convertibility of the peso. The BSP's main responsibility is to formulate and
implement policy in the areas of money, banking and credit with the primary objective of
preserving price stability.