RA 3591 AN ACT ESTABLISHING THE

PHILIPPINE DEPOSIT INSURANCE

CORPORATION, DEFINING ITS POWERS
AND DUTIES AND FOR OTHER
PURPOSES.

Passed on June 22, 1963

RA 6037, RA 7400, PD 1940, RA 9302 and finally
REPUBLIC ACT NO. 9576 (AN ACT INCREASING THE
MAXIMUM DEPOSIT INSURANCE COVERAGE)
 WHAT IS PDIC?

• A government instrumentality created in 1963 by virtue of Republic Act

3591 to insure the deposits of all banks which are entitled to the
benefits of insurance.
• It is an attached agency of the Department of Finance
• Membership of banks to PDIC is mandatory; hence, all operating
banks are members of PDIC.
 MANDATE AND FUNCTION OF PDIC
• 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 and applies efficient management of receivership
and liquidation functions.

• FUNCTION
- Deposit Insurer,
- Receiver and Liquidator of Closed Banks
- Co-regulator of Banks,
 AS DEPOSIT INSURER

• PDIC’s Maximum Deposit 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 (all accounts under
one name in the same bank shall be considered one account only)
• A joint account shall be insured separately from any individually-
owned deposit account.
 INSURED DEPOSIT
• It means the amount due to any depositor for legitimate deposits in an
insured bank as of date of closure, but not to exceed P500,000.00.
• EXCLUDED accounts or transactions: IUUP
a. INVESTMENT products such as bonds, securities and trust
accounts;
b. Deposit accounts which are UNFUNDED, fictitious or fraudulent;
c. Deposit accounts or transactions constituting, and/or emanating
from, UNSAFE and unsound banking practice/s
d. Deposits that are determined to be PROCEEDS of an unlawful
activity as defined under the Anti-Money Laundering Law.
 DEPOSITS COVERED
• 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 (Licensed by the BSP). Except
IUUP
• Subject to the approval of the BOD, 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
 RISKS AND COVERED CLOSED BANKS
• Risks covered= 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.
• Covered closed bank
= the term closed bank refers to a bank placed under liquidation
by the Monetary Board.
=Whenever a bank is ordered closed by the Monetary Board,
PDIC shall be designated as receiver and it shall proceed with the
takeover and liquidation of the closed bank in accordance with
this Act.
 INSURED AMOUNT
• 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 (Deposit insurance coverage is not determined on a
per-account basis. The type of account, whether checking, savings,
time or other form of deposit, has no bearing on the amount of
insurance coverage)
• Unpaid loans and other obligations of the depositor are deducted but
in no case shall insured deposit exceed P500,000.
• Deposits in different banking institutions are insured separately.
However, 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 P500,000.
• Insurance of joint account:
• (1) If the account is held jointly by two or more natural persons, or by
two or more juridical persons, the maximum insured deposit shall be
divided into as many equal shares as there are individuals, juridical
persons or entities
• (2) If the account is held by a juridical person or entity jointly with one
or more natural persons, the maximum insured deposit shall be
presumed to belong entirely to such juridical person or entity:
 WHEN AND HOW TO CLAIM INSURANCE
• 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 distribution of
claim forms by PDIC, receiving of claim forms by PDIC, and the
prescriptive date of filing claims by the depositors
• The depositor of the closed insured bank has 24 months from date of
bank takeover to file his deposit insurance claim
• After 24 months, 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.

• The claim for the uninsured portion of the deposit is a claim against the
assets of the closed bank.
= The claim may be filed with the Liquidator of the closed bank
within sixty (60) days from publication of notice of closure.
However, payment of said claim will depend on the bank’s
available assets and approval of the Liquidation Court.
 AS RECEIVER AND LIQUIDATOR

• What is a receiver?
• The term “receiver” includes a receiver, commission, person or other
agency charged by law with the duty to take charge of the assets and
liabilities of a bank which has been forbidden from doing business in
the Philippines, as well as the duty to gather, preserve and administer
such assets and liabilities for the benefit of the depositors and
creditors of said bank, and to continue into liquidation whenever
authorized under this Act or other laws, and to dispose of the assets
and to wind up the affairs of such bank (as amended by RA 7400).
 POWER AS A RECEIVER

• The PDIC as receiver shall:

• control, manage and administer the affairs of the closed bank.
= Effective immediately upon takeover as receiver of such bank, the
powers, functions and duties, as well as all allowances, remunerations
and perquisites of the directors, officers, and stockholders of such bank
are suspended,
= the relevant provisions of the Articles of Incorporation and By-laws of
the closed bank are likewise deemed suspended.
 POWERS OF PDIC AS RECEIVER

• bring suits to enforce liabilities to or recoveries of the closed bank;

• appoint and hire persons or entities of recognized competence in
banking or finance as its deputies and assistants, to perform such
powers and functions of the Corporation as receiver or liquidator of the
closed bank;
• suspend or terminate the employment of officers and employees of the
closed bank: Provided, That payment of separation pay or benefits shall
be made only after the closed bank has been placed under liquidation;
• pay accrued utilities, rentals and salaries of personnel of the closed
bank, for a period not exceeding three (3) months, from available funds
of the closed bank;
• collect loans and other claims of the closed bank;
• hire or retain private counsels as may be necessary;
• borrow or obtain a loan, or mortgage, pledge or encumber any asset of
the closed bank or to redeem foreclosed assets of the closed bank, or
to minimize losses to the depositors and creditors;
• if the stipulated interest on deposits is unusually high PDIC may
include a reduction of the interest rate to a reasonable rate:.
• exercise such other powers as are inherent and necessary for the
effective discharge of the duties of the Corporation as a receiver.