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Deposit Insurer Co-Regulator of Banks Receiver and Liquidator of Closed Banks

The PDIC was created in 1963 to insure bank deposits and promote public confidence in the banking system. The latest amendments to the PDIC charter increased the maximum deposit insurance to 500,000 pesos per depositor. The PDIC determines which deposit products are covered, conducts bank examinations, and may examine deposit accounts of troubled banks. It aims to ensure prompt payment of insured deposits, exercise regulatory supervision, and efficiently manage failed bank receivership and liquidation. The PDIC insures deposits of all commercial and rural banks in the Philippines, except for certain excluded products like investment accounts.

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Lailani Kato
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73 views2 pages

Deposit Insurer Co-Regulator of Banks Receiver and Liquidator of Closed Banks

The PDIC was created in 1963 to insure bank deposits and promote public confidence in the banking system. The latest amendments to the PDIC charter increased the maximum deposit insurance to 500,000 pesos per depositor. The PDIC determines which deposit products are covered, conducts bank examinations, and may examine deposit accounts of troubled banks. It aims to ensure prompt payment of insured deposits, exercise regulatory supervision, and efficiently manage failed bank receivership and liquidation. The PDIC insures deposits of all commercial and rural banks in the Philippines, except for certain excluded products like investment accounts.

Uploaded by

Lailani Kato
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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PDIC is 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. The latest amendments to RA
3591 are contained in RA 9576 signed into law on April 29, 2009. RA 9576 increased the maximum
deposit insurance coverage to P500,000.00. The new law also includes important provisions to ensure
that the PDIC remains financially and institutionally strong to fulfill its mandate under its Charter. The
PDIC now has the authority to determine which deposit products are covered by insurance. The PDIC
is also authorized to conduct independent special examination of banks and may inquire into or
examine deposit accounts of ailing banks in the event there is a finding of unsafe and unsound
banking practices. Part of the financial strengthening measures for the PDIC, on the other hand,
include exemption from taxes and the authority to issue sovereign bonds, debentures and other debt
issuances. The PDIC is an attached agency of the Department of Finance.
The PDICs overall mandate is to provide permanent and continuing 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.
The functions of the PDIC are:

Deposit Insurer
Co-regulator of Banks
Receiver and Liquidator of Closed Banks
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.
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 AntiMoney Laundering Law.
Except for the exclusions stipulated in RA 9576 (stated above), 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.

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