PHILIPPINE DEPOSIT INSURANCE CORPORATION (PDIC) LAW

R.A. No. 3591

An Act Establishing the Philippine Deposit Corporation to effectively fulfill its vital
Insurance Corporation, Defining its Powers task.
and Duties and for Other Purposes
“In view of the crucial role and the nature
* All banks are included. It is mandatory for of its functions and responsibilities, the
banks to insure their deposits with, and Corporation, while being a government
pay premium to, the PDIC. instrumentality with corporate powers,
shall enjoy fiscal and administrative
Sec. 1(1), PDIC Charter autonomy.”
-​ To create the Philippine Deposit
Insurance Corporation which shall PDIC Board of Directors
insure the deposit of all banks Sec. 3(a), PDIC Chapter
which are entitled to the benefits ●​ Secretary of Finance: ex officio
of insurance under the law, which Chairman of the Board
shall have the powers hereinafter ●​ Governor of the Bangko Sentral ng
granted. Pilipinas: ex officio member
●​ President of the Corporation:
* deposits in the bank are insured up to a appointed by the Philippine
certain extent President
* PDIC: insurer—provides the insurance ●​ Four (4) members of the private
coverage sector: appointed by the Philippine
President
Basic Policy as per Sec. 1(2)
-​ shall promote and safeguard the Qualifications
interests of the depositing public ●​ Of good moral character
by providing insurance coverage on ●​ Of unquestionable integrity and
all insured deposits responsibility
-​ help maintain a sound and stable ●​ Of known probity and patriotism
banking system ●​ Of recognized competence in
economics, banking and finance,
State Policy as per Sec. 2 law, management administration or
-​ to strengthen the mandatory insurance; and
deposit insurance coverage system ●​ At least 35 years of age.
-​ to generate, preserve, maintain
faith and confidence in the Functions
country’s banking system ●​ Insurer of bank deposits
-​ to protect it from illegal schemes ○​ Covers only the risk of a
and machinations bank closure ordered by the
* The government must extend all means Monetary Board.
and mechanisms necessary for the
 ○​ Bank losses due to theft, ■​ does not require
fire, closure by reason of prior consent of the
strike or existence of public MB because (1) time
disorder, revolution or civil is of the essence; (2)
war are not covered by based on the reports
PDIC. of an examination
●​ Co-regulator of banks which already had an
○​ Power to conduct approval from the
examinations of bank w MB; (3) lengthy
prior approval of the MB process provide
○​ No examination can be unscrupulous
conducted w/in 12 months individuals the
of the last exam date. opportunity to cover
○​ Examinations: evaluation of their tracks
the current status of the ●​ Receiver and Liquidator of closed
bank and determination of banks
its compliance w the set ○​ shall control, manage, and
standards (solvency, administer the affairs of the
liquidity, asset valuation, closed bank
operations, systems, ○​ Power to collect loans and
management, compliance w other claims of the closed
banking laws, rules, and bank
regulations) ○​ Modify, compromise, or
■​ Involves an intrusion restructure the terms and
into a bank record. conditions of such loans or
■​ requires prior claims as may be deemed
consent of the MB advantageous to the
○​ Investigation: conducted interest of the creditors
based on specific findings and claimants of the closed
on certain acts or omissions bank
which are subject of a ○​ Liability of the banks for
complaint or a Final Report deposits and all other
of Examination made by the obligations as of closure
PDIC shall cease upon closure by
■​ does not involve a the MB.
general valuation of
the status of a bank Sec. 9(9), PDIC Charter
■​ zeroes in on specific ○​ As a corporate body shall
acts and omissions have the power to act as
uncovered via an receiver
evaluation ○​ Receiver: appointed to
■​ requires a less manage a bank or
invasive assessment quasi-bank for the purpose
of recommending the
 rehabilitation/liquidation of -​ Investment products (bonds,
the bank in question securities, trust accounts, and other
similar instruments)
Sec. 12, PDIC Charter -​ Unfunded, fictitious, fraudulent
○​ Bank ordered closed by the -​ constituting and/or emanating from
MB: the PDIC shall be unsafe and unsound banking
designated as receiver and practices, as determined by the
shall takeover and liquidate PDIC, in consultation with the BSP,
the closed bank after due notice and hearing, and
○​ Rehabilitation: cannot be publication of a cease and desist
recommended if the bank order issued by PDIC
was ordered closed by the -​ proceeds of an unlawful activity as
MB even if the revival is defined under RA No. 9160
possible [Anti-Money Laundering Act]
-​ Safety Deposit Boxes (as per the
Insurable Deposits PDIC website)
Sec. 5(g), PDIC Charter
-​ “Deposit” means the unpaid Insured Deposit
balance of money or its equivalent Sec. 5(j), PDIC Charter
received by a bank in the usual -​ Amount due to any bona fide
course of business and for which it depositor for legitimate deposits in
has given or is obliged to give credit an insured bank net of any
to a commercial, checking, savings, obligation of the depositor to the
time or thrift account. insured bank as of date of closure
-​ Any obligation of a bank which is -​ Not to exceed FIVE HUNDRED
payable at the office of the bank THOUSAND PESOS (P500,000)
located outside of the Philippines -​ Claim for the uninsured
shall not be a deposit for any of the portion of the deposit is a
purposes of this Act or included as claim against the assets of
part of the total deposit or of the closed bank.
insured deposits. -​ Mode of payment: cash or by
-​ payable only at the office outside = making available to each
excluded depositor a transferred
-​ Any insured bank which is deposit in another insured
incorporated under the laws of the bank in an amount equal to
Philippines which maintains a the insured deposit
branch outside the Philippines = -​ per bank, not per bank account,
subject to the approval of the regardless of which branch the
BODs, may elect to include for account belongs
insurance its deposit obligations Example:
payable only at such branch. BDO — Branch 1: P300K
BDO — Branch 2: P400K
Not Insurable Deposits BPI — Branch 1: P250K
Sec. 5(f), PDIC Charter BPI — Branch 2: P550K
Both banks were closed by the Monetary * 450K — Security Bank (Savings)
Board. * 600K — Security Bank (Joint Account w/
Toni)
Insured Deposits:
BDO: P500K ; BPI: P500K The Security Bank was ordered closed by
the Monetary Board.
Rules of Joint Accounts
-​ Regardless of whether the Insured Deposits:
conjunction “and’, “or’, or T: P300K (Savings); P300K (JA w/ K)
“and/or” is used shall be insured JA w/ X, Co. is not included.
separately from any K: P500 (C & S); P300K (JA w/ T)
individually-owned deposit account.
-​ Maximum insured deposit shall be Splitting of Deposits
divided into as many equal shares Riguera citing Sec. 21(f)(5) of the PDIC
as there are account holders, Charter
unless a different sharing is -​ Deposit account w an outstanding
stipulated in the document of balance of > P500K maintained
deposit. under the name of natural or
-​ Juridical person/entity & one or juridical persons is broken down
more natural persons: maximum and transferred into two or more
insured deposit shall be presumed accounts in the name(s) of natural
to belong entirely to such juridical or juridical persons or entities who
person/entity. have no beneficial ownership on
-​ Natural persons may submit a proof transferred deposits in their names
that they have contributed. If w/in 120 days immediately
denied by PDIC, demand from the preceding a closure order issued by
juridical entity/persons. the MB [for the purpose of availing
-​ Aggregate interest of each the maximum deposit insurance
co-owner over several joint coverage] or during a bank-declared
accounts (same or different holiday.
combinations of individuals, -​ Punishable by law.
juridical persons/entities) shall be -​ Ililipat deposit para masulit ‘yung
subject to the maximum insured P500K
deposit OVER ALL.
Example: Proof of Depositor
TONI: -​ owner/holder of any passbook, cert
* P300K — Security Bank (Savings) of deposit, or other evidence of
* P600K — Security Bank (Joint Account w/ deposit shall not be recognized as
Kristina) a depositor entitled to the rights
* P300K — Security Bank (joint Account w/ under the charter unless the
X, Co.) document is verified by the PDIC.

KRISTINA: Filing of Claim

* 300K — Security Bank (Checking)
 -​ Filed during the onsite Claims
Settlement Operations (CSO) period
●​ Announced in the Notice to
Depositors published in
national/local newspapers or
posted in the bank premises
and conspicuous places w/in
the locality, and in the PDIC
website.
-​ Failure to file during the onsite may
do so through personal filing/filing
through mail w the PDIC
-​ Should be filed w/in 2 years from
the PDIC’s takeover of the closed
bank
-​ Deposit is barred if no claims were
filed after two years.

Depositors NOT REQUIRED file claims

●​ Deposit accounts w balances of
P100K and below
○​ No outstanding obligations
w the closed bank/have not
acted as co-makers of these
obligations/are not spouses
of the borrowers
○​ Have complete mailing
address found in the bank
record/updated through
Mailing Address Update Form
(MAUF) or PDIC before the
start of the onsite claims
settlement operation
○​ Have not maintained the
account under the name of
business entities
●​ Postal Money Orders are sent to
the depositors