Professional Elective 2

• Philippine Deposit Insurance Corporation (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.
• R.A 10846 in 2015 and R.A 11840 in 2022 both empowered PDIC with stronger authorities to protect the depositing public and promote financial stability.
• PDIC promotes and safeguards the interests of the depositing public by providing insurance coverage on all insured deposits and helping maintain a sound and stable banking system.
• The PDIC Board is composed of the Governor of BSP; the Secretary of Finance; who both serve without compensation, and coterminous with the President of the Philippines or upon his pleasure; the President and CEO of PDIC who is appointed by the President of the Philippines to serve on a full-time basis for a term of 6 years; and 4 other members of the Board from the private sector who shall be appointed by the President of the Philippines to serve for 6 years.
• Effective June 2009, PDIC provides a maximum deposit insurance coverage of PhP 500,000 per depositor per bank.
• PDIC insurance coverage covers all types of bank deposits in banks whether denominated in local or foreign currencies.
• The type of account (whether checking, savings, time or other form of deposit) has no bearing on the amount of insurance coverage.
• PDIC insurance coverage is not determined on a per-bank branch basis.
• The maximum insurance is P500k per depositor per bank.
• In case of joint deposits, the maximum insurance benefit shall be divided equally among the joint depositors unless a different sharing scheme is agreed upon by the parties.
• If your account balance is just Php100,000.00 and below, you are not required to file claims provided that yours is an individual account and not a business account, you have no obligations with the closed bank, and you have complete and updated addresses in the bank records or have updated these through the Mailing Address Update Form (MAUF) issued by the PDIC.
• These valid accounts are eligible for early payment through postal money orders or checks to be sent via registered mail or courier services.
• The presence of four (4) members of the Board shall already constitute a quorum in the PDIC.
• If upon examination by the PDIC, the bank is proven to have committed, or is committing, or is about to commit unsafe or unsound banking practice, and it failed to comply with the cease and desist order issued by the BSP within 30 days from notice, the PDIC may terminate the insured status of the bank.
• In-Trust-For (ITF) Account is also considered a Single Account.
• The affected deposits shall continue to be insured by PDIC for a period of 180 days only, but additional deposits made after the effective date of termination are no longer insured.
• The Board of Directors of the PDIC shall review every 3 years the said maximum amount of insurance coverage and may increase it when necessary, in consultation with various actuarial experts and consultants.
• The owner of an ITF Account is the Principal Depositor.
• An example of unsafe and unsound banking practice is if the bank invests the deposits to unregistered business or to business entities that are tagged or linked with terroristic or anti-money laundering activities.
• All decisions of the Board of Directors in the PDIC require the concurrence of at least four (4) members of the Board.
• The Board of Directors of the PDIC may increase the maximum amount of insurance coverage to an amount indexed to inflation or in consideration of other economic indicators.
• Postal money orders or checks amounting to Php15,000.00 and below may be encashed in any of the local post offices or branches of the Land Bank of the Philippines (LBP).
• PDIC insurance is paid out of the Deposit Insurance Fund (DIF), which is maintained through the payment of premiums by each bank.
• Maximum Deposit Insurance Coverage (MDIC) is P500,000.00 per depositor per bank, regardless of type of currency.
• Deposits that are determined to be the proceeds of an unlawful activity as defined under Republic Act No 9160, as amended.
• In all instances, the aggrieved depositor is given a period of two (2) years from the time PDIC took over the closed bank, for purposes of bank depositors’ insurance coverage, within which to file their insurance claims.
• A joint account, regardless of whether the conjunction “and”, “or”, or “and/or” is used, shall be insured separately from an individually-owned deposit account.
• Deposit accounts or transactions which are unfunded, or that are fictitious or fraudulent;
• The petition for certiorari may only be filed within thirty (30) days from notice of denial of claim for deposit insurance.
• The semi-annual assessment is not less than P5,000.00 on all banks.
• If the account is jointly owned by a juridical person and a natural person, the proceeds of the insurance coverage are presumed to belong entirely to the juridical person.
• All deposit accounts, regardless of type, of a depositor in a closed bank maintained in the same right and capacity shall be added together.
• To build-up DIF, the PDIC makes regular assessments of banks at an annual rate of 1/5 of 1% of their total deposit liabilities.
• The premium each bank pays is based on the size of its deposits and the level of risk the bank poses.
• PDIC shall not pay deposit insurance for the following accounts or transactions, whether denominated, documented, recorded or booked as deposit by the bank:
• Investment products such as bonds and securities, trust accounts, and other similar instruments;
• The actions of the PDIC shall be final and executory, and may not be restrained or set aside by the court, except on appropriate petition for certiorari on the ground that the action was taken in excess of jurisdiction or with such grave abuse of discretion as to amount to a lack or excess of jurisdiction.
• Bigger banks with larger volumes of clients, assets and deposits are obligated to pay higher premiums to DIF.
• Deposit accounts or transactions constituting, and/or emanating from, unsafe and unsound banking practice/s, as determined by the Corporation, in consultation with the BSP, after due notice and hearing, and publication of a cease and desist order issued by the BSP against such deposit accounts or transactions; and
• A joint account shall be insured separately from any individually-owned deposit account & also enjoys maximum insurance coverage of P500,000.00.