Law

• Philippine Deposit Insurance Corporation (PDIC)


  Provides deposit insurance coverage for the depositing public to help promote public confidence and stability in the economy
• Purpose of PDIC


  To protect depositors from losses caused by banks, if these banks are not able to pay their depositors, the deposit insurance will cover it up
• PDIC coverage


  • It covers only the risk of a bank closure ordered by the Monetary Board, e.g. the insolvency of the bank
• Premiums for this insurance are not being paid by the depositors but by the banks
• Functions of PDIC


  • Safeguard
  • Investigate
  • Liquidate
• PDIC as deposit insurer


  • Shall promote and safeguard the interests of the depositing public by providing permanent and continuing insurance coverage on all insured deposits
• PDIC as co-regulator of banks


  • Conducts offsite and onsite monitoring of banks to ensure they are managed well and not conducting business in an unsafe and unsound manner
  • Assists in strengthening banks through bank strengthening activities and financial assistance
• PDIC as receiver and liquidator of closed banks

  • Shall take over banks ordered closed by the Monetary Board
  • Administers closed banks' assets, records, and affairs, and preserves and disposes these assets for the benefit of the creditors and uninsured depositors
• All banks are covered by PDIC, it is mandatory for banks to insure their deposits with, and pay premiums to, the PDIC
• Maximum Deposit Insurance Coverage (MDIC)

  P500,000, previously it was only up to 250,000 per depositor
• Uninsured portion of the deposit


  The claim for the uninsured portion of the deposit is a claim against the assets of the closed banks
• Insured deposit


  The amount due to any bona fide depositor for legitimate deposits in an insured bank as of the date of closure but not to exceed P500,000
• No owner/holder of any passbook, certificate of deposit, or other evidence of deposit shall be recognized as a depositor entitled to the rights under the PDIC charter unless it was determined to be an authentic document or record of the issuing bank
• Multiple bank accounts in the same bank or its branches

  • There shall be added together all deposits in the bank maintained in the same right and capacity for his or her benefit either in his or her name or in the name of others
  • If a bank has one or more branches, the main office and all branches are considered as one bank, thus the insured deposit shall not exceed P500,000
• Joint accounts


  • Regardless of whether the conjunction, 'and', 'or', 'and/or' is used, shall be insured separately from any individually-owned deposit account
  • The MDIC shall be divided into as many equal shares as there are account holders unless stipulated otherwise
  • If the account is held by a juridical person or entity jointly with one or more natural persons, the MDIC shall be presumed to belong ENTIRELY to such juridical person
  • In the case of several joint accounts held by the same person, the aggregate interest of each co-owner, whether owned by the same or different combinations of individuals, juridical persons, or entities, shall likewise be subject to the MDIC of 500,000
• Procedures for the PDIC

  1. PDIC shall commence the determination of insured deposits due to the depositors of a closed bank upon its actual takeover of the closed bank

  2. PDIC shall give notice to the depositors of the closed bank of the insured deposits due them by whatever means deemed appropriate by the Board of Directors

  3. PDIC shall publish the notice once a week for at least 3 consecutive weeks in a newspaper of general circulation or, when appropriate, in a newspaper circulated in the community or communities where the closed bank or its branches are located
• Mode of payments of the insured deposits

  • Cash
  • By making available to each depositor a transferred deposit in another insured bank in an amount equal to the insured deposit of such depositor
• When to file and enforce a claim with the PDIC

  1. Within 2 years from the date of the bank takeover

  2. After 2 year period to file a claim, another 2 years are given to enforce the claim

  3. Claims must be filed during the claims settlement operations period, as announced in the Notice to Depositors published in national or local newspapers, or posted on the bank premises and conspicuous places within the locality, and on the PDIC website
• Requirements in filing claims

  • Original Evidence of Deposits
  • Valid Original Photo-Bearing Identification Document with clear signature of the depositor
  • Birth Certificate (if the depositor is below 18) and Valid ID of Parent
  • Notarized SPA for claimants who are not the signatories in the bank records
• Qualification to be entitled to immediate payment of insurance claim

  • Have a total deposit amount of not more than P100,000
  • Have no obligations with the closed bank, have not acted as co-makers of these obligations, or are not spouses of the borrowers
  • Have updated addresses in the bank records or updated them through the Mailing Address Update Form of PDIC before the onsite claims settlement operation starts
  • Have not maintained their accounts under the name of business entities
• Depositors are not required to file deposit insurance claims if they have valid deposit accounts with balances of P100,000.00 and below, provided they have no obligations with the closed bank, have complete mailing address found in the bank records or have updated their addresses through the Mailing Address Update Form (MAUF) of PDIC before the start of the onsite claims settlement operation, and have not maintained the account under the name of business entities
• Who should sign the insurance claim

  • Depositor of the account (applicable to depositors 18 years old and above)
  • Parent (applicable to depositors 18 years old and below)
  • Agent (in case of "by" accounts)
  • Trustee (in the case of "In Trust for" (ITF) accounts)
  • Each depositor (in case of joint accounts such as "Or", "And/Or" or "And" accounts)
• Proof of claim


  • The PDIC, in its discretion, may require proof of claims to be filed before paying the insured deposits
  • If the corporation is not satisfied as to the viability of a claim, it may require the final determination of a court of competent jurisdiction before paying such a claim
• Effect of payment to any depositor on his insured deposit

  • The PDIC shall be discharged from liability to the depositor
  • The PDIC shall be subrogated to all rights of the depositor against the closed bank to the extent of such payment
• Subrogation


  Includes the right on the part of PDIC to receive the same dividends from the proceeds of the assets of such closed bank and recoveries on account of stockholders' equity as would have been payable to the depositor on a claim for the insured deposit
• Depositor shall retain his claim for any uninsured portion of his deposit
• Payments of insured deposits as preferred credit

  Payments of insured deposits in closed banks partake of the nature of public funds, and as such, must be considered a preferred credit similar to taxes due to the National Government in the order of preference under Article 2244 of the New Civil Code
• Effect of non-filing of claims

  • All rights of the depositor with respect to the insured deposit against PDIC shall no longer be honored
  • All rights of the depositor against the closed bank and its shareholders or receivership estate which PDIC may have become subrogated shall revert to the depositor
  • PDIC shall be discharged from any liability on the insured deposit
• Period for PDIC to settle claim

  1. Within 6 months from the date of filing the claim

  2. Failure to settle the claim within the said, where such failure was due to grave abuse of discretion, gross negligence, bad faith, or malice, shall upon convicted, hold people under the PDIC responsible for the delay, to imprisonment from 6 months to 1 year

  3. The period shall not apply if the validity of the claim requires the resolution of issues of facts and or law by another office, body, or agency