P63 M raised from sale of closed banks’ assets

MANILA, Philippines – State-run Philippine Deposit Insurance Corp. (PDIC) raised P62.79 million from the sale of assets of closed banks in the second quarter of the year, raising additional money to beef up its buffer fund.

PDIC said it raised P29.05 million from the bidding conducted last June 30 yielding a premium of P1.72 million as it set an aggregate minimum disposal price of P27.33 million for 17 properties located in Caloocan City, Parañaque City and in the provinces of Bulacan, Cebu, Rizal, Ilocos Sur, Isabela, Laguna, Pangasinan, Tarlac, and Zambales.

The deposit insurer auctioned 224 assets worth P128.9 million through a public bidding.

Last May 31, PDIC sold a total of P33.74 million of the P135 million worth of assets placed on the auction block.

This yielded a premium amounting to P6.8 million against the aggregate minimum disposal price of P26.9 million. The properties sold are located in Parañaque City and in the provinces of Benguet, Bulacan, Ilocos Sur, Isabela, Misamis Oriental, Nueva Ecija and Pangasinan.

Proceeds from the sale of closed banks’ properties are added to the pool of liquid assets of the bank for distribution to uninsured depositors and other creditors in accordance with the rules on concurrence and preference of credits.

Meanwhile, gains from the sale of corporate assets are added to PDIC’s Deposit Insurance Fund, its main fund source for payment of valid deposit insurance claims.

The expeditious liquidation and resolution of assets is a strategic direction of PDIC, as liquidator of closed banks.

To carry this out, PDIC conducts various asset disposal initiatives such as biddings, auctions and negotiated sale.

The BSP has so far closed down 12 banks this year as it continues to rid the industry of weak players.

The closed banks include Rural Bank of Siaton (Negros Oriental) Inc., the New Rural Bank of Binalbagan (Negros Occidental) Inc.; GSIS Family Bank; the Rural Bank of Amadeo (Cavite) Inc.; Surigao City Evergreen Rural Bank Inc., Rural Bank of Malinao (Aklan) Inc.; the Rural Bank of Bayawan; Lapu-Lapu Rural Bank Inc. based in Carcar City Cebu; the Rural Bank of Villaviciosa (Abra) Inc.; Koronadal Rural Bank Inc.; Rural Bank of Panay Inc.; and Rural Bank of Basay (Negros Oriental) Inc.

The BSP is looking at consolidating the Strengthening Program for Rural Banks (SPRB) Plus and the Comprehensive Program for Rural Banks (CPRB) to entice mergers among smaller banks with the entry of stronger foreign banks into the country.