PDIC: Full payment to uninsured Exportbank depositors nearly impossible

MANILA, Philippines - Uninsured depositors of the shuttered Export and Industry Bank will take a haircut on their money once they are paid by the government, the Philippine Deposit Insurance Corp. (PDIC) said.

“Their claims will not be settled 100 percent,” Nancy Sevilla-Samson, PDIC vice-president for receivership, told reporters in a briefing on Monday. 

Uninsured deposits are those in excess of the P500,000 maximum insured deposits prescribed under law per each account owner. PDIC data showed Exportbank’s uninsured deposits totaled P11 billion from 2,666 accounts.

Last April 16, the state deposit insurer announced it already received the Bangko Sentral ng Pilipinas’s go signal to proceed with the liquidation of Exportbank after two failed public auctions.

The process will include selling P13.65 billion worth of assets to settle P24.67 billion in liabilities, according to latest data. This represented a deficiency of P11.02 billion. 

Since priority will be given to Exportbank’s creditors such as share and bondholders, Sevilla-Samson said there will be no enough money to meet all uninsured deposits.

“It will be nearly impossible,” she added, referring to the settlement of all uninsured deposits in full. 

Exportbank was shut down last April 26, 2012 after it failed to service depositor’s claims. The BSP’s policy making monetary board then put it under receivership by the PDIC, which scheduled two biddings that eventually failed.

The liquidation process will begin next month, starting with the sale of real and other properties acquired by the bank including the 38-floor Exportbank Plaza located in Chino Roces Avenue in Makati City.

That is by far the most expensive of Exportbank’s properties, estimated to worth P1.4 billion, PDIC Executive Vice President Cristina Orbeta said in the same briefing.

“We would like to be able to sell the assets starting May. We will announce the bidding as soon as possible,” Orbeta explained. 

Should public auction for the assets fail, Sevilla-Samson said the PDIC will embark on negotiated sale where the price of the properties could be lower. 

Proceeds of the sale will then be placed in an “account” and will be distributed to creditors once the court comes out with a decision on the petition for assistance in liquidation. This will serve as “guidance” on who will be paid first. 

“We will file the petition by May,” Orbeta said, adding that Exportbank’s banking license have already been “cancelled” and can no longer be bid out. 

While creditors and uninsured depositors will still have to wait to get their claims, Orbeta said all insured deposits covered by the deposit insurance fund have already been settled. 

The deposit insurance fund— used to settle insured deposits of up to P500,000— grew by 8.67 percent as of the first quarter this year. It now amounted to P91.5 billion as against previous year’s P84.2 billion.