MANILA, Philippines - A law further protecting the 50-million strong depositing public through amendments to the charter of the state-run Philippine Deposit Insurance Corp. (PDIC) is awaiting the signature of President Aquino.
The Senate passed Senate Bill 2976 of Sen. Sergio Osmeña III last December while the House of Representatives approved House Bill 6020 of Rep. Nelson Collantes last January.
Both bills which seek to amend RA 3591 or the PDIC charter are awaiting President Aquino’s approval.
PDIC said the proposed legislation provides for the settlement of deposit insurance claims based not only on the closed bank’s records but also on the depositor’s evidence of deposit.
Depositors with uninsured deposits will also benefit from the bill as it elevates the status of uninsured deposits from an ordinary credit to ordinary preferred credit, improving the depositors’ chances of recovering their hard-earned uninsured deposits in closed banks.
The proposed amendments to the PDIC Charter are also intended to minimize disruption to the financial system and promote financial inclusion by providing depositors with continued access to banking services.
Among the highlights of the bill are reform measures in bank resolution and liquidation, immediate access to deposit insurance claims, elevation of status of uninsured deposits to ordinary preferred credit and enhanced governance and institutional framework for the state deposit insurer.
With a strengthened resolution authority, PDIC would be able to play a more proactive role in resolving problem banks while these are still open, preserving the bank’s franchise value and minimizing disruption in the banking system.