MANILA, Philippines — State-run Philippine Deposit Insurance Corp. (PDIC) has expanded its disbursement network for creditors of closed banks by tapping a payment channel managed by a government bank.
The PDIC yesterday said it signed a memorandum of agreement (MOA) with state-owned Development Bank of the Philippines (DBP), allowing the government’s deposit insurer to avail of the DBP’s Multi-Channel Disbursement Facility (MCDF).
Under the MOA, the PDIC can maximize the MCDF in delivering payments for insurance claims made by depositors and investors of shuttered banks.
The DBP’s facility complements the existing platforms that the PDIC uses to pay the creditors of closed banks. These avenues include: postal money orders; issuance of checks; cash over the counter; and real time gross settlement.
With the MCDF, receivers are provided with a number of payment options for their convenience and safety. Through it, they can obtain their insurance money from intra-bank credit services, as well as PESONet’s participating financial institutions and e-money issuers.
PDIC president and CEO Roberto Tan said opening up PESONet as a payment network serves the interest of depositors and investors of shuttered banks given the range of its affiliations.
“The PDIC is constantly innovating to optimize technology and collaboration to improve services for the depositing public, (and) this partnership with the DBP is step towards that direction,” Tan said.
“We recognize the importance of interconnectedness of financial institutions in the country, and we trust that this facility for deposit insurance payments will provide convenience and also better accessibility for depositors of closed banks,” he said.
Tan also vouched for the safety and security features of the MCDF as a disbursement channel. He said the DBP’s facility complies with the know-your-client procedures of the Bangko Sentral ng Pilipinas and rules and regulations of the Anti-Money Laundering Act and Data Privacy Act.
Mandated to liquidate the assets of closed banks, the PDIC grants insurance of up to P500,000 per depositor. The state-run firm has insured at least 96.73 percent of the 85.35 million deposits in the banking system as of September last year.
PDIC’s capital where it draws the payment for depositors, called the deposit insurance fund (DIF), grew by more than nine percent to P214.8 billion in 2020, from P196.5 billion in 2019.
At that rate, the DIF can insure around seven percent of deposits in the banking system, pegged at P3.07 trillion, staying within the 5.5 to eight percent target range set by the PDIC.