Report on the new regulations issued by the PDIC to reinforce its role in safeguarding the interests of the depositing public by way of providing insurance coverage on all insured deposits

Philippine Deposit Insurance Corporation (PDIC) is a government instrumentality created in 1963 by virtue of Republic Act 3591, as amended, to insure the deposits of all banks. PDIC exists to protect depositors by providing permanent and continuing deposit insurance coverage for the depositing public and help promote financial stability. The Corporation provides the maximum deposit insurance coverage of Php500,000 per depositor per bank. In promoting financial stability, the PDIC is tasked to continuously build up the level of the Deposit Insurance Fund (DIF), the fund source for deposit insurance payouts and financial assistance to banks, to enable it to adequately respond to insurance calls.In the event of bank closures, PDIC pays valid deposit accounts and deposit insurance claims as soon as possible and within the set turnaround time to provide immediate relief to depositors.

To reinforce its role in safeguarding the interests of the depositing public, PDIC issues several regulations. The following are some of the new regulations issued:

Regulatory Issuance No. 2011-02Pursuant to its authority to prescribe and issue rules and regulations, the PDIC approved the promulgation of the Rules and Regulations Governing Deposit Accounts or Transactions Excluded from the Coverage of Deposit Insurance (Regulatory Issuance No. 2011-02). Issued in 2011, this aims to govern deposit accounts or transactions excluded from the coverage of deposit insurance under Sections 4(f) and (g) of the PDIC Charter. Only legitimate deposits from bona fide depositors shall be entitled to deposit insurance in order to promote and safeguard the interests of the legitimate depositing public.

The Regulatory Issuance excludes from deposit insurance coverage the following accounts or transactions:(1) Investment products such as bonds and securities, trust accounts, and other similar instruments which do not fall under the definition of a Deposit;(2) Deposit accounts or transactions which are unfunded, or are fictitious or fraudulent;(3) Deposit accounts or transactions constituting, and/or emanating from, Unsafe and/or Unsound Banking Practice/s; and(4) Deposits that are determined to be the proceeds of an Unlawful Activity as defined under Republic Act No. 9160.

Regulatory Issuance No. 2011-03Pursuant to its authority to further implement the applicable provisions on the settlement of insured deposits, the PDIC approved the promulgation of the Rules and Regulations for the Filing of Requests for Reconsideration for Denied Claims for Deposit Insurance. The Issuance is in line with the aim of the PDIC to pay all legitimate deposits held by bona fide depositors and to provide a mechanism by which depositors may seek reconsideration from the decision of the PDIC denying a deposit insurance claim. The Regulatory Issuance shall apply to all deposit insurance claims denied by PDIC either wholly or partially.

Regulatory Issuance No. 2015-01In 2015, the PDIC also approved the promulgation of the Rules and Regulations Governing Computerized Records of Bank Deposits in order to facilitate the efficient determination by PDIC of its exposure in insured deposits, and to enable prompt and accurate reimbursement of deposit insurance claims when necessary. The Regulatory Issuance requires each member bank to have a computerized database system where updated and accurate depositor/deposit information and deposit transactions for each and every deposit account are maintained and safely stored, and a backup and recovery arrangement for the depositor/deposit information and deposit transactions in accordance with the disaster recovery and business continuity plan guidelines and requirements of the Bangko Sentral ng Pilipinas.