ANGARA LEADS RP'S FINANCIAL REFORM AS PGMA SIGNS
PDIC CHARTER AMENDMENTS

Sen. Edgardo J. Angara today said that the signing of the Philippine Deposit Insurance Corporation (PDIC) charter amendments, which will increase the maximum deposit insurance coverage from Php 250,000 to Php 500,000, is a sign that reforms in RP's financial warehouse is on-track.

"These are extremely confusing times where panic can only make matters worse. Maintaining, if not restoring confidence in the banking system should be our priority. A stable and dependable deposit insurance system shores up depositor confidence. It also guarantees the sufficiency of credit to finance vital economic activities in the country," said Angara who chairs the Senate Finance Committee.

He added, "At the proposed level of Maximum Deposit Insurance Coverage (MDIC), 97.23% of the more than 31 million deposit accounts in the country will enjoy the benefits of deposit insurance cover. The increase will encourage depositors to keep their money in the banks, knowing that their savings would be safe, intact, and readily available on the faith and credit of the government."

The Bicameral Conference Committee report maintained Angara's proposal to double the deposit insurance coverage. For the first three (3) years from the effectivity of the Act, the first Php 250,000 shall be for the account of the corporation while the remaining half shall be the obligation of and paid by the National Government.

Angara, who sponsored the measure in the Senate, cited initiatives implemented by other countries to alleviate the financial turmoil in their respective banking systems.

In Europe, the governments of Sweden, Spain, Belgium and The Netherlands have agreed to raise deposit guarantees from €20,000.00 to €100,000.00. Meanwhile, governments of Ireland, Germany, France, Denmark and Austria have provided blanket guarantee of bank deposits. The United Kingdom has likewise increased the guarantee to its depositors from £35,000.00 to £50,000.00.

In the US, The Federal Deposit Insurance Corporation (FDIC) has increased its deposit insurance coverage from $100,000.00 to US$250,000.00 effective until this year.

In Asia, our neighboring countries such as Hong Kong, Malaysia and Singapore have announced sovereign guarantee of all local and foreign currency deposits until the end of 2010. Indonesia has recently extended its coverage from the equivalent of US$9,000.00 to US$182,000.00, while Kazakhstan's coverage was adjusted from the equivalent of US$6,000.00 to US$42,000.00.

"We are facing extraordinary challenges. Internationally, governments have responded by prioritizing measures to restore stability to their respective economies. While nobody can accurately predict what the longer-term consequences of this crisis will be, the emerging truth requires us to prepare for its inevitable impact and for the eventual morning-after scenario." added Angara.