Press Release
March 3, 2009


The bicameral conference committee today approved a measure doubling the maximum deposit insurance coverage to half a million pesos after it has ironed out disagreeing provisions between the House and Senate versions on how to strengthen the state-led deposit insurer.

During the bicameral meeting, Senator Edgardo J. Angara - principal sponsor and author of the bill - said the passage of the amended Philippine Deposit Insurance Corporation (PDIC) charter will help regain and further increase public confidence to the local banking system amidst the global financial crisis.

"The real winner behind this endeavor is the PDIC and ultimately, the Filipino depositor. The act of amending its charter constitutes a single task for PDIC, but what the Congress did now is one bold move. It goes to show that both chambers are very much willing to safeguard the interest of the depositing public," said Angara, who chairs Senate Committee on Finance.

He added, "With this endeavor, we not only guarantee the Filipinos of safe, intact and readily available deposits but also sufficiency of credit to finance vital economic activities in the country."

Under the said measure, deposit insurance coverage will be increased and that the first P250,000 shall be for the account of the corporation while the remaining half shall be the obligation of, and deemed automatically appropriated and paid by the National Government. Provided by after six years, the entire maximum deposit insurance coverage shall be for the account of the corporation.

In the same bill, authority has been given to the PDIC to form, establish, organize, operate and/or contract to operate subsidiaries or corporations whose primary purpose is to operate as a bridge bank, which is a temporary bank licensed by the Bangko Sentral ng Pilipinas tasked to acquire assets and assume liabilities of a failed bank to facilitate its resolution.

However, bridge banks are only allowed to purchase assets, assume deposits and other liabilities which the PDIC may deem appropriate and perform such banking functions as the Monetary Board may authorize.

Certified urgent by Malacanang, the deposit insurance measure has been approved by the Senate on third and final reading, via a roll-call vote of 13-0 last January 19.

In the end, Angara said, "The passage of the amended PDIC charter in the Senate is one bold move to place the country in a better position to be able to absorb shock from this credit crisis and financial turbulence."

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