Senate passes PDIC Charter amendments on Third Reading

The Senate unanimously approved on third and final reading a bill amending the Philippine Deposit Insurance Corp. (PDIC) charter, making it an attached agency of the Bangko Sentral ng Pilipinas (BSP).

Voting 23-0-0, the Senate passed during its hybrid plenary session Monday, January 31, 2022, Senate Bill No. (SBN) 2365 or An Act Amending Sections 1, 3, 4, 5, 6, 7, 8, 9, 10, 11, 13, 18, 22, 24, 26, and 28 of Republic Act No. 3591, otherwise known as the PDIC Charter.

With the passage of SBN 2365, PDIC is one step closer toward becoming an attached agency of the BSP. The PDIC is currently an attached agency of the Department of Finance. The transfer of PDIC to BSP is seen to provide better policy, program coordination and collaboration, and regulatory efficiency.

Sen. Sonny Angara, who sponsored SBN 2365, thanked his colleagues for passing the measure, saying that the measure will help strengthen the country's banking system, promote people's faith and confidence in it, and help boost the country's economic recovery in light of the pandemic.

"For the PDIC bill, I would like to thank Sen. (Grace) Poe, chairman of the Banks Committee for trusting me with that responsibility," Angara said.

Aside from becoming an attached agency of the BSP, SBN 2365 empowers the board of directors with the flexibility to increase the maximum deposit insurance coverage (MDIC).

The PDIC is further mandated to review the MDIC every three years and allow them to increase the coverage based on inflation and other pertinent economic indicators, according to SBN 2365.

Several amendments on the PDIC Charter were also made to further streamline the regulatory framework and complement the objective of creating a more collaborative policy framework for the BSP, the PDIC, and all other stakeholders in the financial sector.

SBN 2365 also expanded the authority of the PDIC to cover the non-conventional deposit liabilities of Islamic banks as a precursor to the establishment of Islamic Deposit Insurance System (IDIS).