PDIC LAW Deposit Insurance Law RA 3591, 10846 creditors in accordance with the preference and

concurrence of credits as provided by the Civil Code of

THE PDIC
the Philippines.
The Philippine Deposit Insurance Corporation (PDIC) is a
government instrumentality created on 22 June 1963 by
Republic Act 3591 entitled. An Act Establishing the PDIC COMPOSITION
Philippine Deposit Insurance Corporation (PDIC),
- DOF Secretary-ex officio Chairman
Defining Its Powers and Duties and for Other Purposes.
- PDIC President-appointed by President of the
The PDIC is an attached agency of the Department of
Philippines -Vice Chairman of the Board
Finance.
- BSP Governor-ex officio Member
- 4 members from the private sector - appointed
by President of the Philippines
PUBLIC POLICY OBJECTIVES
Insured Deposits The term ‘insured deposit’ means the
 to promote and safeguard the interests of the
amount due to any bona fide depositor* for legitimate
depositing public by way of providing insurance
deposits in an insured bank net of any obligation of the
coverage on all insured deposits.
depositor to the insured bank as of the date of closure,
 to strengthen the mandatory deposit insurance
but not to exceed P500,000.00.
coverage system
 to generate, preserve, and maintain faith and Determining the insurable deposit
confidence In the country's banking system
In determining the insured amount, the
 to protect it from illegal schemes and
outstanding balance of each account is adjusted, such
machinations.
that interests are updated, withholding taxes are
PDIC has the authority to: deducted, accounts maintained by a depositor in the
same right and capacity are added together; and
 help depositors have quicker access to their insured whenever applicable, unpaid loans and other
deposits should their bank close obligations of the depositor are deducted; and in no
 resolve problem banks while still open case shall be insured deposit exceed P500,000.
 hasten the liquidation process for closed banks
 penalties against those who engage in unsafe and MEMBERSHIP
unsound banking practices Membership with PDIC is mandatory for all banks
MANDATE licensed by the BSP to operate in the Philippines:

1. Deposit Insurance.  Banks incorporated under Philippine laws, such

as commercial banks, savings banks, mortgage
PDIC provides a maximum deposit insurance coverage banks. stock savings and loan associations,
of PhP500,000 per depositor per bank. To pay claims on development banks, cooperative banks, and
insured deposits, PDIC builds up the Deposit Insurance rural banks
Fund (DIF) primarily through assessments of banks at an  Domestic branches of foreign banks
annual flat rate of 1/5 of 1% of their total deposit
liabilities.

Deposit in Civil Code – To place a thing in a depositary SCOPE OF DEPOSIT INSURANCE PROTECTION
for safekeeping until it settles the claim for that thing Maximum deposit insurance coverage of Php 500,000
2. Receivership of Closed Banks. per depositor per bank

PDIC proceeds with the liquidation process upon order By Deposit Type By deposit By currency
of the Monetary Board of the Bangko Sentral ng amount
Pilipinas (BSP). The assets of the closed bank are Savings Single PHP
managed and eventually disposed of to settle claims of Special Savings Joint Foreign
 Currency  Bank deposits in foreign banks operating
Demand/ By, ITF, FAO outside the Philippines
Checking  Bank deposits in foreign branch of domestic
Negotiable order bank operating outside the Philippines
of withdrawal
Time deposits What specific risks does PDIC cover to a bank?

The Philippine Deposit Insurance Corporation covers

only the risk of a bank closure ordered by the Monetary
Board. Thus, bank losses due to theft, fire, closure by
Types of deposits insured by PDIC: reason of strike or existence of public disorder,
 deposits of all commercial banks, savings and revolution or civil war, are not covered by PDIC.
mortgage banks, rural banks, private development UNSAFE AND UNSOUND DEPOSIT-RELATED ACTIVITIES
banks, cooperative banks, savings and loan associations,
as well as branches and agencies in the Philippines of  Deposit-related practice/activity/transaction
foreign banks and all other corporations authorized to without the approval or adequate controls
perform banking functions in the Philippines, are required under existing laws, rules and
insured with PDIC. regulations
 Failure to keep bank records within bank
 As for Philippine banks with branches outside the premises
country, RA 9576 stipulates that subject to the approval  Granting high interest rates, when bank has: (i)
of the Board of Directors, any insured bank with the negative unimpaired capital, or (ii) liquid assets
branch outside the Philippines may elect to include for to deposit ratio less than 10%
insurance its deposit obligations payable at such  Non-compliance with PDIC regulations
branch.

 Foreign currency deposits are also insured by PDIC

pursuant to RA 6426 (“An act instituting a foreign SINGLE ACCOUNTS
currency deposit system in the Philippines and for other are individually-owned accounts or accounts held under
purposes”) and Central Bank (CB) Circular No. 1389. one name, either as:
Depositors may receive payment in the same currency
in which the insured deposit is denominated.  natural person - any individual person. Single
proprietors are considered natural persons.
Not covered:  juridical entity -refers to a corporation,
Investment products such as bonds accounts and other partnership or cooperative.
similar instruments and securities, trust

Deposit accounts or transactions that: JOINT ACCOUNTS

 Are unfunded, fictitious or fraudulent General rule: the insured amount is divided equally
 Constitute and/or emanate from unsafe and among co-owners of a joint account.
unsound banking practice/s as determined by
the PDIC, in consultation with the BSP, after due Exception: Unless a different sharing is stipulated in the
notice and hearing and publication of PDIC's deposit documents
cease & desist order against such deposit
A joint account regardless of whether the conjunction
accounts/transactions
"and", "or" or "and/or" is used shall be insured
 Are determined to be proceeds of an unlawful
separately from single accounts.
activity as defined in the Anti-Money
Laundering Act (Republic Act 9160, as Example:
amended)
Account Name Deposit Andy’s share in
the Insured
 Deposit - Depositors with valid deposit accounts with
Andy Lim and 500,000 250,000 balances of more than Php 100,000
Kenneth Sy - Depositors who have outstanding obligations
Andy Lim and 1,000,000 250,000 with the closed bank regardless of amount of
Sam Ting- deposits.
Wong - Depositors with account balances of less than
Andy Lim 1,000,000 Php 100.000 who have no updated addresses in
and/or Kelly Ty the bank records or who have not updated their
Total 2,500,000 500,000
addresses through the MAUF issued by the
PDIC.
- Depositors who maintain their accounts under
the name of business entities, regardless of
By, ITF, FAO Accounts type of account and account balance.
 In a "By" account, Ana by Ben, Ana is the - Depositors with accounts not eligible for early
depositor. payment, regardless of type of account and
 In an "In Trust For" (ITF) account, Ana In Trust account balance, per advice of PDIC.
For Ben, Ben is the depositor.
 In a "For the Account of" (FAO) account, Ana
For the Account of Ben, Ben is the depositor. Persons NOT required to file deposit insurance claims:

In the case where a depositor is the sole beneficial - Valid deposit accounts
owner of a single, "For the Account of", "By", and - Balance of Php 100,000 and below
"In Trust For" accounts, the consolidated balances - No obligations with the closed bank Complete
of these accounts shall be insured up to and updated addresses in the bank records of
Php500,000. through the MAUF issued by the PDIC

Example:

Account Name Deposit Insured REQUIREMENTS FOR CLAIMS

Deposit
Steps in filing:
Andy Lim 100,000 100,000
Kenneth Sy 100,000 100,000 1. Prepare the following documents:
FAO Andy Lim
Sam Ting- 100,000 100,000 a) Original evidence of deposits
Wong ITF Andy
b) One valid photo-bearing ID with clear
Lim
signature
Andy Lim 700,000 200,000
Optical Clinic c) Original PSA birth certificate if below 18
Total 1,000,000 500,000
d) Original copy of notarized SPA for claimants
who are not signatories in the bank records
REQUIREMENTS FOR CLAIMS
2. Submit personally or through mail
When to file claims - during the claims settlement
operations period as announced in the Notice to
Depositors. Who should sign the deposit insurance claim form?
Depositors have 2 years from PDIC takeover to file their - Depositor - if 18 and above
deposit insurance claims. - Parent-if below 18
Persons required to file deposit insurance claims: - "Agent - "by"
- Trustee - ITF
- Each depositor - "and", "or", "and/or"