Currencies

[thepennyking]

PDIC to cover 95% of deposits
The Philippine Deposit Insurance Corp. (PDIC) would soon be able to cover at least 95% of the total deposit accounts in the banking system and almost fully cover small deposits generally placed in thrift and rural banks.

PDIC president Ricardo M. Tan said the proposed increase of the maximum deposit insurance coverage to PhP250,000 would make this possible as he stressed the importance of having the bill ratified as soon as Congress resumes session in June.

"With the proposed increase of the maximum insurance coverage to PhP250,000, around 26 million deposit accounts, representing 95% of total deposit accounts in the banking system will be protected," Mr. Tan said.

He added that this level of insurance limit would allow PDIC to almost fully cover deposits of small depositors generally placed in thrift and rural banks with 99% of deposit accounts in rural banks and 96% in thrift banks.

Mr. Tan underscored the passage of the bill, saying that it was important to protect small depositors.

"Small depositors generally have limited access to pertinent information involving their savings in banks. Coupled with this limited access is their inability to process available information," Mr. Tan said.

The bill seeking to increase the maximum insured deposit coverage to PhP250,000 from PhP100,000 remains pending at both Houses of Congress although both chambers already reconciled their differing versions after being stalled since the 12th Congress opened in 2001. The Lower House earlier wanted to hike the insurance coverage to PhP400,000, while the Senate wants to double the current limit to PhP200,000.

The approved bill, which seeks to amend Republic Act 3591, awaits ratification from both Houses before the President can sign it into law.

Aside from increasing the amount of the insured deposit coverage, the approved version of the bill also provides for a permanent and continuing insurance coverage on all insured deposits to protect depositors from sudden bank closures. The approved version of the bill also restores the power of the PDIC to examine banks and to extend financial assistance under certain conditions. -- I.C. Gonzales