PHILIPPINE DEPOSIT

INSURANCE
CORPORATION ACT (PDIC)

R.A 3591
Basic Policy
Philippine Deposit Insurance Corporation (PDIC) is hereby created to insure, as herein provided, the
deposits of all banks which are entitled to the benefits of insurance and which shall have the powers
herein granted.
The Corporation shall, as a basic policy, promote and safeguard the interests of the depositing public
by way of providing permanent and continuing insurance coverage on all insured deposits and helping
maintain a sound and stable banking system
Powers and Functions of PDIC
The powers and functions of the Corporation shall be vested in
a Board of Directors which shall have the authority to:
1) Prepare and issue rules and regulations as it considers necessary for the effective discharge of its responsibilities or issues regulatory
issuances, which are regulations for compliance by banks to help improve bank operations and promote transparency;
2) Direct the management, operations and administrations of the Corporation;
3) Appoint, fix the remunerations and remove all officers and employees of the Corporation, subject to the Civil Service Law;
4) Authorized such expenditures by the Corporation as are in the interest of the effective administration and operation of the Corporation;
5) Insure the deposits of all banks and to protect depositors by providing deposit insurance coverage for the depositing public and help
promote financial stability; and
6) Conduct bank examinations in collaboration with the Bangko Sentral ng Pilipinas.
The Corporation as a corporate body shall have the power to:
1. Adopt and use corporate seal;
2. Have succession until dissolved by an Act of Congress;
3. Make contracts;
4. Sue and be sued, complain and defend, in any court of law in the Philippines;
5. Appoint, by its Board of Directors, such officers and employees as are not otherwise provided for
in this Act to define their duties, fix their compensation, require bonds of them and fix penalty
thereof and to dismiss such officers and employees for cause;
6. Prescribed, by its Board of Directors, by – laws not inconsistent with law, regulating the manner in which its
general business may be conducted, and the privileges granted to it by law may be exercised and enjoyed;
7. Exercised, by its Board of Directors, or duly authorized officers or agents, all powers specifically granted by the
provisions of this Act, and such incidental powers as shall be necessary to carry on the powers so granted;
8. Make examination of and require information and reports from banks, as provided in this Act;
9. Act as receiver;
10. Prescribed, by its Board of Directors such rules and regulations as it may deem necessary to carry out the
provisions of this Act.
Concept of Insured Deposits
Insured deposits means the net amount due to any depositors for deposits in an insured bank (after
deducting offsets) less any part thereof which is in excess of 10, 000.00 and such net amount shall be
determined according to such regulations as the Board of Directors may prescribed and in determining
the amount due to any depositor there shall be added together all deposits in the bank maintained in
the same capacity and the same right for his benefit or in his own name or in the names of others.
Insured deposits can be recovered by any bona fide depositors for legitimate deposits in an insured
bank net of any obligation of the depositor to the insured bank but not to exceed 500, 000.00.
Payment of an insured deposit to any person by the Corporation shall discharge the Corporation, and
payment of a transferred deposit to any person by the new bank or by an insured bank in which a
transferred deposit has been made available shall discharge the Corporation and such new bank or
other insured bank, to the same extent that payment to such person by the closed bank would have
discharged it from liability for the insured deposit.
A joint account shall be insured separately from any individually – owned deposit account
Provided that,
1) If the account is held jointly by two or more natural persons, or by two or more juridical persons
or entities, the maximum insured deposit shall be divided into as many equal shares as there are
individuals, juridical persons or entities, unless a different sharing is stipulated in the document of
deposit; and
2) If the account is held by a juridical person or entity jointly with one or more natural persons, the
maximum insured deposits shall be presumed to belong entirely to such juridical person or entity
LIABILITY OF DEPOSITORS
is where the fiduciary bank deposits a trust funds held by an insured bank in a fiduciary capacity in
other insured banks, the amount so held by other insured banks on deposit shall not for the purpose of
any certified statement required under subsections (b) and (c) of this section
(b) – on or before the 15th of July of each year, each insured bank shall file with the Corporation a certified statement
showing for the six (6) months ending on the preceding June thirty (30) the amount of the assessment base and the amount
of the semiannual assessment due to the Corporation for the period ending on the following December thirty – one (31),
determined in accordance with subsection (a) of this section, which shall contain or be verified by a written declaration that
it is made under the penalties of perjury. Each insured bank shall pay to the Corporation the amount of the semiannual
assessment it is required to certify. On or before the 15th day of January of each year, each insured bank shall file with the
Corporation a similar certified statement for the six months ending on the preceding December thirty – one (31) and shall
pay to the Corporation the amount of the semiannual assessment for the period ending on the following June thirty (30)
which it is required to certify.
(c) – each bank which becomes an insured bank shall not be required to file any certified statement or pay any assessment
for the semiannual period in which it becomes an insured bank. On the expiration of such period, each such bank shall
comply with the provisions of subsection (b) of this section except that the semiannual assessment base for its first certified
statement shall be the assessment base of the bank as of the close of business on the preceding June thirty (30) or
December thirty – one (31) whichever is applicable, determined in accordance with subsection (a) of this section. If such
bank has assumed the liabilities for deposits of another bank or banks, it shall include such liabilities in its assessment
base. The first certified statement shall show as the amount of the first semiannual assessment due to the Corporation, an
amount equal to the product of one – half (1/2) of the annual assessment rate multiplied by such assessment base.
 A liability that protects against losses arising from Wrongful Acts in establishing, maintaining,
administering or servicing any PDIC – insured deposit account or processing any transaction related
to such account
Depositors liability can result from banks honoring instruments with improper endorsements,
erroneous asset transfers, and general account errors.
Deposit liabilities required to be
insured with PDIC
1. PDIC as a Corporation requires deposit liabilities required to be insured under their control are all
valid deposits up to the maximum deposit insurance coverage of 500, 000.00 per deposit
2. Insured deposits by deposit type, deposit accounts, currency
DEPOSIT ACCOUNTS NOT
ENTITLED TO PAYMENT
 Deposits Accounts not entitled to payment are:

1. Investment products such as bonds, securities and trust accounts

2. Deposit accounts which are unfunded, fictitious, or fraudulent
3. Deposit products constituting or emanating from unsafe and unsound banking practices, and
deposits that are not determined to be the proceeds of an unlawful activity
CONCEPT OF BANK
RESOLUTION
“SEC. 11. (a) RA 10846
The Corporation, in coordination with the Bangko Sentral ng Pilipinas, may commence the resolution
of a bank under this section upon:

“(1) Failure of prompt corrective action as declared by the Monetary Board; or

“(2) Request by a bank to be placed under resolution.

•It occurs when BSP determine that a failing bank cannot go through normal insolvency proceedings
without harming public interests and causing financial instability

•It also the restructuring of a bank by a resolution authority through the use of resolution tools in order
to safeguard public interest, including the continuity of the bank’s critical functions, financial stability
and minimal costs
ROLE OF PDIC IN RELATION
TO BANKS IN DISTRESS
The role of the PDIC in relation to banks in distress are taking over and closing the affairs of the bank
for purposes of conservatorship, receivership and liquidation
Conservatorship
a legal concept whereby a the MB appoints the PDIC to manage a bank in distress affairs. The
conservator's duties include overseeing finances, establishing and monitoring, and managing the
banks transactions.
Closure and take over

Whenever a bank is now ordered closed by the MB, it shall no longer be rehabilitated, and the PDIC
will take over the same
Receivership
The Corporation as a receiver shall control, manage and administer the affairs of the closed bank
effective immediately upon takeover as a receiver of such bank, the powers, functions and duties of
the closed bank
Liquidation
A final stage of bank resolution involves purchase of assets and assumption of liabilities with an
objective: to return the bank to its prior status of financial viability