Senate bill expands PDIC authority

A BILL seeking to improve the country’s bank liquidation framework was filed in the Senate last week, aiming to strengthen depositors’ protection by expanding the authority of the Philippine Deposit Insurance Corp. (PDIC).

Senate Bill No. 1667 seeks to allow PDIC’s board to set the maximum deposit insurance coverage for products classified as deposits by the Bangko Sentral ng Pilipinas, index the ceiling to economic indicators such as inflation and revise the assessment rate for deposit insurance premiums.

It also seeks to ease the release of deposit insurance claims, allowing depositors quicker access to their savings if a bank shuts down.

“The amendments will empower the PDIC to respond decisively to emerging risks and financial crises, while minimizing disruptions to the financial system,” Senate President Vicente C. Sotto III, who authored the bill, said in its explanatory note. 

He said the bill also seeks to expand the coverage of deposit insurance to include non-bank financial institutions and cooperative products deemed as deposits by authorities.

“In times of financial crisis, the bill authorizes the temporary grant of full deposit insurance coverage, or Temporary Blanket Coverage, upon determination by the Monetary Board when there is a threat to financial system stability,” he added. — Kenneth Christiane L. Basilio