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Bank panel endorses PDIC amendment bill
BMirror/12.05.08

THE Senate’s banks committee approved in principle on Thursday a pending proposal to double to P500,000 the maximum deposit insurance coverage (MDIC) from the existing limit of P250,000 in a bid to shore up depositors’ confidence in the domestic banking system.

“There is almost unanimous endorsement of the measure,” Sen. Edgardo Angara, chairman of the Committee on Banks, Financial Institutions and Currencies, said in concluding a public hearing on separate bills that he and Sens. Francis Escudero and Mar Roxas II filed amending the charter of the Philippine Deposit Insurance Corp. (PDIC).

Angara assigned a technical working group (TWG) that includes representatives from the PDIC, Bangko Sentral ng Pilipinas (BSP), Bankers Association of the Philippines, Chamber of Thrift Banks and the Rural Bankers Association to consolidate the three related bills raising the MDIC to P500,000. They will submit a report by Monday.

“In principle, there seems to be no disagreement on our proposal; it is the coordination part that needs to be harmonized [by the TWG],” Angara added.

PDIC president Jose Nograles informed Angara’s committee at the hearing that the measure is expected to “lead to a stronger and more dependable deposit-insurance system.”

He noted that the measure is “long overdue” and the brewing international financial crisis has made early passage of the PDIC amendment bill “more imperative.”

At the hearing, BSP Deputy Governor Nestor Espenilla Jr. endorsed the measure, also citing “the severity of the financial situation.”

Taking turns addressing the committee, Bankers Association of the Philippines executive director Leonilo Coronel, Chamber of Thrift Banks executive director Suzanne Felix, and Rural Bankers Association of the Philippines president Tomas Gomez IV also assured support for the PDIC bill. They acknowledged the need to adopt such measures in order to strengthen the local banking institutions in the midst of the global financial turmoil.