PHILIPPINE DEPOSIT INSURANCE CORPORATION | R.A. No.

3591, as amended
Syllabus:
8.1. PDIC Law
8.1.1. Insurable Deposits
8.1.2 Maximum Liability
8.1.3 Requirements for Claims

POLICY OF THE STATE [Sec. 2]

Promote and safeguard the interests of the depositing public by providing insurance coverage on all insured deposits and helping maintain
a sound and stable banking system.
Towards this end, the government must extend all means and mechanisms necessary for the Philippine Deposit Insurance Corporation to
effectively fulfill its vital task of promoting and safeguarding the interests of the depositing public by way of providing permanent and
continuing insurance coverage on all insured deposits, and in helping develop a sound and stable banking system at all times.

PHILIPPINE DEPOSIT INSURANCE CORPORATION (PDIC)

• PDIC exists to protect depositors by providing deposit insurance coverage for the depositing public and help promote financial stability.
• PDIC is a government instrumentality created in 1963 by virtue of Republic Act 3591 to provide depositor protection and promote financial
stability. It is an attached agency of the Bangko Sentral ng Pilipinas.
• The PDIC prides itself as a professional, committed and responsive public service institution and a champion in governance. It is a socially
responsible corporation which advocates to empower every Filipino through financial literacy.
• NOTE: Even though the law calls PDIC a “corporation.” It is a government instrumentality with corporate powers and fiscal and administrative
autonomy.

• OVERALL MANDATE
PDIC exists to provide deposit insurance coverage for the depositing public to help promote public confidence and stability in the
economy. It ensures prompt payment of insured deposits, exercises complementary supervision of banks, adopts responsive
resolution methods, and applies efficient management of receivership and liquidation functions.1

• POWERS AND FUNCTION OF PDIC

1. Deposit insurer
2. Co-regulator of banks
3. Receiver and liquidator of closed banks

• BOARD OF DIRECTORS [Sec. 3(a)]

WHO? POSITION IN BOARD OF DIRECTORS (7)
Governor of the BSP ex officio Chairperson (without compensation)
Secretary of Finance ex officio Vice Chairperson (without compensation)
Appointed by the President of the Philippines President of the Corporation (full-time basis for 6 years term)
From Private Sector appointed by the President of the Members (6 years term unless removed sooner w/ cause, 1 reappointment)
Philippines [the first 2 appointees shall serve for 3 years]
NOTE: “ex officio” means as a result of one’s position. Ex: The Governor of BSP is also automatically the Chairperson of the board.
o Appointment to any vacancy shall be only for the unexpired term of the predecessor.
o The presence of four (4) members shall constitute a quorum.
o All decision of the Board of directors shall require the concurrence of at least four (4) members.
REQUIREMENTS
▪ Good moral character
▪ Unquestionable integrity and responsibility
▪ Of known probity and patriotism
▪ Recognized competence in economics, banking and finance, law, management administration or insurance
▪ 35 years of age
NOTE: For the duration of their tenure or term of office and for a period of one (1) year thereafter, the appointive
members of the Board shall be disqualified from holding any office, position or employment in any insured bank.

• BANK’S MEMBERSHIP TO PDIC

o Membership of banks to PDIC is mandatory; hence, all operating banks are members of PDIC.
o Insurance premium is paid by the banks, not by the depositors.
o The bank is assessed 1/5 of 1% per annum of the assessment base of the bank.

CAUSES FOR BANK CLOSURE [Sec. 30, The New Central Bank Act]
1. Is unable to pay its liabilities as they become due in the ordinary course of business: Provided, that this shall not include inability to pay
caused by extraordinary demands induced by financial panic in the banking community;
2. Has insufficient realizable assets, as determined by the Bangko Sentral, to meet its liabilities;
3. Cannot continue in business without involving probable losses to its depositors or creditors; or
4. Has willfully violated a cease-and-desist order under Section 37 that has become final, involving acts or transactions which amount to fraud
or a dissipation of the assets of the institution; in which cases, the Monetary Board may summarily and without need for prior hearing
forbid the institution from doing business in the Philippines and designate the Philippine Deposit Insurance Corporation as receiver of the
banking institution.
NOTE: The monetary board shall notify in writing the board of directors of its findings and direct the receiver to proceed with the
liquidation of the institution.
The actions of the Monetary Board taken under this section (liquidation) or section 29 (conservatorship) shall be final and
executory, and may not be restrained or set aside by the court except on petition for certiorari on the ground that the action
taken was in excess of jurisdiction or with such grave abuse of discretion as to amount to lack or excess of jurisdiction.

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PDIC’s Frequently Asked Questions, https://www.pdic.gov.ph/faqs
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PDIC as INSURER
• INSURED DEPOSITS
o The term ‘insured deposit’ means the amount due to any bona fide depositor for legitimate deposits in an insured bank net of any
obligation of the depositor to the insured bank as of date of closure, but not to exceed P500,000.00.
o A joint account shall be insured separately from any individually-owned deposit account.

o Except for the exclusions stipulated in RA 9576, deposits of all commercial banks, savings and mortgage banks, rural banks, private
development banks, cooperative banks, savings and loan associations, as well as branches and agencies in the Philippines of foreign
banks and all other corporations authorized to perform banking functions in the Philippines, are insured with PDIC. As for Philippine
banks with branches outside the country, RA 9576 stipulates that subject to the approval of the Board of Directors, any insured bank
with branch outside the Philippines may elect to include for insurance its deposit obligations payable at such branch.

o Foreign currency deposits are also insured by PDIC pursuant to RA 6426 (“An act instituting a foreign currency deposit system in the
Philippines, and for other purposes”) and Central Bank (CB) Circular No. 1389. Depositors may receive payment in the same currency
in which the insured deposit is denominated.

o The PDIC Charter provides that the deposits in branches and subsidiaries of foreign banks licensed by the Bangko Sentral ng Pilipinas
(BSP) to perform banking functions in the Philippines are insured by the PDIC.

o The PDIC Charter provides that a Philippine bank may elect to insure with the PDIC its deposits in branches outside the Philippines.
As of 8 September 2022, no Philippine bank has elected to insure deposits in their foreign branches with PDIC.

o TYPES OF DEPOSIT ACCOUNT COVERED BY INSURANCE NOTE: R.A. No. 11840 that amended the PDIC Charter in 2022
a. Savings provides for the establishment of a separate deposit insurance or
b. Special Savings “takaful” for certain products or arrangements of Islamic Banks
c. Demand/Checking deemed as deposits by the BSP.
d. Negotiable Order of Withdrawal (NOW)
The amendments in R.A No. 1405 (BSL) as to the inclusion of
e. Time Deposits
“trust funds” in the definition of deposits does not apply to
insurance coverage. Thus, trust funds are not insured by PDIC.
o EXCLUSION FROM DEPOSIT INSURANCE COVERAGE
(R.A. No. 9576)
1. Investment products such as bonds, securities
The following are some examples of banking practices that may
and trust accounts and other similar
be considered unsafe and/or unsound:
instruments
1. Solicitation and acceptance of deposits outside bank
2. Deposit accounts or transactions that:
premises, including branches, without BSP authority
a. Are unfunded, fictitious or fraudulent as
2. Non-compliance with minimum identification and
determined by the Corporation
documentation requirements from depositors in the
b. Constitute unsafe and unsound banking
opening of deposit accounts (Anti-Money Laundering Law)
practice/s as determined by the PDIC, in
3. Allowing depositors to deposit, withdraw, and/or transfer
consultation with the BSP, after due
funds without proper documentation such as duly
notice, hearing and publication of a
accomplished deposit or withdrawal forms
directive to cease & desist issued by the
4. Granting high interest rates, when bank has:
BSP against such deposit
(i) negative unimpaired capital, and
accounts/transactions or unsafe and
(ii) either a liquid assets-to-deposits ratio of less
unsound banking practices
than 10% or an operating loss
c. Are determined to be proceeds of an
- PDIC Regulatory Issuance No. 2011-01,
unlawful activity as defined in the Anti-
Annex A (for the full list)
Money Laundering Act.

• LIABILITY OF PDIC
o PDIC can only be liable if the insured bank actually receives deposit and the bank is ordered closed by BSP.
o ONLY COVERS RISK OF CLOSURE OF BANKS AS ORDERED BY BSP.
Does not cover bank losses due to theft, fire, or closure by reason of strike, existence of public disorder, revolution, or civil war.

• MAXIMUM DEPOSIT INSURANCE COVERAGE

o Effective June 1, 2009, the maximum deposit insurance coverage is P500,000 per depositor. All deposit accounts by a depositor
in a closed bank maintained in the same right and capacity shall be added together. Deposit insurance coverage is not determined
on a per-account basis. The type of account (whether checking, savings, time or other form of deposit) has no bearing on the
amount of insurance coverage.
o Under R.A. No. 9576, the PDIC may propose to adjust the MDIC, subject to the approval of the President of the Philippines, in
case of a condition that threatens the monetary and financial stability of the banking system that may have systemic
consequences.

• INSURED DEPOSITOR ESTIMATING INSURED DEPOSITS

ACCOUNT BENEFICIAL OWNER/ • SINGLE ACCOUNTS
INSURED DEPOSITOR To estimate insured deposit for single accounts, simply add the
Juan Cruz BY balances of all accounts under the depositor’s name. Regardless
Juan Cruz of the number of single accounts, the PDIC insures up to
Pedro Cruz
Juan Cruz In Trust for P500,000 per depositor, per bank.
Maria Cruz
(ITF) Maria Cruz
Juan Cruz For the • JOINT ACCOUNTS
Account of (FAO) Maria Cruz Each joint account is insured up to P500,000, which will be
Maria Cruz divided equally among the owners unless a different sharing
Maria Cruz and/or agreement is stipulated in the deposit documents found in the
Juan Cruz ITF Pedro Pedro Cruz bank’s records. A depositor’s total share in all co-owned accounts
Cruz in the same bank is insured up to the prevailing MDIC.

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RULES ON DETERMINATION OF INSURED DEPOSITS AND CALCULATION OF LIABILITIY
1. In determining such amount due to any depositor, there shall be added together all deposits in the bank maintained in the same right and
capacity for his or her benefit either in his or her own name or in the name of others.
2. Insurance coverage is per depositor not per account. The type of account (whether checking, savings, time or other form of deposit) has no
bearing on the amount of insurance coverage.
3. Individually owned deposit account is insured separately from joint accounts regardless of whether the conjunction “and”, “or”, “and/or” is
issued. In determining such amount due to the depositor, there shall be added together all deposits in the bank maintained in the same
right and capacity for his benefit either in his own name or in the name of others.
4. If the account is held jointly by (two or more natural persons) or (two or more juridical entities), the maximum insured deposit shall be
divided into as many individuals or juridical entities, unless a different sharing is stipulated in the deposit document.
5. If the account is held by juridical person jointly with a natural person, the maximum insured deposit shall be presumed to belong entirely
to the juridical person.
6. The aggregate of the interests of each co-owner over several joint accounts, whether owned by the same or different combination of
individuals, juridical persons or entities shall likewise be subject the maximum insured deposit of P500,000.
7. For “in trust for account” (ITF account), like Juan in trust for Maria, while Juan is the owner of account, the beneficiary, Maria, is the one
entitle to claim the insurance deposit.
8. Deposits in other banks are insured separately.
9. Deduct any loan of the depositor from the deposit with the insured bank to determine net insured deposit.
10. No owner/holder of any passbook, certificate of deposit or other evidence of deposit shall be recognized as a depositor entitled to the rights
provided hereunder unless the passbook, certificate of deposit or other evidence of deposit is determined by the Corporation to be an
authentic document or record of the issuing bank.

EXAMPLES: SINGLE ACCOUNTS / SOLE PROPRIETORSHIP / "BY" ACCOUNTS / "ITF" ACCOUNTS 2

CASE 1: SINGLE ACCOUNT/S

All the four deposit accounts (i.e., Name of Depositor/ Beneficial Type of Account
BALANCE INSURED UNINSURED
Account Nos. 1 to 4) are owned Owner Deposit No.
by the same person, Juan Dela Juan Dela Cruz Savings
1
Cruz, and maintained in the same (Maintained in the Home Office) Deposit 100,000 100,000
Bank (Head Office and all its Juan Dela Cruz Time
2
Branches), thus, the balance of (Maintained in the Home Office) Deposit 500,000 400,000 100,000
the accounts will be added Juan Dela Cruz Demand
3
together, as they are maintained (Maintained in the Makati Branch) Deposit 100,000 100,000
in the same right and capacity, Juan Dela Cruz Time
4
regardless of account type and (Maintained in the Manila Branch) Deposit 200,000 200,000
banking unit/branch. TOTAL 900,000 500,000 400,000

CASE 2: SINGLE, “ITF” and “BY” ACCOUNTS

NSURED
Name of Depositor/ Beneficial Type of Account UNINSURED
BALANCE
Owner Deposit No. Dela Cruz
A sole proprietor is wholly Juan
Flower Shop
owned by the owner, hence, the
Dela Cruz Flower Shop (Account Savings
Juan Dela Cruz 1
No. 4) owned by Juan Dela Cruz Deposit 100,000 100,000
will be added to his first three Juan Dela Cruz Time
2
accounts as all of them (Account Deposit 400,000 400,000
Nos. 1 to 4) are maintained in the Juan Dela Cruz Demand
3
same right and capacity. The total Deposit 300,000 300,000
amount insured cannot exceed Dela Cruz Flower Shop
Savings
P500,000.00 (Sole Proprietorship 4
Deposit
by Juan Dela Cruz) 100,000 100,000
TOTAL 900,000 900,000 -
INSURED 500,000 -
UNINSURED 400,000 -

CASE 3: SINGLE, “ITF” and “BY” ACCOUNTS

NSURED
The single account (Acc No. 1) is Name of Depositor/ Beneficial Type of Account
BALANCE UNINSURED
under his name alone and the Owner Deposit No.
Juan Antonio
other two are "By" accounts
(Account Nos. 3 and 4) which are Savings
Juan Dela Cruz 1
owned by him as the PRINCIPAL Deposit 200,000 200,000
DEPOSITOR or BENEFICIAL Juan Dela Cruz ITF Time
2
OWNER while Maria Dela Cruz Antonio Dela Cruz Deposit 400,000 400,000
and Pedro Dela Cruz ACTED AS Juan Dela Cruz BY Demand
3
HIS AGENTS only. Maria Dela Cruz Deposit 500,000 500,000
Juan Dela Cruz BY
Time
Antonio Dela Cruz on the other Maria Dela Cruz or 4
Deposit
hand has only one account Pedro Dela Cruz 500,000 500,000
(Account No. 2), an "ITF" account TOTAL 1,600,000 1,200,000 400,000
in which Antonio is the INSURED 500,000 400,000
PRINCIPAL OR BENEFICIAL UNINSURED 700,000 -
OWNER and Juan acted as
AGENT.

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Adapted from PDIC’s website: https://www.pdic.gov.ph/di_howtofileclaims_s
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EXAMPLES: JOINT ACCOUNTS 3

CASE 4: Single Account and Joint Account/s

Share in the INSURED Portion of Share in the UNINSURED Portion of
Name of Depositor/ Type of Account
BALANCE the Deposit the Deposit
Beneficial Owner Deposit No.
Savings
Juan Dela Cruz 1
Deposit 600,000 500,000 100,000
Juan Dela Cruz and Time
2
Maria Dela Cruz Deposit 500,000 250,000* 250,000*
Juan Dela Cruz or Demand
3
Pedro Dela Cruz Deposit 800,000 250,000** 250,000** 150,000** 150,000**
TOTAL 1,900,000 1,000,000 250,000 250,000 250,000 - 150,000
INSURED DEPOSIT
For Single Account 500,000 - -
For Joint Account 500,000 250,000 250,000
UNINSURED DEPOSIT
For Single Account 100,000 - -
For Joint Account 250,000 - 150,000

*Account No. 2: Juan Dela Cruz and Maria Dela Cruz P250,000
P500,000
500,000/2 = 250,000 Juan Dela Cruz
P800,000
**Account No. 3: Juan Dela Cruz or Pedro Dela Cruz P250,000
INSURED
INSURED = 500,000/2 = 250,000 Pedro Dela Cruz
UNINSURED = (800,000-500,000)/2 = 150,000 Juan Dela Cruz or
TO ILLUSTRATE: P150,000
Pedro Dela Cruz
ACCOUNT #3 P300,000 Juan Dela Cruz

P150,000
UNINSURED
Pedro Dela Cruz

CASE 5: Accounts Jointly Owned by Individuals or Natural Persons

Share in the INSURED Portion of Share in the UNINSURED Portion of
Name of Depositor/ Type of Account
BALANCE the Deposit the Deposit
Beneficial Owner Deposit No.
Savings
Juan Dela Cruz 1
Deposit 500,000 500,000
Juan Dela Cruz or Savings
2
Maria Dela Cruz Deposit 600,000 250,000* 250,000* 50,000* 50,000*
Juan Dela Cruz and Time
3
Pedro Dela Cruz Deposit 500,000 250,000 250,000
Juan Dela Cruz or
Time
Maria Dela Cruz or 4
Deposit
Pedro Dela Cruz 450,000 -** 150,000** 150,000** 150,000** - -
TOTAL 2,050,000 1,000,000 400,000 400,000 200,000 50,000
INSURED DEPOSIT
For Single Account 500,000 - -
For Joint Account 500,000 400,000 400,000
UNINSURED DEPOSIT
For Single Account - - -
For Joint Account 200,000 50,000 -

*Account #2: **Account #4: Total Deposit = 450,000

Insured = 500,000/2 = 250,000 Share of Juan Dela Cruz = 450,000 /3 = 150,000 (uninsured)
Uninsured = 100,000/2 = 50,000 Juan already reached 500k MIDC for joint accounts
Share of Maria Dela Cruz = 450,000 /3 = 150,000 (insured)
Share of Pedro Dela Cruz = 450,000 /3 = 150,000 (insured)

CASE 6: Accounts Jointly Owned by Individuals/Natural Persons and JURIDICAL Person/Entities

Share in the INSURED Portion of
Name of Depositor/ Type of Account
BALANCE the Deposit
Beneficial Owner Deposit No.
Juan Maria XYZ Corp. ABC Corp.
Juan Dela Cruz or Savings
1
Maria Dela Cruz Deposit 500,000 250,000 250,000
Time
XYZ Corporation 2
Deposit 500,000 500,000
Juan Dela Cruz and Time
3
ABC Corporation Deposit 500,000 500,000*
TOTAL 1,500,000 250,000 250,000 500,000 500,000
Insured Deposits 250,000 250,000 500,000 500,000
*Account #3:
For joint accounts between natural and juridical person, the MDIC shall be presumed to belong entirely to the juridical person.

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Adapted from PDIC’s website: https://www.pdic.gov.ph/di_howtofileclaims_j
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COMMENCEMENT OF LIABILITY [Sec. 21(a)]
The Corporation shall commence the determination of insured PDIC AS RECEIVER (LIQUIDATOR) [Sec. 12]
deposits due the depositors of a closed bank upon its actual
takeover of the closed bank. The Corporation shall give notice ACTUAL TAKEOVER
to the depositors of the closed bank of the insured deposits due Determination of actual
them by whatever means deemed appropriate by the Board of BANK CLOSURE insured deposit WINDING-UP
by BSP MONETARY BOARD [Sec. 21(a)]
Directors: Provided, That the Corporation shall publish the
notice once a week for at least three (3) consecutive weeks in
a newspaper of general circulation or, when appropriate, in a
Notice to depositors of a closed bank,
newspaper circulated in the community or communities where PUBLISH for 3 CONSECUTIVE WEEKS
the closed bank or its branches are located.
"takeover" refers to the act of physically taking possession and control of the premises, assets and affairs of a closed bank
for the purpose of liquidating the bank.

OTHER CONCEPTS:
• SPLITTING OF DEPOSITS
Splitting of deposits occurs whenever a deposit account with an outstanding balance of more than the statutory maximum amount of
insured deposit maintained under the name of natural or juridical persons is broken down and transferred into two (2) or more accounts
in the name/s of natural or juridical persons or entities who have no beneficial ownership on transferred deposits in their names within one
hundred twenty (120) days immediately preceding or during a bank-declared bank holiday, or immediately preceding a closure order issued
by the Monetary Board of the Bangko Sentral ng Pilipinas for the purpose of availing of the maximum deposit insurance coverage.

Elements. The elements of Deposit Splitting are as follows: [All should be present]
1. Existence of source account/s in a bank with a balance or aggregate balance of more than the MDIC;
2. There is a break up and transfer of said account/s into two or more existing or new accounts in the name of another
person/s or entity/entities;
3. The transferee/s have no Beneficial Ownership over the transferred funds; and
4. Transfer occurred within 120 days immediately preceding or during a bank-declared bank holiday, or immediately
preceding bank closure.

The bank, its directors, officers, employees, or agents are prohibited from and shall not in any way participate or aid in, or otherwise abet
Deposit Splitting activities as herein defined, nor shall they promote or encourage the commission of Deposit Splitting among the bank's
depositors. The approval by a bank officer or employee of a transaction resulting to Deposit Splitting shall be prima facie evidence of
participation in Deposit Splitting activities.
Where a deposit account/s with an outstanding balance of more than the maximum deposit insurance coverage is/are broken up
and transferred to one or more account/s, PDIC shall recognize the transferor as the beneficial owner of the resulting deposit
accounts entitled to deposit insurance, unless the transferee/s can prove that:
1. The break-up and transfer of Legitimate Deposit to the transferee is for a Valid Consideration
2. The details or information for the transfer, which establish the validity of the transfer from the transferor to the
transferee, are contained in any of the Deposit Account Records of the bank
3. Copies of documents, which show the details or information for the transfer, such as but not limited to contracts,
agreements, board resolutions, orders of the courts or of competent government body/agency, are in the custody or
possession of the bank upon takeover by PDIC.
4. He/she is a Qualified Relative of the transferor, in which case PDIC shall recognize the transferee as the beneficial owner
of the resulting deposit accounts. Relationship shall be proven by relevant documents such as, but not limited to, birth
certificates and marriage certificates.4
Qualified Relative = second degree of consanguinity or affinity.
Illustration: (Based on a Supreme Court Ruling 5)
Bank Closure = Involuntary
120 Days before Bank Holiday = Voluntary

Can still be Splitting of Deposits: SPLITTING OF DEPOSIT (presumed if all are present)
Unless:
1. Source Account greater than MDIC (> 500,000)
1. Valid Consideration
2. There s a break-up of accounts into two or more existing or
2. Contained in Deposit Account records of Bank
3. Copies of documents (proof of transactions) is in the new accounts in the name of another person/s or entity/
Possession of bank upon takeover by PDIC entities
4. Qualified Relative = second degree 3. Transferee have no beneficial ownership
4. Transfer within 120 days preceding or during bank-declared
bank holiday, or immediately preceding bank closure.
• TERMINATION OF INSURED STATUS OF A BANK [Sec. 8 (b)]
DEPOSITS EXISTING AT
EFFECTIVE DATE
Examination of PDIC: = INSURED FOR 180 DAYS
Directors or agents committed, If FAIL or REFUSE to TERMINATION OF AFTER TERMINATION
are committing or about to comply INSURED STATUS OF
commit unsafe and unsound within 30 days BANK
DEPOSITS MADE AFTER
banking practice
EFFECTIVE DATE
= NO LONGER INSURED

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PDIC Regulatory Issuance No. 2009-03
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Carlito Linsangan v. Philippine Deposit Insurance Corporation, G.R. No. 228807, February 11, 2019.
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TWO TYPES OF CLAIMS TO BE MADE IN PDIC Creditor refers to any individual or
entity with a valid claim against the
P500,000 DEPOSIT INSURANCE CLAIMS assets of the closed bank. Creditor
P800,000 filed within two (2) years from the date of takeover also include depositors with
by PDIC of the closed bank. deposit that exceed MDIC of
INSURED [Sec. 21 (e)] P500,000.
Juan Dela Cruz
Savings Creditor’s claims filed beyond this
CREDITOR S CLAIM AGAINST CLOSED BANK S ASSETS
Account P300,000 deadline shall be disallowed.
Filed within 60 days from the date of publication of
Creditors and uninsured depositors
Notice of Closure
UNINSURED may then file their claims with the
[Sec. 16 (k)(1)] liquidation courts constituted for
the purpose of liquidating the
NOTE: Depositors with balances more than the MDIC and who have filed their deposit insurance claims closed banks.
within 60 days from the publication date of the Notice to Creditors are deemed to have already filed their
claims against the assets of the closed bank.6

WHAT HAPPENS IF THE DEPOSITOR FAILS TO FILE A CLAIM WITHIN 2 YEARS?

Unless otherwise waived by the Corporation, if the depositor in the closed bank shall fail to claim his insured deposits with the Corporation within
two (2) years from actual takeover of the closed bank by the receiver, or does not enforce his claim filed with the Corporation within two (2) years
after the two-year period to file a claim as mentioned hereinabove, all rights of the depositor against the Corporation with respect to the insured
deposit shall be barred; however, all rights of the depositor against the closed bank and its shareholders or the receivership estate to which the
Corporation may have become subrogated, shall thereupon revert to the depositor. Thereafter, the Corporation shall be discharged from any liability
on the insured deposit.

WHAT HAPPENS UPON THE PAYMENT OF PDIC TO DEPOSITOR’S INSURANCE CLAIM?

The Corporation, upon payment of any depositor as provided for in Section 19 of this Act, shall be subrogated to all rights of the depositor against
the closed bank to the extent of such payment. Such subrogation shall include the right on the part of the Corporation to receive the same dividends
and payments from the proceeds of the assets of such closed bank and recoveries on account of stockholders’ liability as would have been payable
to the depositor on a claim for the insured deposits: Provided, That such depositor shall retain his or her claim for any uninsured portion of his or her
deposit, which legal preference shall be the same as that of the subrogated claim of the Corporation for its payment of insured deposits. All payments
by the Corporation of insured deposits in closed banks partake of the nature of public funds, and as such, must be considered a preferred credit in
the order of preference under Article 2244 (9) of the New Civil Code.

WHEN SHALL DEPOSIT INSURANCE BE PAID BY PDIC?

Six (6) months from the date of filing of claim for insured deposit
Failure to settle the claim, within six (6) months from the date of filing of claim for insured deposit, where such failure was due to grave
abuse of discretion, gross negligence, bad faith, or malice, shall, upon conviction, subject the directors, officers or employees of the
Corporation responsible for the delay, to imprisonment from six (6) months to one (1) year: Provided, furthermore, That the period shall
not apply if the validity of the claim requires the resolution of issues of facts and or law by another office, body or agency including the case
mentioned in the first proviso or by the Corporation together with such other office, body or agency.

REMEDIES OF THE DEPOSITOR FOR DENIED CLAIM:

DENIED DEPOSIT INSURANCE CLAIMS [RULE III, Sec. 3]
If a deposit insurance claim is denied, the concerned depositor may file within sixty (60) days from receipt of the denial, a verified
request for reconsideration based on new evidence, together with affidavit/s and other document/s in support of the claim.

DENIED CLAIMS AGAINST CLOSED BANK’S ASSET [Sec. 16 (k)]

Claims denied by the receiver shall be filed with the liquidation court within sixty (60) days from receipt of the final notice of
denial of claim.

DEPOSIT INSURANCE CLAIMS

• WHO ARE REQUIRED TO FILE CLAIMS?

1. Depositor
a. With valid deposit accounts with balances of more than P100,000.
b. With incomplete or outdated mailing addresses in the bank’s records, or failed to update these through the
submission of a Mailing Address Update Form (MAUF) to PDIC.
c. With outstanding obligations with the closed bank, either as a borrower, co-maker, or spouse of a borrower.
d. With accounts maintained under a business or organization name, regardless of account type and balance.
e. With accounts not eligible for early payment regardless of account type and balance.
f. With accounts not eligible for early payment, regardless of the type of account and account balance, based on
validation results
2. Legal Heirs of deceased depositors

• WHO ARE NOT REQUIRED TO FILE CLAIMS?

Filing of claims for deposit insurance is waived for depositors with balances of ₱100,000 and below.
Provided all the following conditions are met:
1. They have no loan obligations with the closed bank;
2. They have complete and updated addresses in the bank records, or have updated these through the PDIC Mailing
Address Update Form (MAUF)
3. Their accounts are not business entities.
Deposit insurance payments for waived filing are sent directly to the depositors’ registered mailing addresses.

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PDIC Guide: Filing Claims against Closed Bank’s Asset
https://www.pdic.gov.ph/files/Filing%20Claims%20Against%20Closed%20Banks%20Assets.pdf
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STEPS IN FILING DEPOSIT INSURANCE CLAIMS TO PDIC
1. Prepare the Required Documents (only claims with complete requirements will be accepted):
a. Properly filled-out, duly signed, and notarized Claim Form, which is available
at the closed bank’s premises or the PDIC website at bit.ly/PDICClaimForm . Who should sign the claim form?
The signature on the Claim Form should be the same with the depositor’s i. DEPOSITOR of the account - for
signature in the closed bank’s records and in his/her IDs. depositors 18 years old and above
b. Original evidence of deposit such as Savings Passbook, Certificate of Time ii. PARENT - if the depositor is below 18
Deposit, bank statement, used or unused checks, and ATM card. years old
c. One (1) valid photo-bearing ID with signature of the depositor/claimant. iii. AGENT - in the case of “By” accounts
However, depositors are encouraged to submit two (2) valid IDs to facilitate iv. TRUSTEE - in the case of “In Trust For
processing of claims in case of discrepancies in signature against the bank’s (ITF) and For the Account Of (FAO)”
records. accounts
d. For depositors below 18 years old, a photocopy of the Birth Certificate from v. EACH DEPOSITOR - in the case of joint
the Philippine Statistics Authority or a duly certified copy issued by the Local accounts such as “Or”, “And/Or” or
Civil Registrar, and a valid ID of the parent/guardian. “And” accounts
e. Original copy of a notarized/authenticated Special Power of Attorney (SPA) vi. AUTHORIZED REPRESENTATIVE/S - to
for claimants who are not the signatories in the bank records. In the case of cover signatories for business entities,
a minor depositor, the SPA must be executed by the parent. deceased depositors, and depositors
with a Special Power of Attorney (SPA)
2. File the Claim:
a. In person
b. Through mail or courier Note: PDIC may require additional documents during the processing of claims.
c. Via E-mail

HOW IS PAYMENT MADE BY PDIC?

1. CASH
2. By making available to each depositor a transferred deposit in another insured bank in an amount equal to insured deposit of such depositor:
Depositors may choose from any of the following payment modes on the Deposit Insurance Payment Option (DIPO) form
accompanying the Claim Form:
a) Credit to your deposit account with other banks
b) Credit to your e-wallet account, e.g., G-Cash, Maya, and DCPay
c) Cash Over the Counter at designated Land Bank of the Philippines (LBP) branches
d) LBP Cash Cards
e) Outgoing Telegraphic Transfers (OTT) for depositors outside the country
f) Check/Cheque

For the convenience of depositors, the PDIC pays deposit insurance claims onsite, usually at the closed bank premises. Onsite, valid claims
with complete requirements are usually paid on the same day the claim is filed. The schedule of the claims settlement operations (CSO) is
announced through a Notice to Depositors published in national or local newspapers, radio announcements, and through the PDIC website
and social media accounts.

STEPS IN CLAIMS AGAINST CLOSED BANK’S ASSETS TO PDIC

1. Prepare the Required Documents
ASSET DISTRIBUTION PLAN
a. Properly filed out creditor’s Claim Form available at the closed bank’s
refers to the plan of distribution of the assets of
premises or at the PDIC website at bit.ly/PDICCreditorsClaim
a closed bank to its creditors, based on its
b. Photocopy of valid ID
estimated realizable value as of a certain cut-off
c. Copy of the Secretary’s Certificate authorizing the representative to file
date, prepared in accordance with the Rules on
claim (for corporate claimants only)
Concurrence and Preference of Credits under
d. Proofs of deposit, e.g. passbook, unused check, certificate of time deposit,
the Civil Code or other laws.
ATM card (For depositors with uninsured deposit only)
e. Photocopies of contracts evidencing claims such as, but not limited to:
An asset distribution plan may be partial when
i. Purchase order
it pertains to the distribution of a portion or
ii. Delivery receipt
some of the assets of the closed bank, or final
iii. Sales invoice
when it pertains to the distribution of all the
iv. Official receipt (for partial payments or downpayments)
assets of the closed bank.
2. File the Claim
a. In person
b. Through mail or courier
c. Via E-mail

NOTE: The settlement of Creditor’s Claims shall be based on the Rules of Preference and Concurrence of Credits under the Civil Code of the
Philippines, as well as the approval of a closed bank’s asset distribution plan by the designated liquidation court.

PDIC as CO-REGULATOR
Sec. 9 (8) – Examination and Exemption in Bank Secrecy Law
To examine the records and books of accounts and require information and reports from depository institutions in case there is a finding of
fraud or unsafe or unsound banking related to deposit-taking:
o Notwithstanding the provisions of Republic Act No. 1405, as amended, Republic Act No. 6426, as amended, Republic Act No.
8791, and other laws, the Corporation and/or the Bangko Sentral ng Pilipinas, may inquire into or examine deposit accounts and
all information related thereto in case there is a finding of unsafe or unsound banking practice:
o To avoid overlapping of efforts, the examination shall maximize the efficient use of the relevant reports, information, and findings
of the Bangko Sentral ng Pilipinas, which it shall make available to the Corporation.

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PDIC as RECEIVER (LIQUIDATOR)

LIQUIDATION OF CLOSED BANKS (Sec. 12)

Whenever a bank is ordered closed by the Monetary Board, the Corporation shall be designated as receiver and it shall proceed with the takeover
and liquidation of the closed bank in accordance with this Act. For this purpose, banks closed by the Monetary Board shall no longer be rehabilitated.

• PDIC, as receiver, shall control, manage and administer affairs of the closed bank. (effective immediately upon takeover)
• Articles of Incorporation, By-laws of closed banks are suspended.
• Powers, allowances, renumeration of directors, officers, and stockholders are suspended.
• The assets of the closed bank shall be deemed in custodia legis in the hands of the receiver, and as such, these assets may not be subject
to attachment, garnishment, execution, levy or any other court processes.

[Sec. 13] In addition to the powers of a receiver provided under existing laws, PDIC is empowered to:
1. Represent and act for and on behalf of the closed bank
2. Gather and take charge of all the assets, records and affairs of the closed bank, and administer the same for the benefit of its creditors
3. Convert the assets of the closed bank to cash or other forms of liquid assets, as far as practicable: Provided, That the Corporation is
authorized to sell assets of closed banks, which are held by the Corporation as receiver, to a Financial Institutions Strategic Transfer
Corporation (FISTC), in accordance with the provisions of Republic Act No. 11523 or the “Financial Institutions Strategic Transfer (FIST) Act’.
For this purpose, the Board of Directors shall be the appropriate regulatory authority and shall promulgate the necessary implementing
rules and regulations.
4. Bring suits to enforce liabilities of the directors, officers, employees, agents of the closed bank and other entities related or connected to
the closed bank or to collect, recover, and preserve all assets, including assets over which the bank has equitable interest;
5. Appoint or hire persons or entities of recognized competence in banking, finance, asset management or remedial management, as its
deputies, assistants or agents, to perform such powers and functions of the Corporation as receiver of the closed bank, or assist in the
performance thereof
6. Appoint or hire persons or entities of recognized competence in forensic and fraud investigations
7. Pay accrued utilities, rentals and salaries of personnel of the closed bank for a period not exceeding three (3) months, from available funds
of the closed bank
8. Collect loans and other claims of the closed bank and for this purpose, modify, compromise or restructure the terms and conditions of such
loans or claims as may be deemed advantageous to the interests of the creditors of the closed bank
9. Hire or retain private counsel as may be necessary
10. Borrow or obtain a loan, or mortgage, pledge or encumber any asset of the closed bank, when necessary to preserve or prevent dissipation
of the assets, or to redeem foreclosed assets of the closed bank, or to minimize losses to its depositors and creditors
11. If the stipulated interest rate on deposits is unusually high compared with prevailing applicable interest rates, the Corporation as receiver,
may exercise such powers which may include a reduction of the interest rate to a reasonable rate: Provided, that any modifications or
reductions shall apply only to earned and unpaid interest
12. Utilize available funds of the bank, including funds generated by the receiver from the conversion of assets to pay for reasonable costs and
expenses incurred for the preservation of the assets, and liquidation of, the closed bank, without need for approval of the liquidation court.
For banks with insufficient funds, the Corporation is authorized to advance the foregoing costs and expenses, and collect payment, as and
when funds become available.
13. Charge reasonable fees for the liquidation of the bank from the assets of the bank: Provided, that payment of these fees, including any
unpaid advances under the immediately preceding paragraph, shall be subject to approval by the liquidation court.
14. Distribute the available assets of the closed bank, in cash or in kind, to its creditors in accordance with the Rules on Concurrence and
Preference of Credits under the Civil Code or other laws.
15. Dispose records of the closed bank that are no longer needed in the liquidation in accordance with guidelines set by the PDIC Board of
Directors, notwithstanding the laws on archival period and disposal of records.
16. Exercise such other powers as are inherent and necessary for the effective discharge of the duties of the Corporation as receiver.

FINAL ASSET DISTRIBUTION PLAN [Sec. 16 (m-o)]

(m) A claim whose validity has not yet been determined with finality at the time of the submission of the final asset distribution plan, either by
reason of a pending suit or for whatever reason, shall be considered as contingent claim and shall not be paid under the proposed final
asset distribution plan.
(n) Upon finality of the order approving the final asset distribution plan, the petition for assistance in the liquidation of a closed bank shall
henceforth be, for all intents and purposes, considered closed and terminated and the receiver, its officers, employees or agents, are
forever discharged from any and all claims and/or liability arising from or in connection with the liquidation of the closed bank.
(o) The receiver shall submit a final report on the implementation of the approved final asset distribution plan to the Monetary Board and the
SEC after the expiration of the winding-up period provided in this Act.

WINDING-UP [Sec. 16 (q-t)]

(q) The creditors shall have a period of six (6) months from the date of publication of notice of the approval by the court of the final asset
distribution plan of the closed bank within which to claim payment of the principal obligations and surplus dividends. During this six-month
period, the receiver shall hold as trustee the assets allocated in the final asset distribution plan for said creditors.
Failure by the creditor to comply with the documentary requirements within the prescribed period and/or refusal to accept the asset as
payment shall be deemed as abandonment or waiver of his or her right to payment.
(r) The individual stockholders of record or their duly-authorized representative or the court-appointed stockholders’ representative shall have
a period of six (6) months from publication of notice of the approval by the court of the final asset distribution plan of the closed bank
within which to claim the residual assets. During this six-month period, the receiver shall hold as trustee the assets allocated in the final
asset distribution plan for said stockholders of record.
Failure by the individual stockholders of record or their duly authorized representative or the court-appointed stockholders’ representative
to comply with the documentary requirements within the prescribed period and/or refusal to accept the residual assets in kind shall be
deemed as abandonment or waiver of right to receive the residual assets.
(s) After the lapse of the six-month period provided in paragraphs (q) and (r) of this Section, all assets which remain unclaimed by the creditors
and/or stockholders of record shall be turned over to the Bureau of Treasury.
(t) The receiver shall continue to keep all the pertinent records of the closed bank for a period of six (6) months from the date of publication
of the approval of the final asset distribution plan. After the lapse of this period, the receiver is authorized to dispose of the same in
accordance with the rules and regulations to be prescribed by the receiver.

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