PDIC to clean up non-cash portfolio

Published December 1, 2021, 11:34 AM

by Chino S. Leyco

The Philippine Deposit Insurance Corp. (PDIC) aims to continue cleaning up its non-cash portfolio by targeting to dispose of 807 real properties and resolve 17,826 loan accounts in closed banks.

According to its report to Finance Secretary Carlos Dominguez III, the PDIC has so far resolved 66,249 loan accounts of borrowers in closed banks between 2019 and 2021.

From 2019, PDIC has disposed of 2,917 real properties, 507 of which were sold as of June 2021, its president and CEO Roberto Tan said in his report to Dominguez.

The proceeds from the disposal of the PDIC’s non-cash assets are added to the funds held in trust for closed banks to help increase the chances of closed-bank creditors and uninsured depositors to recover their funds.

Creditors’ claims are settled by PDIC as liquidator, in accordance with the rules on concurrence and preference of credits.

Tan told Dominguez, who chairs the PDIC Board, that they aim to accomplish their target of reducing its non-cash portfolio in 2021 with the adoption of its electronic bidding process for properties which started last April 8.

PDIC also implemented of its Closed Bank Loan Incentive Program (CLIP), which offers an easy payment and zero penalty initiative to borrowers of banks that were ordered closed by the Monetary Board of the Bangko Sentral ng Pilipinas.

CLIP offers substantial discounts to closed-bank borrowers with principal loan balances of P1 million and below and who will opt to pay through a one-time cash settlement.

Tan also reported that the Deposit Insurance Fund (DIF), the capital and funding source for payment of deposit insurance, continued to built up to ensure adequacy and responsiveness to insurance calls.

As of July 2021, the DIF stood at P234.84 billion, which increased by P30.7 billion or by 15 percent year-on-year.

PDIC also grew its total assets by 3.6 percent or by P10.64 billion compared with the same period in 2020, registering at P302.84 billion as of July 2021.

The growth was driven by assessment collections amounting to P29.64 billion and P6.82 billion in income on investments.

Meanwhile, liabilities were prudently managed at P68 billion as of July 2021, lower by 22.8 percent or P20.06 billion compared with the same period last year.

According to Tan, PDIC paid P470 million in insured deposits from four banks ordered closed by the Monetary Board from January to July 2021.

The Monetary Board shut down Occidental Mindoro Rural Bank, Palm Tree Bank in Cagayan de Oro City, Rural Bank of Alimodian in Iloilo, and the Rural Bank of Caloocan.

PDIC is also preparing to settle the claims on two other closed banks—the Rural Bank of Datu Paglas in Maguindanao and the Grand Agri Rural Bank in Lucena City, Quezon.

To improve the settlement of claims, Tan said the PDIC has allowed its online filing and release of payments through the Land Bank of the Philippines or through Postal Money Order or Delivery Express Mail Service.

The PDIC has also made use of digital platforms and social media networks, such as the Facebook pages of the local government units to ensure the continuous and prompt dissemination of information to depositors and its other clients.

The online electronic bidding process for real properties was also adopted to speed up the disposition of its non-cash portfolio, Tan said.