Filipino depositors have no cause for alarm as the banking system remains stable following the Philippine Deposit Insurance Corporation's (PDIC) remittance of P107.23 billion to the Bureau of Treasury (BTr), according to the state deposit insurer's chief.
During the bankers' night hosted by the Bangko Sentral ng Pilipinas (BSP), PDIC President Roberto B. Tan told reporters that the country's banking sector is "in good shape" after the transfer, with P202.85 billion remaining in the PDIC's Deposit Insurance Fund (DIF).
"It's in good shape. I don't think there's anything to be alarmed about," Tan said, stressing that "the adequacy is more than what the directors targeted."
Tan assured the public that, in the event of risks such as a bank collapse, the PDIC "definitely" has adequate funds to protect depositors.
"Bank closures are within the jurisdiction of the central bank—and the banking system right now is very healthy based on financial indicators. There's nothing to worry about," he reiterated.
According to Tan, the P202.85-billion DIF reserve is "more than enough" based on the state deposit insurer's methodology. This amount represents 5.8 percent of the country's insured deposits, well within the PDIC Board's target range of 5 to 8 percent.
Meeting global standards
The Department of Finance (DOF) issued a statement assuring the public that the Philippines' deposit insurance levels are "consistent with international standards" even after the PDIC transferred the funds to the Treasury.
"We assure the public that after the remittance, the Deposit Insurance Fund (DIF) of the PDIC remains adequate to cover risks in the banking system and that the PDIC is still capable of delivering its services effectively, in case of insurance calls," Tan said in the statement.
"The DIF continues to be maintained within the target level set by its Board of Directors based on international best practices," he added.
According to the DOF, the PDIC's multibillion-peso remittance to the national government will fund projects designed to "spur economic activities," which are expected to lead to higher bank deposits and growth of financial institutions.
These projects include major infrastructure maintenance, rural electrification, and crisis assistance programs, as well as counterpart financing for foreign-assisted initiatives such as the Metro Manila Subway, Panay-Guimaras-Negros Island Bridges, and agricultural and coastal resiliency projects.