Department of Finance (DOF) Secretary Ralph G. Recto assured that transferring P107.23 billion from the Philippine Deposit Insurance Corporation (PDIC) to the national treasury will not compromise its reserve fund.
On Jan. 16, Wednesday, the finance chief asserted that the P107.23 billion was PDIC’s excess funds, explaining that “these are unrestricted, meaning they are free to use for other purposes.”
These funds come from cash and investments after subtracting the reserve fund—amounts that are set aside for specific uses. Taking out the P107.23 billion leaves the PDIC with a reserve fund or Deposit Insurance Fund (DIF) worth P250 billion.
“Unlike unrestricted funds, this [reserve fund] is strictly reserved for specific uses, like deposit insurance payouts to bank clients and financial assistance to banks during emergencies,” Recto explained.
He earlier assured the public that the reserve funds “intended for protecting bank deposits are intact,” supporting PDIC President Roberto B. Tan’s statement that the banking sector remains in “good shape” after the reallocation.
Recto further explained that the remittance “does not compromise the soundness of the DIF which the Corporation [PDIC] prudently manages.”
“Historically, there is also a very minimal chance of fully utilizing the DIF,” the DOF said.
In November last year, the state-run company paid P282.31 million “for claims for deposit insurance liabilities.” It likewise allocates P3 billion monthly to strengthen the DIF and maintain its ratio level.
The unrestricted fund also called Fund Balance, consists of unrestricted cash, investments, and financial assets, including government securities and funds for specific purposes.
"All the GOCCs [government-owned and controlled corporations] submitted, and only PDIC and Philhealth have fund balance,” the DOF said.
In October last year, the Supreme Court (SC) issued a temporary restraining order (TRO) stopping the transfer of P89.9-billion excess Philippine funds to the Treasury.
Of the four planned transfers, P60 billion has already been moved to the national treasury, leaving only P29.9 billion with the agency.
On the concern of dividends, Recto clarified that profitable GOCCs must still remit 75 percent of their earnings, with no reductions.
“I’d rather get more dividends from performing GOCCs than raise your taxes, or additional borrowings,” Recto said.
In November 2024, the DOF raised the mandatory dividend remittances of GOCCs to the national government to 75 percent of their annual net earnings from 50 percent.