The Philippine Deposit Insurance Corp. (PDIC) is weighing legal options to recover ₱107.2 billion in excess capital remitted to the national government, following a landmark Supreme Court ruling that disrupted the state’s strategy for tapping idle funds.

Bangko Sentral ng Pilipinas Governor Eli Remolona Jr., who chairs the PDIC board, said Tuesday, Jan. 6, that the deposit insurer’s legal team is re-evaluating the transfer after the high court ordered a similar return of funds from the Philippine Health Insurance Corp. (PhilHealth)

“In light of the Supreme Court (SC) decision, PDIC lawyers are reviewing the matter again and assessing whether the funds can be recovered. This is now under consideration,” Remolona told reporters.

The move, however, is a potential complication for the Department of Finance, which has relied on such transfers to narrow the budget deficit and fund infrastructure.

The PDIC transferred the funds to the Bureau of the Treasury last year to support the Marcos administration’s priority projects, including subways, railways, and social safety nets.

Remolona explained that while lawyers initially deemed the remittance permissible under the law, the legal landscape has shifted. The central bank chief noted that the matter is now under active consideration in light of recent judicial developments.

The remittance significantly reduced the deposit insurer’s financial cushion as PDIC President and Chief Executive Officer Roberto Tan earlier reported that the deposit insurance fund stood at over ₱250 billion in early 2025, a sharp decline from ₱310.1 billion at the end of 2023.

Despite the smaller buffer, Remolona maintained that the PDIC remains resilient, noting that internal assessments confirmed the insurer has sufficient liquidity to double the maximum deposit insurance coverage to ₱1 million from ₱500,000 this year, a move intended to bolster public confidence in the banking system.

The controversy stems from a 2024 DOF directive that pushed government-owned and controlled corporations to increase their dividend remittances to 75 percent of net earnings, up from the 50 percent mandated by Republic Act 7656.

Additionally, the government utilized a special provision in the 2024 budget to sweep “unprogrammed” funds from state agencies.

This mechanism was the same legal basis used to seize ₱60 billion from PhilHealth, a transfer the Supreme Court later moved to reverse.

If the PDIC successfully argues for a refund, it could force the national government to find alternative funding sources for its multi-billion peso infrastructure pipeline at a time when fiscal space remains tight.