Congress has finally ratified a bill increasing the MDIC from P100,000 to P250,000 as well as other amendments to the PDIC charter.
The DIF, which is the financial source for payments to bank depositors and managed by the PDIC, is presently at the P37-billion level. At an annual growth of P4.5 billion to P5 billion, it is expected to reach P100 billion within the next 10 to 15-years to service the new MDIC.
PDIC officials said that should major bank failures occur in the next few years, it would be necessary to issue bonds to be able to ensure the financial health of the DIF.
But an increase in the risk management and examination capabilities and powers of the PDIC would ensure the health and viability of the banking system, which in turn, would not necessitate dipping into the DIF.
However, the bill that will soon be signed into law is a "watered-down" version that has limited PDIC’s examination powers.
"It does not hit our 100-percent wish list, but it is better than no new amendments at all. It is better to have a watered-down version than not have one at all," PDIC president and chief executive officer Ricardo M. Tan said in a press briefing yesterday.
Increasing the examination and risk management capabilities of the PDIC, in cooperation with the Bangko Sentral ng Pilipinas (BSP), should result in a healthy banking system, he said.
Tan added that they have signed memorandum of agreements (MOA) for cooperation and coordination with the BSP to enforce the examination provisions of the new law.
"It also reinforces BSP’s primodial function of detecting banks engaged in unsound practices to protect the depositing public," PDIC officials added.
Meanwhile, the PDIC will hold a public bidding for its outsourcing requirements involving seven banks under receivership. The PDIC will be outsourcing certain administrative requirements that would reduce the burden as well as administrative costs for the government agency.
PDIC has 429 banking institutions for liquidation or under receivership. Of the total, 424 are for liquidation while five are under receivership of which three has been classified for rehabilitation.