PDIC to sell P267M worth of assets of closed banks

MANILA, Philippines - State-run Philippine Deposit Insurance Corp. (PDIC) is set to auction off P266.8 million worth of residential as well as mixed-use industrial and agriculural properties all over the country next month to beef up its buffer fund used to pay off the insurance claims of depositors of closed problematic banks.

PDIC said in a statement that it would sell acquired assets with estimated total value of P266.8 million consisting of 59 residential, eight mixed use and two industrial or agricultural properties on Oct. 25.

It added that the government-owned deposit insurer would showcase various assets for disposal during the 6th Housing Fair organized by the Housing and Urban Development Coordinating Council next month.

PDIC earlier sold nine assets of closed banks consisting of six residential and three commercial properties worth P28.5 million through a public bidding.

During the public bidding, PDIC offered 54 properties worth P92.2 million of 15 closed banks for sale. The properties consisted of 50 residential, commercial, and subdivision lots valued at P91.1 million as well as four vehicles worth P1.1 million.

The agency said it would accept offers to buy the remaining properties under negotiated sale basis and would evaluate these in line with government-prescribed guidelines.

PDIC, as liquidator of closed banks, is tasked to dispose of the closed banks’ assets to settle claims of the closed banks’ creditors.

Earlier, PDIC executive vice president for receivership and liquidation sector Cristina Que-Orbeta said in an interview with reporters that the agency has enough buffer to service all the insurance claims of closed banks as its deposit insurance fund (DIF) currently stands at P67 billion.

The DIF is the funding source for deposit insurance claims payment.

Former President and now Pampanga Rep. Gloria Macapagal Arroyo signed Republic Act 9576 last 2009 doubling the maximum deposit insurance coverage (MDIC) for bank deposits to P500,000 to promote and safeguard the interests of the depositing public.

The amended charter also granted PDIC powers to enhance its oversight on banks as well as mitigate the moral hazard posed by the increased coverage to the DIF and at the same time strengthened the agency s regulatory oversight on banks through new authorities such as the conduct of special bank examinations, determination of products eligible for deposit insurance and examination of deposit accounts of ailing banks.

Latest data showed that the number of banks ordered closed by the Bangko Sentral ng Pilipinas (BSP) and placed under the receivership of PDIC increased by 29 percent to 22 in the first eight months of the year from 17 in the same period last year as more problematic banks were ordered closed by the Bangko Sentral ng Pilipinas (BSP).