Excess PDIC funds remitted to NG ‘unrestricted’ – DOF

MANILA, Philippines — The Department of Finance (DOF) clarified yesterday that the P107.23 billion remitted by the Philippine Deposit Insurance Corp. (PDIC) to the national government (NG) was classified as “unrestricted,” allowing it to be used for other purposes.

The DOF said the money remitted by the PDIC was classified as unrestricted under a circular it issued earlier regarding the idle funds of various state-owned enterprises.

Under the circular, the state entities’ fund balance was defined as unrestricted fund that includes cash on hand, cash in banks, investment  in government securities and other fund balances.

“These are unrestricted, meaning they are free to use for other purposes. These are composed of cash and investment balances and are net of restricted funds,” the DOF said.

The DOF argued that the PDIC still has a reserve fund, or the deposit insurance fund (DIF), of about P202.8 billion, which is equivalent to 5.8 percent of the country’s estimated insured deposits. The amount is well within the PDIC board’s target range of five to eight percent.

“Unlike unrestricted funds, this is strictly reserved for specific uses like deposit insurance payouts to bank clients and financial assistance to banks during emergencies,” it said.

The DOF assured the public the PDIC’s DIF remains intact despite removing the excess of the state-owned entity.

“The DIF remains very 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,” the DOF said.

“Moreover, this means that the PDIC remittance does not compromise the soundness of the DIF which the corporation prudently manages,” it added.

The DOF noted that there is a “very minimal” chance that the PDIC would be fully utilizing its entire DIF based on historical data. The DOF added that the PDIC paid only P282.31 million as of November 2024 for claims for deposit insurance liabilities.

The DOF earlier explained that the PDIC remittance was in compliance with the Congressional mandate under the General Appropriations Act of 2024 and strictly in accordance with the opinion rendered by the Office of the Government Corporate Counsel.

The remittance has significantly contributed to funding major infrastructure and social programs of the government, such as the maintenance, repair and rehabilitation of major infrastructure facilities, according to the DOF.