MANILA, Philippines – Administration and opposition members of the House of Representatives crossed party lines yesterday and expressed support for the proposal of President Arroyo to increase the P250,000 insurance coverage of depositors in local banks.
But senators are frowning on the proposal, saying the Palace appeared to be politicking even during hard times.
“That is a correct antidote to fear, a right step which is gripping the entire gamut of our economy. A wild bank run will topple our vulnerable banking system. The increase in insurance coverage, even if banks bear additional costs, is a must,” said Isabela Rep. Giorgidi Aggabao.
Another administration lawmaker, Marikina Rep. Marcelino Teodoro, said this was “long overdue.”
Nevertheless, the neophyte lawmaker supports Mrs. Arroyo’s P1 million insurance proposal, “for this is a small effort by the government to provide security and to heighten confidence in banks by Filipino depositors.”
“Congress should carefully scrutinize and study the proposed law to enact the increase in bank insured coverage with the protection to all types of depositors,” Teodoro suggested, calling on his colleagues to provide the best safety nets possible to depositors.
No less than Speaker Prospero Nograles has filed a bill on this, with Valenzuela Rep. Rex Gatchalian, but proposed that the amount of insurance should only be doubled, from P250,000 to P500,000.
In Gatchalian’s House Bill 5348, he cited the current financial issues in the global market have necessarily raised serious concerns for local banking industry, doubting on their liquidity and exposure of assets to US financial institutions that went bankrupt.
“We cannot blame our constituents who may have saved up their hard-earned peso in banks relying in their mind and hearts that their deposits and investments would be safe. It is savings for the tuition fees of the children or the fund that will get them by after retirement. Never mind the low interest rate, as long as the money is safe,” Nograles said.
“RA 3591 establishing the PDIC somehow reassures the public that deposits will be covered by an insurance. Although this proposed amount may be minimal compared to the amounts of actual deposits, our fears of becoming empty-handed are at least assuaged,” he added.
Even members of the opposition supported the idea.
“Of course that would be better. It will protect the savings of everyone, particularly the masses. It will make us feel more secure that our money in the banks are safe,” said An Waray party-list Rep. Florencio “Bem” Noel.
“It’s better to allay fears of the depositors. It’s alarming that people might pull out their deposits because of the coming financial crisis brought about by the financial crisis in the US,” opined Anak Mindanao Rep. Mujiv Hataman.
Citizens Battle Against Corruption Rep. Joel Villanueva agreed.
“I believe that for the people to be convinced to deposit their money in the bank they should be confident of our banking system. This is where the guarantee of the government is important,” he stressed.
“If that will preempt loss of confidence in our banking system then the proposal is okay. The problem is, as usual, the source of funding to cover the increase in coverage,” Nueva Ecija Rep. Edno Joson said.
There may be problems with funding though, but he has a better suggestion.
“Siguro economic stimulus fund na lang ang concept and coverage increase is only one portion of said fund,” he said.
‘Brownie points’
However, Senators Francis Escudero and Manuel Roxas II, who both filed bills seeking to increase bank deposit insurance from P250,000 to P500,000 along with Sen. Edgardo Angara, said the P1-million increase in bank deposit insurance proposed by the Palace might be unrealistic and even put the banking industry at greater risk.
Escudero, chairman of the Senate ways and means committee, said he could not understand whether the Bangko Sentral ng Pilipinas agreed to the P1 million proposal because it could not say no to President Arroyo or it was really the more appropriate amount. – Aurea Calica