Cayetano pushes for immediate payment of deposit insurance

Sen. Renato Cayetano has urged his colleagues in Congress to amend the charter of the state-run Philippine Deposit Insurance Corp. (PDIC) so that it would be compelled to pay all insured deposits of closed banks within 60 days upon demand of payment by account holders.

Cayetano made the call shortly after learning that thousands of account holders of banks that failed five to seven months ago have yet to be paid their deposit insurance.

He cited the case of Prime Savings Bank Inc., which was ordered closed by Bangko Sentral ng Pilipinas last Jan. 7.

To date, he said, the PDIC has yet to complete payment of 60,000 accounts insured up to P1.4 billion.

He also cited the case of the Rural Bank of San Miguel Inc., which was ordered closed Jan. 21. The PDIC earlier announced it would start paying off insured depositors of the Bulacan-based bank by the first week of June.

Cayetano said insured account holders of four other rural banks based in Bulacan, Pangasinan and Aklan are getting paid only this month. The banks were closed late last year or early this year.

"Deposit insurance is meant to provide account holders immediate relief, so payment of the maximum insurance should be made as quickly as possible," Cayetano said.

According to him, among the hardest hit by the recent bank failures, including the collapse of Urban Banking Corp., were senior citizens who invested their retirement gratuities and savings in deposit accounts.

"Being senior citizens, they no longer earn regular income and therefore have to rely on their bank savings for their daily sustenance," Cayetano pointed out.

He added: "It is bad enough that each depositor is insured only up to P100,000. Must we also unreasonably delay payment of such insurance."

Cayetano is the autor of a bill that seeks to increase the maximum deposit insurance to a higher minimum range of P100,000 to P175,000, depending on the amount deposited.