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Business

PDIC net income drops to P300M

- Ted P. Torres -
The Philippine Deposit Insurance Corp. (PDIC) reported a drastic drop in profit last year to P300 million, from P3.8 billion in 2002, as it set aside a substantial amount for provisioning for possible losses in its exposure in the banking system.

As a government arm, the PDIC was established for the protection of small bank depositors through deposit insurance, hence helping promote confidence in the stability of the domestic banking system. It is directly under the supervision of the Bangko Sentral ng Pilipinas (BSP).

The PDIC also grants financial assistance to banks in danger of closing and assumes their liabilities, in addition to making deposits, purchase of assets, or direct loan.

As of end-2003, banks under the PDIC’s coverage shrunk to 902 from 909 in end-2002 due to a number of closures. Of the total number, 42 are commercial banks, 92 are thrift banks and 768 are rural banks.

Its total resources, however, amounted to P125.78 billion by yearend or 28 percent higher than the P97.91 billion at the close of 2002.

Total deposit insurance fund likewise grew by five percent, from P36.71 billion in end-2002 to P38.72 billion last year.

PDIC senior vice president Noemi R. Javier said provisioning for insurance losses, collectible accounts, bank rehabilitation and losses on acquired assets reached over P7 billion last year.

"Provisioning or beefing the reserves is critical over income," Javier said, stressing the agency’s responsibility to the public and the banking system.

Meanwhile, total liabilities grew to P87 billion last year from P61.2 billion on loan payables to the BSP, which includes the fund’s financial assistance to banks.

Short- and long-term investments grew to P34.19 billion while financial assistance to member banks reached P68.31 billion.

Meanwhile, total revenues hit P10.53 billion, of which P4.72 billion came from assessments remitted by member banks; P4 billion from gross earnings; P1.63 billion from financial assistance; and roughly P100 million from gains in foreign currency revaluation and surplusdividends from closed rural banks.

The PDIC remitted P1.4 billion in taxes from investments and corporate income taxes.

It declared dividends to the Bureau of Treasury (BTr) worth P1.15 billion, representing P1 billion covering the balance of its 2002 dividends and P150 million representing advance dividends for 2003.

Estimated insured deposits (EID) to total deposit ratio remained at a comfortable 19 percent. EID reached P461.08 billion or three percent higher than the P445.85 billion level in 2002.

Total deposits in the system grew from P2.34 trillion in 2002 to P2.45 trillion as of end-December 2003.

vuukle comment

ASSISTANCE

BANGKO SENTRAL

BANKS

BILLION

BUREAU OF TREASURY

JAVIER

NOEMI R

PDIC

PHILIPPINE DEPOSIT INSURANCE CORP

PILIPINAS

TOTAL

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