PDIC president Ricardo Tan said the amount represents part of the P609.024 million in assessment deficiencies of three foreign banks: Citibank NA, Hong Kong and Shanghai Bank Corp. (HSBC) and Bank of America.
The PDIC official said yesterday that the funds would stay in escrow until the Supreme Court resolves the conflict between foreign banks and the PDIC over differences in the interpretation of the law.
Tan said the dispute over the computation of the deposit liabilities of foreign banks has been pending resolution by the High Court for about eight years.
He explained that conflict arose from the disagreement over how to treat the so-called "due from/due to" accounts remitted by foreign banks to their head offices.
Tan said the three foreign banks have taken the position that "due to/due from" accounts should not be included in the computation of total deposit liabilities – the amount used as basis for calculating the insurance premium paid by foreign banks to the PDIC.
The PDIC, on the other hand, contested that since "due to/due from" accounts were covered by its insurance policy, it should also be included as a deposit liability and therefore covered by the premium.
Since the case was elevated to the SC, Tan said banks have agreed to maintain escrow accounts in various government banks representing part of the contested billings of the PDIC.
The PDIC’s audit report revealed that the total assessment deficiency has reached P609.024 million broken down as follows: P307.341 million from Citibank, P187.207 million for HSBC and P114.476 million for BA.
The actual escrow deposit, on the other hand, came from only two banks amounting to a total of P543.11 million. More than half came from Citibank (P353.11 million) and HSBC (P190 million).