PDIC assures international deposit insurers of continued reforms

MANILA, Philippines - State-run Philippine Deposit Insurance Corp. (PDIC) assured international deposit insurers that the country would continue to pursue reforms geared towards protecting depositor interests, maintaining public confidence in the financial system, and promoting financial stability in the economy.

PDIC president Jose C. Nograles said heads and representatives of member-deposit insurers of the International Association of Deposit Insurers (IADI) from the Asia Pacific, North America, Europe, and Africa discussed and assessed critical actions implemented by deposit insurers during the height of the global financial crisis in 2008.

Nograles pointed out that also discussed during the International Conference and Seminar on deposit insurance in Cebu City were the measures undertaken by deposit insurers across the region after the worldwide economic meltdown.

The Conference on Strengthening Deposit Insurance Systems in Crisis and Post-Crisis Situations included a seminar on claims management and payout operations followed the summit conference. 

He said PDIC shared with the participating senior technical officers of different deposit insurers insights and ongoing innovations and business process re-engineering on its claims settlement operations to better serve the public.

PDIC is a member of the IADI, an organization of 60 deposit insurers that aims to enhance the effectiveness of deposit insurance systems by promoting guidance and international cooperation. It is also a member of the Asia-Pacific Regional Committee. 

Nograles is a member of the IADI governing body – the executive council and is the chairman of the IADI audit committee.

IADI was at the forefront of the global financial crisis in 2008. The worst crisis to hit the world highlighted the critical role effective systems of deposit insurance play in maintaining public confidence and financial stability. IADI worked diligently to strengthen deposit insurance systems around the world during the critical period of the global turmoil.

During the height of the global financial crisis, IADI members implemented various measures to strengthen public confidence in the financial system. 

Nograles said at least 27 countries raised coverage limits and 18 have introduced a temporary blanket guarantee to give full protection to depositors. 

In the Philippines, he pointed out that PDIC supported calls for an increase in coverage limit and lobbied for the inclusion of corollary measures that comprised of institutional and financial strengthening measures to help enhance the deposit insurer’s oversight and regulatory functions, mitigate moral hazards and protect the deposit insurance fund. 

He added that Republic Act 9576 that provided for the strengthening of the PDIC institutionally and financially doubled the deposit insurance coverage to P500,000 from P250,000. It also granted PDIC the flexibility mechanism to adjust the maximum deposit insurance level when the situation calls for it.