State-run deposit insurer Philippine Deposit Insurance Corp. said Friday the Deposit Insurance Fund climbed to P216.85 billion as of the fourth quarter of 2020.
DIF represents PDIC’s overall capacity to respond to insurance calls amid bank failures.
PDIC said it also settled 100 percent of the 7,072 valid deposit insurance claims within its target turnaround time for banks ordered closed in 2020. The prompt settlement of deposit insurance claims provides affected depositors the needed relief.
PDIC president Roberto Tan said in a report to Finance Secretary Carlos Dominguez III the DIF posted a double-digit growth of 10.3 percent or P20.33 billion from its 2019 level of P196.52 billion.
“The increase resulted in an adequacy level of 6.91 percent in terms of ratio of the DIF to the banking system’s estimated total insured deposits. The ratio was above the minimum target of 5.5 percent for 2020,” Tan said.
He said that PDIC would endeavor to maintain adequate DIF cover at prudential level.
Dominguez said PDIC’s record of performance was marked by the prudential management of the deposit insurance fund and the prompt settlement of deposit insurance claims.
The DIF consisted of reserves for insurance losses of P193.64 billion, retained earnings of P20.21 billion, and permanent insurance fund of P3.0 billion.
The World Bank said earlier that reimbursing depositors after bank failures would contribute to the stability of a financial system and build public confidence in a deposit insurance system. It said deposit insurers should have operational readiness to act quickly after a bank failure.
It said that “depositor confidence depends, in part, on knowing that adequate funds for deposit insurance would always be available to ensure the prompt reimbursement of their claims.”
PDIC said that of the total deposit insurance claims involving 7,072 deposit accounts in five banks closed in 2020, 6,733 accounts involving deposits of P100,000 and below, were settled within target turn-around-time to eligible depositors, while 339 were for deposits with balances of more than P100,000.
