Funds raised by PDIC from asset sales breach P400 million
Philippine Deposit Insurance Corporation website
MANILA, Philippines — The Philippine Deposit Insurance Corp. (PDIC) reported a 24.7 percent increase in proceeds from asset sales in 2024, augmenting the state insurer’s resources to settle the claims of clients and creditors of closed banks.
PDIC said it had raised P411.4 million after disposing of 281 properties in 2024. Broken down, 71 of the assets sold had been acquired by the insurer while the remaining 210 had been owned by closed banks.
Of the total proceeds last year, P194.9 million was generated through public biddings while P216 million was disposed through negotiated sales. As a standard procedure, unsold assets during public auctions are offered for negotiated sale.
The proceeds from these transactions are held in trust by the PDIC. The funds are used to settle claims of closed bank creditors, including depositors with uninsured deposits.
READ: PDIC paid P281.5-M in deposit insurance claims in 2024
Meanwhile, money raised from the sales of corporate assets augments the Deposit Insurance Fund (DIF), the primary source for deposit insurance claim payments.
“The PDIC remains committed to enhancing its asset disposal programs through innovative disposal strategies to attract more buyers, process streamlining to ensure efficiency and ease of transactions,” the insurer said.
Higher deposit coverage
Since March 15, the PDIC has implemented the new maximum deposit insurance coverage (MDIC) of P1 million per depositor per bank, which was double the previous protection of P500,000.
READ: PDIC doubles deposit insurance to P1M
The expanded MDIC was projected to fully insure over 147 million accounts in 2025, or 98.6 percent of the total deposit accounts in the local banking system.
In terms of amount, depositor funds amounting to P5.3 trillion will be safeguarded by the PDIC, accounting for 24.1 percent of the total deposits held by the banking sector.
To compare, the ratio of insured accounts under the old MDIC was at 97.6 percent as of December 2024. In terms of amount, the share of insured funds to total deposits was at 18.4 percent before.
At present, the PDIC collects a flat rate of one-fifth of 1 percent a year of the total deposit liability of a bank. Lenders pay this amount to the state insurer so that depositors can be reimbursed up to a certain amount if a bank is ordered closed by the Bangko Sentral ng Pilipinas.
READ: PDIC studying ‘risk-based’ pricing for deposit insurance fees
