Republic of the Philippines RECEIVED.
HOUSE OF REPRESENTATIVES Dare:
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No._5812

Introduced by HONORABLE LUIS JOSE ANGEL N. CAMPOS, JR.

EXPLANATORY NOTE

Banking is impressed with public interest. As such, the fiduciary nature of
banking recognized by the State requires high standards of integrity and
performance (The Philippine General Banking Law). It is, therefore, imperative to
maintain faith and confidence in the country’s banking system as an indispensable
element of the national economy and its continued growth and development.

Towards this end, the Government has established a mechanism that will
promote and safeguard the interests of the depositing public by instituting
insurance coverage on bank deposits [Republic Act No. 3591, as amended,
otherwise known as the Philippine Deposit Insurance Corporation (PDIC) Charter].

At present, the PDIC pays a maximum deposit insurance of Php500,000.00
per depositor of a closed/failed bank. This amount was fixed more than a decade
ago, in June 2009, by Republic Act No. 9576, which increased the amount provided
for in Republic Act No. 3591.

This bill seeks to further increase the maximum bank deposit insurance to
One million pesos (Php1,000.000.00) per depositor to adjust for inflation, thereby
protecting a greater number of depositors. This bill is also necessitated by the
closure of 41 banks (mostly rural lenders) from 2017 to 2019 alone, which affected
tens of thousands of depositors.

According to the PDIC, the Philippine banking system had Php12.7 trillion in
total deposits as of December 31, 2018, which accounts for an 8.8% increase from
Php11.7 trillion the previous year. These deposits are spread over 62.9 million
accounts in 2018, accounting for a 10.1% increase from 57.1 million accounts the
previous year.

In light of the foregoing, the approval of this bill is earnestly sought.

LUIS JOSE ANGEL N. CAM!


Republic of the Philippines
HOUSE OF REPRESENTATIVES:
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 5812

Introduced by HONORABLE LUIS JOSE ANGEL N. CAMPOS, JR.

AN ACT FURTHER INCREASING THE MAXIMUM DEPOSIT INSURANCE
COVERAGE, AMENDING FOR THIS PURPOSE REPUBLIC ACT NO. 3591, AS
AMENDED, OTHERWISE KNOWN AS THE PHILIPPINE DEPOSIT INSURANCE
CORPORATION (PDIC) CHARTER.

Be it enacted by the Senate and the House of Representatives in Congress
assembled:

SECTION 1. Section 5(j) of Republic Act No. 3591, as amended, otherwise
known as the PDIC Charter, is hereby further amended to read as follows:

Section 5. (j) The term insured deposit means the amount due to any bonafide
depositor for legitimate deposits in an insured bank as of the date of closure but not
to exceed One million pesos (Php1,000,000.00). Such amount shall be determined
according to such regulations as the Board of Directors may prescribe. In
determining such amount due to any depositor, there shall be added together all
deposits in the bank maintained in the same right and capacity for his or her benefit
either in his or her own name or in the name of others. A joint account regardless of
whether the conjunction “and,” “or,” “and/or” is used, shall be insured separately
from any individually-owned deposit account: Provided, That (1) if the account is
held jointly by two or more natural persons, or by two or more juridical persons or
entities, the maximum insured deposit shall be divided into as many equal shares as
there are individuals, juridical persons or entities, unless a different sharing is
stipulated in the document of deposit, and (2) if the account is held by a juridical
person or entity jointly with one or more natural persons, the maximum insured
deposit shall be presumed to belong entirely to such juridical person or entity;
Provided, further, That the aggregate of the interest of each co-owner over several
joint accounts, whether owned by the same or different combinations of individuals,
juridical persons or entities, shall likewise be subject to the maximum insured
deposit of One million Pesos (Php1,000,000.00); Provided, furthermore, That the
provisions of any law to the contrary notwithstanding, no owner/holder of any
passbook, certificate of deposit or other evidence of deposit shall be recognized as a
depositor entitled to the rights provided in this Act unless the passbook, certificate
of deposit or other evidence of deposit is determined by the Corporation to be an
authentic document or record of the issuing bank; Provided, finally, That, in case of a
condition that threatens the monetary and financial stability of the banking system
that may have systemic consequences, as defined in section 22 hereof, as
determined by the Monetary Board, the maximum deposit insurance cover may be
adjusted in such amount, for such a period, and/or for such deposit products, as
may be determined by a unanimous vote of the Board of Directors in a meeting
called for the purpose and chaired by the Secretary of Finance, subject to the
approval of the President of the Philippines.



SECTION 2. Repealing Clause - Any laws, decrees, executive orders,
administrative orders, or other governmental rules and regulations contrary to or
inconsistent with the provisions of this Act are hereby repealed, superseded, or
modified accordingly.

SECTION 3. Separability Clause - If any section or provision of this Act is
held unconstitutional or invalid, the other sections or provisions hereof shall not be
affected and thereby remain in full force and effect.

SECTION 4. Effectivity - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,