EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
Second Regular Session
)
SENATE 
S. B. No. 2089
March
DATE
TiME
NENeX
Introduced by SENATOR SONNY ANGARA
AN ACT
AMENDING SECTIONS 1, 3, 4, 5, 6, 8, 9, 10, 11, 18, 22, 24, 26 and 28 OF 
REPUBLIC ACT NO. 3591, AS AMENDED, OTHERWISE KNOWN AS THE 
PHILIPPINE DEPOSIT INSURANCE CORPORATION CHARTER AND FOR 
OTHER PURPOSES
EXPLANATORY NOTE
The Philippine Deposit Insurance Commission (PDIC) is a government 
instrumentality created by virtue of Republic Act No. 3591, as amended, to insure the 
deposits of all banks to strengthen the mandatory deposit insurance coverage 
system in order to generate, preserve, maintain faith and confidence in the country’s 
banking system, and protect it from illegal schemes and machinations. Indeed, the 
PDIC plays a key role in providing and promoting financial stability of the country.
However, the constantly changing Philippine financial landscape necessitates 
amendments to the legal and operational framework of the PDIC as provided under
its Charter to enable the Corporation to adapt to present time’s nuances.
\
In the exercise of the PDIC’s core mandates as deposit insurer and liquidator 
of banks, certain powers are modified to enable the Corporation to effectively and 
efficiently, fulfill its mandate. For one, the proposed amendments would prevent an 
overlap in the functions of the PDIC with the primary regulator of banks, the Bangko 
Sentral ng Pilipinas (BSP).
(, The powers of the PDIC on bank resolution including granting consent to 
mergers and acquisitions, and the issuance of cease-and-desist orders pertaining to 
deposit-related unsafe and/or Unsound banking would be centralized with the BSP. 
Instances for the exercise of the powers on bank examination are limited in order to 
prevent duplication of bank examination powers of the BSP and the PDIC.
In consideration of current economic conditions, under this bill, the maximum 
deposit insurance coverage of the PDIC shall be increased from Five Hundred 
Thousand Pesos (P500,000.00) to One Million Pesos (PI ,000,000.00) subject to the 
review of the PDIC Board of Directors every three (3) years. The maximum deposit
1


insurance coverage may be further increased to an amount indexed to inflation or 
other economic indicators as may be warranted by the PDIC Board of Directors.
To ensure alignment of PDIC with other Government-Owned and -Controlled 
Corporations (GOCCs) and government institutions in terms of compensation, the 
PDIC’s exemption from salary standardization laws shall be removed and be 
covered by a compensation classification system to be developed by the 
Governance Commission for GOCCs (GCG) and as approved by the President of 
the Philippines. Moreover, the bill clarified the applicability of Republic Act No. 7656 
or the Dividend Law, subject to certain conditions on the determination of the 
dividend base and the flexibility clause.
The authority for PDIC to setup deposit insurance schemes for the protection 
of users of new financial products, and depositors in Islamic banks are provided in 
the proposed amendments. This would address the increasing number of issuers of 
new financial products, and the potential to expand banking in the country.
Finally, to ensure better policy and program coordination between the 
agencies, the PDIC is likewise proposed to be attached to the BSP from the 
Departrhent of Finance.
The following amendments are being proposed to reinforce not only the 
benefits that individual depositors will enjoy, but also the advantages at the 
macroeconomic level to invigorate the country’s financial system and overall 
economy. And in view of the foregoing, the immediate approval of this bill is 
earnestly sought.
SONNY ANGARA


EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
Second Regular Session
)
SENATE 
S. B. No. 2089
March
Introduced by SENATOR SONNY ANGARA
AN ACT
AMENDING SECTIONS 1, 3, 4, 5, 6, 8, 9, 10, 11, 18, 22, 24, 26 and 28 OF 
REPUBLIC ACT NO. 3591, AS AMENDED, OTHERWISE KNOWN AS THE 
PHILIPPINE DEPOSIT INSURANCE CORPORATION CHARTER AND FOR 
OTHER PURPOSES
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
!
!
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SECTION. 1. Section 1 of Republic Act No. 3591, as amended, or “An Act 
Establishing the Philippine Deposit Insurance Corporation, Defining its Powers and 
Duties and for Other Purposes” (PDIC Charter) is hereby amended to read as 
follows:
“THE CREATION OF THE PHILIPPINE DEPOSIT INSURANCE 
CORPORATION
i
“SECTION 1. There is hereby created a Philippine Deposit Insurance 
Corporation hereinafter referred to as the 'Corporation' which shall insure ^ 
as herein provided, the deposits of all banks which are entitled to the 
benefits of insurance under this Act, and which shall have the'powers 
hereinafter granted. .
The Corporation shall, as a basic policy, promote and safeguard the 
interests of the depositing public by providing insurance coverage on all 
insured deposits and helping maintain a sound and stable banking system.
THE CORPORATION SHALL BE ATTACHED TO THE BANGKO 
SENTRAL NG PILIPINAS (BSP) FOR POLICY AND PROGRAM 
COORDINATION.”
SEC. 2. Section 3 of the same Act is hereby amended to read as follows: 
“BOARD OF DIRECTORS: COMPOSITION AND AUTHORITY


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“Section 3. (a) The powers and functions of the Corporation shall be 
vested in and exercised by a Board of Directors which shall be composed 
of seven (7) members as follows:
(1) The Secretary of Finance who shall be the ex officio 
[Chairman} CHAIRPERSON of the Board without compensation;
(2) 
The Governor of the [Bangko-Sentral-ng-Pilipinas] BSP 
who shall be ex officio member of the Board without compensation;
(3) The President of the Corporation, who shall be appointed by the 
President of the Philippines from a shortlist prepared by the Governance 
Commission for Government-Owned or -Controlled Corporations (GCG) 
pursuant to Republic Act No. 10149, “OR THE GOCC GOVERNANCE 
ACT OF 2011” to serve on a full-time basis for a term of six (6) years. 
[The President-of the Corporation-shall-also serve as-Vice-Chairman of the
Board};
(4) Four (4) members from the private sector to be appointed by the 
President of the Philippines from a shortlist prepared by the Governance 
Commission for Government-Owned or-Controlled Corporations pursuant 
to Republic Act No. 10149. The appointive directors shall serve for a term 
of six (6) years unless sooner removed for cause and shall be subject to 
only one (1) reappointment: Provided, That of those first appointed, the 
first two (2) appointees shall serve for a period of three (3) years; 
Provided, however. That the appointive director shall continue to hold 
office until the successor Is appointed. An appointive director may be 
nominated by the Governance Commission for Governrrient-Owned or - 
Controlled Corporations for reappointment by the President only if THE 
APPOINTIVE DIRECTOR obtains a performance score of above average 
or its equivalent or higher in the immediately preceding year OF tenure as 
appointive director based on the performance criteria for appointive 
directors of the Corporation.
XXX
The Secretary of Finance and the Governor of the [Bangko-Sentral-ng 
Pilipinas} BSP may each designate an alternate, who shall be an official 
with a rank not lower than assistant secretary OF THE DEPARTMENT OF 
FINANCE (DOF) or [its-equivalent} DEPUTY GOVERNOR OF THE BSP 
with written authority from the Secretary of Finance or the Governor of the 
[Bangko-Sentral ng-Pilipinas] BSP to attend such meetings and to vote on 
behalf of their. respective principals. Whenever the [Chairman} 
CHAIRPERSON of the Board is unable to attend a rneeting of the Board, 
or in the event of a vacancy in the office of the Secretary of Finance, [an4 
in- the-absence of the Vice Chairman-the-memberS' of-the-Board-shalt
designate—from—among—themselves—who) THE DESIGNATED 
ALTERNATE shall [act as-Chairman} PRESIDE. IN THE ABSENCE OF


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THE CHAIRPERSON AND THE DESIGNATED ALTERNATE, THE 
REPRESENTATIVE OF THE BSP SHALL PRESIDE.
XXX
(b) The Board of Directors shall have the authority:
(1)To approve and issue rules and regulations for banks, [and} the 
depositing public, AND OTHER INSTITUTIONS SUPERVISED BY THE 
BSP as it considers necessary for the effective discharge of its 
responsibilities UNDER THIS ACT INCLUDING THE ESTABLISHMENT 
OF SEPARATE INSURANCE FUNDS, AND INSURANCE 
ARRANGEMENTS OR STRUCTURES OR TAKAFUL, TAKING INTO 
CONSIDERATION THE PECULIAR CHARACTERISTICS OF ISLAMIC 
BANKING OR OTHER DEPOSIT PRODUCTS, AS MAY BE DEFINED 
BY THE BSP, OFFERED BY INSTITUTIONS SUPERVISED BY THE 
BSP. THIS AUTHORITY INCLUDES, SETTING OF THE INSURANCE 
COVERAGE, ELIGIBILITY OF THE INSTITUTIONS, ASSESSMENT 
PREMIUM RATE, AND OTHER IMPLEMENTATION RULES AND 
REGULATIONS;
XXX
[(4) To approve a compensation structure as an integral-component
of-the-Gorporation-'s-human-resource-development-program-based-on-job
evaluation-studies and wage-surveysTand revise the same as it may-deem
necessary: Provided, That all-positions-in—the—Corporation shall-be
governed-by-a-Gompensation-package,' position'classification system-and
qualification standards approved by-the-Board basedan-a-comprehensive
job ■■ analysis —and —audit—of—actual—duties andresponsibilities. The
compensation-structure-shall-be-Gomparable-to-that-of-other -financial
institutions-based-on prevailing-market- standardsrand'Shall-provide-for
yearty-merit-reviews or -increases-based-on-produotivity:- The Corporation
shall-therefore-be-exempt-from-existing laws, rules-and regulations-on
compensatiQn-paGkage,-position-€lass}fication - and -qualification-standard&r
It-shall-however endeavor to make its-system-conform-as closely-as
possible-wjth-therprinciples-under-Republic ActNo.-6758,-as-amended7]
[{§)] (4).To appoirit, [establish-the rank, fix-the-remuneration, benefits,- 
including-health-care services-through-a-Health-Maintenance Organization
(HMQ)-and-medical-benefits-ether-than those-provided-for-under-Repubtic
Act No. 7875,-as-amendedr] and remove any officer or employee of the 
Corporation, for cause, subject to pertinent civil service laws: Provided, 
That the Board of Directors may delegate this authority to the President 
subject to specific guidelines: Provided, further,.That in no case.shall there 
be any diminution of existing salaries, benefits and other emoluments;
(5) To approve policy on local and foreign travel, and the 
corresponding expenses, allowances and per diems, of officers, 
employees, agents of the Corporation, wfjich, shall be comparable with the


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expenses, allowances and per diems of personnel of other financial 
institutions based on. prevailing market standards, notwithstanding the 
provisions of Presidential Decree No. 1177, Executive Order No. 292, 
Executive Order No. 248, as amended. Executive Order No. 298, and 
similar laws;
[^] (6) To adopt an annual budget for, and authorize such 
expenditures by the Corporation, as are in the interest of the effective 
administration and operation of the Corporation:
[^] (7) To approve the target level of the Deposit Insurance Fund 
(DIF) and the methodology for determining reserves for insurance and 
financial assistance losses;
[(9)] (8) To review the organizational set-up of the Corporation and 
adopt a new or revised organizational structure as it may deem necessary 
for the Corporation to undertake its mandate and functions;
[(49)] (9) To design, adopt and revise, as it may deem necessary, an 
early separation plan for employees of the Corporation to ensure 
availability of a human resource pool qualified and capable of 
implementing the Corporation's authorities under this Charter in a manner 
responsive and attuned to market developments, and to provide incentives 
for all those who shall be separated from the service. Notwithstanding any 
law to the contrary, these incentives shall be in addition to all gratuities 
and benefits the employee is entitled to under existing laws; and
.[(44)] (10) To promote and sponsor the local or foreign training or 
study of personnel in the fields of banking, finance, management, 
information technology and law. Towards this end, the Corporation is 
hereby authorized to defray the costs of such training or study. The Board 
shall prescribe rules and regulations to govern the training or study 
programs of the Corporation.
SEC. 3. Section 4 of the PDIC Charter is hereby amended to read as follows:
“PRESIDENT OF THE CORPORATION: COMPENSATION, POWERS, AND 
DUTIES
“Section 4. The President of the Corporation shall be its Chief Executive 
Officer [and the Viee^hairman of its Beard-of-Directors] WHOSE salary 
shall be [fixed—by—the—President—of the—Philippines—upon—the 
recommendation of] BASED ON THE COMPENSATION AND POSITION 
CLASSIFICATION SYSTEM DEVELOPED BY the Governance 
Commission for Government-Owned or -Controlled Corporations (GCG) 
[at-a-sum-commensurate to the-importance and responsibility-attached-to
the-position.-] AND AS APPROVED BY THE PRESIDENT OF THE 
PHILIPPINES. The sum total of the salary, allowances, benefits and other 
emoluments of the President of the Corporation shall be higher than the
. 4


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compensation package of the next highest ranking executive of the 
Corporation.
XXX
The President shail be assisted by a Vice President and other officials 
whose appointment and removal for 'cause shall be approved [and whose 
salafy-sl^ll-be-fixed] by the Board of Directors upon recommendation of 
the President of the Corporation. THE SALARY OF THE VICE 
PRESIDENT AND OTHER OFFICIALS SHALL BE BASED ON THE 
COMPENSATION AND POSITION CLASSIFICATION SYSTEM 
ESTABLISHED BY THE GCG AND AS APPROVED BY THE 
PRESIDENT OF THE PHILIPPINES. During the absence or temporary 
incapacity of the President, or in case of vacancy or permanent incapacity 
and pending appointment of a new President of the Corporation by the 
President of the Philippines, the Board of Directors shall designate the 
officer-in-charge of the Corporation.
SEC. 4. Section 5 of the PDIC Charter is hereby amended to read as follows: 
“DEFINITION OF TERMS 
“SECTION 5. As used in this Act. —
(a) xxxx
(g).xxx . 
,
(3) Deposit accounts or transactions constituting[,-and/or-emanating 
fr^] unsafe and unsound banking [praotice/s], as determined by the 
Corporation, in consultation with the [Bangko-Sentral ng Pilipinas] 
BSP, after, due notice and hearing, and publication of a directive to 
cease and desist jssued by the [Corporation] BSP against such 
deposit accounts, transactions or [practises] UNSAFE AND 
UNSOUND BANKING; and
XXX
(i) THE TERM INCOME FROM OTHER SOURCES MEANS INCOME 
ACTUALLY REALIZED BY THE CORPORATION FROM SOURCES 
OTHER THAN ASSESSMENT COLLECTIONS, AS DEFINED BY 
RELEVANT AND PREVAILING ACCOUNTING STANDARDS.
[(i^ {]) The term insured bank means any bank the deposits of which are 
insured in accordance with the provisions of this Act.
{[])} (k) 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 [Five hundred-th0Usand-pesos-{P5OO;OOO.-QO)]


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ONE MILLION PESOS (P1,000,000.00). 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 shail 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, shail likewise be subject to the maximum insured deposit of {Five 
hundred-thousand—pesos-(P500,000.00)] ONE MILLION PESOS 
(P1,000,000.00): 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 
entitied 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] Un case [e^ a condition OCCURS that threatens 
the monetary and financial stability of the banking system that may have 
systemic consequences, as defined in Section 22 hereof, AND 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 OR THE DESIGNATED ALTERNATE, subject to the 
apprpval of the President of the Philippines.
THE BOARD OF DIRECTORS CAN INCREASE THE AMOUNT OF THE 
MAXIMUM DEPOSIT INSURANCE COVERAGE TO AN AMOUNT 
INDEXED TO INFLATION OR IN CONSIDERATION OF OTHER 
ECONOMIC INDICATORS AS MAY BE DEEMED APPROPRIATE BY 
THE BOARD. THE BOARD OF DIRECTORS SHALL REVIEW THE 
AMOUNT OF THE MAXIMUM DEPOSIT INSURANCE COVERAGE 
EVERY THREE (3) YEARS AND ADJUST THE MAXIMUM DEPOSIT 
INSURANCE COVERAGE AS MAY BE WARRANTED. IN THE 
EXERCISE OF THIS AUTHORITY, THE BOARD MAY CONSIDER 
ECONOMIC INDICATORS OTHER THAN INFLATION. FOR THIS 
PURPOSE, THE BOARD MAY HIRE THE SERVICES OF ACTUARIAL 
CONSULTANTS AND OTHER EXPERTS TO DETERMINE THE 
FEASIBILITY AND ADVISABILITY OF ADJUSTING THE MAXIMUM 
DEPOSIT INSURANCE COVERAGE


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{(k)} (I) The term liquidation refers to the proceedings under Sections 12 to 
16 of this Act.
{m)Jhe term liquidation court refers to, the Regional Trial Court (RTC) 
of general jurisdictipn where, the petition for assistance in the liquidation of 
a closed bank is filed and given due course,
(n) The term payout refers to the payment of insured deposits.
{(fj)} (o) The term petition for assistance in the liquidation of a closed 
bank refers to the petition filed by the receiver with the RTC in accordance 
with Section 16 of this Act. 
s
'■fe
{(©)J (p) The term purchase of assets and assumptia^ of liabilities refers to 
a transaction where an insured bank purchases any or all assets and 
assumes any or all liabilities of another bank under [resolution-or] 
liquidation, as provided in this Act.
{(p^ (q) The term rece/Ver refers to the Corporation or any of its duly 
authorized agents acting as receiver of a closed bank.
{{q^ (r) The term records include all documents, titles, papers and 
electronic data of the closed bank, including those pertaining to deposit 
accounts of and with the closed bank, its assets, transactions and 
corporate affairs.
(s) The term residual assets refer to assets, in cash or in kind, to be 
turned over to the closed bank's stockholders of record, in proportion to 
their interest in the closed bank as of date of closure, after payment in full 
of liquidation costs, fees and expenses, and the valid claims and surplus 
dividends to all the creditors.
[(s)—The—term- reselutien—refers—to—the-actions -undertaken by the
[CorporatieFHjnder-Section-1-1-of-this Act]:
(1) .-Protect depositors,-creditors and-the DIF;
(2) Safeguard the-continuity-of-essentiakbanking-services-or-maintain
financial stability;-and
{3)-Prevent deterioration-or-dissipation-of-bank-assets.-]
XXX
(z) THE TERM UNSAFE AND UNSOUND BANKING MAY REFER TO 
THE CONDUCT OF BUSINESS IN AN UNLAWFUL, UNSAFE OR 
UNSOUND MANNER AS MAY BE DEFINED BY THE BANGKO 
SENTRAL NG PILIPINAS UNDER REPUBLIC ACT NO. 7653, AS 
AMENDED BY REPUBLIC ACT NO. 11211, OR “THE NEW CENTRAL 
BANK ACT”, AND REPUBLIC ACT. NO. 8791 OR “THE GENERAL 
BANKING LAW”.


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{(z)} (aa) The term valid claim refers to the claim recognized by the 
receiver or allowed by the liquidation court.
{(aa)} (bb) The term winding up period refers-to the period provided in 
Section 16 of this Act..
SEC. 5. Section 6 of the PDIC Charter is hereby amended to read as follows: 
“DEPOSIT INSURANCE COVERAGE
“SECTION 6. The deposit liabilities of any bank which is engaged in the 
business of receiving deposits as herein defined on the effective date of 
this Act, or which thereafter may engage in the business of receiving 
deposits, shall be insured with the Corporation. OTHER NON-BANK 
BSFIs ACCEPTING DEPOSIT LIABILITIES MAY BE INSURED BY THE 
CORPORATION. IN THE CASE OF NSSLAs, SUCH DEPOSIT 
LIABILITIES MAY BE INSURED AT THE OPTION OF SAID NSSLAs. 
THE CORPORATION MAY ESTABLISH SEPARATE INSURANCE 
FUNDS, AND INSURANCE ARRANGEMENTS OR STRUCTURES OR 
TAKAFUL, THAT TAKE INTO CONSIDERATION THE PECULIAR 
CHARACTERISTICS OF ISLAMIC BANKING, AND OTHER DEPOSIT 
PRODUCTS, AS MAY BE DEFINED BY THE BSP, OFFERED BY 
INSTITUTIONS SUPERVISED BY BANGKO SENTRAL NG PILIPINAS.
WHENEVER AN INSTITUTION OTHER THAN BANKS THAT IS 
SUPERVISED BY THE BSP IS ORDERED CLOSED BY THE 
MONETARY BOARD, AND SUCH INSTITUTION HAS DEPOSITS OR 
PRODUCTS COVERED BY AN INSURANCE OF THE CORPORATION, 
THE CORPORATION SHALL BE DESIGNATED AS RECEIVER OF 
SUCH INSTITUTION AND THE COPORATION SHALL PROCEED WITH 
ITS TAKEOVER AND LIQUIDATION IN ACCORDANCE WITH THIS 
ACT.
Whenever a bank is determined by the [Bangko-Sentrai ng Pilipinas] BSP 
to be capital deficient, the Corporation may conduct an insurance risk 
evaluation on the bank to enable it to assess the risks to the DIF. Such 
evaluation .may include the determination of: (i) the fair market value of the 
assets and liabilities of a bank; or (ii) the risk classification of a bank [i-©F 
(tii)-pGssible-feselutiQn-m0de&-undeF-Section-14-Gf-thi&-Act, subject to such
terms-and-conditions-as-the-PDIG-Board-may-prescribe.-].
SEC. 6. Section 8 of the PDIC Charter is hereby amended to read as follows:
“SANCTIONS AGAINST UNSAFE AND UNSOUND BANKING 
[PRACTICES]”
“SECTION 8. (a) Whenever upon examination by the Corporation into 
the condition of any insured bank, it shall be disclosed that ap insured 
bank or its directors or agents have committed, are committing or about to
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commit unsafe or unsound [praGtioes] BANKING [in-conducting-the 
business-of-the-bank], or have violated, are violating or about to violate 
any provisions of any law or regulation to which the insured bank is 
subject, the Board of Directors shall submit the report of the examination 
to the Monetary Board [to-secure corrective action thereon.-lf-no-such 
corrective action is taken-by-the-Monetary-BGard-within forty-five (45)-days
from-the-submission-of-the-report—the-Board-of Directors shallr-motu
proprio,-institute corrective aotion-which-it-deems necessary. The Board-of
Direotors- may-thereafter-issue a-cease-and-desist-order—and require-the
bank-or-its directors-or-agents-GenGemed-to-oerrect-the- practices or
violations-within forty-five (d5) days.-Howeverrif-the-praGtioe-OR/iolation is
likely-to-Gause-insolvenGy-or-substantial-dissipation-of-assets-Qr-eamiHgs
of-the-bank-or-is-likely-to-seriously-weaken the condition-of the bank or
otherwise-seriously-prejudice the interests of-its-depositors and- the
GoFp0r-atien,-the period to take-corrective-aGtion-shalt not- be more-thar>
fifteen (15)-days;-The-order-may-aiso include the-imposition of fines
provided-in-SeGtion-26(g) hereof^-he-B0ard of-Directors shall duly-inform
the-Monetary-Board-of-the-Bangko-Sentral -ng-Pilipinas of aotion-it-has
taken under-this-subsection with-respeGt-to such praotices-or-violationsT]
[{bj—-The—aetiens—and—proceedings—provided—in—the—preceding
Gubsectipns may be undertaken by the Corporation if, in-its opinion,-an
insured-bank or-its-directors-or agents have violated, are-violating or-about
to violate-any-proyision of this Act-or-any-orderT-rule or-instruction-issued
by-the-Gerporation or. any written-condition imposed-by-the-Gorporation-in
connection-with-any-transaction-with-or-grant bythe-GorperatioRr]
XXX
[(g)] (b) The Corporation may terminate the insured status of any bank that 
fails or refuses to comply, within thirty (30) days from notice, with any 
cease-and-desist order issued by the [Gorporatien] BSP, [or with-any 
corrective action imposed-by the -Monetary-Board, under this-sectien]
pertaining to a deposit-related unsafe and/or unsound banking practice.
XXX
SEC. 7. Section 9 of the PDIC Charter is hereby amended to read as follows: 
“POWERS AS A CORPORATE BODY"
“SECTION 9. The Corporation as a corporate body shall have the 
powers: 
, .
XXX
Fifth — To appoint by its Board of Directors such officers and employees 
as are not otherwise provided for in this Act, to define their duties, [fix-theiF


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Gompensation?] require bonds of them and fix penalty thereof and to
dismiss such officers and employees for cause;
1
XXX
Eighth — [To -conduct-examination of banks with prior- approval-of-the 
Menetary-Beard^Provided—That-no-examination-can-be-GonduGted-within
twelv6-(-1g-)-months-from-the-last-examination-date:-P-rovided;-howeveFr
That—the—Corporation-may,—in-coordination-with-the-Bangke-SentFalr
conduct-a-special -examination-as-the-Board of Directorsrby-an-affirmative
vote of a majority-of-all-of-its-membersHMhere -is -a-threatened-or
impending-closure-of-a bank:] TO EXAMINE THE RECORDS, BOOKS OF 
ACCOUNTS AND REQUIRE INFORMATION AND REPORTS FROM 
DEPOSITORY INSTITUTIONS WHENEVER THE BSP DEEMS IT 
APPROPRIATE AND NECESSARY SUCH AS WHEN THERE IS A 
FINDING OF FRAUD OR UNSAFE OR UNSOUND BANKING RELATED 
TO DEPOSIT-TAKING: Provided, [further-,-] That, notwithstanding the 
provisions of Republic Act No. 1405, as amended. Republic Act No. 6426, 
as amended. Republic Act No. 8791, and other laws, the Corporation 
and/or the [Bangko-Sentral] BSP, may inquire intp or examine deposit 
accounts and, all information related thereto [in-case^here is a finding-of 
unsafe-or-unsound-banking-praetice]: Provided, [finally] FURTHER, That to 
avoid overlapping of efforts, the examination shall maximize the efficient 
use of the relevant reports, information, and findings of the [Bangke 
Central] BSP, which it shall make available to the Corporation.
XXX
[Fourteenth------To-determine-the-appropriate -resolution-method-ancMe
implement-the-same-for-a-bank subjeot-of-resolutioni-and]
[Fifteenth] FOURTEENTH — To determine the appropriate mode of 
liquidation of a closed bank and to implement the same.
SEC. 8. Section 10 of the PDIC Charter is hereby amended to read as follows: 
“POWERS, [ANC] RESPONSIBILITIES AND PROHIBITIONS 
“SECTION 10. XXX
(b) WHENEVER THE BSP DEEMS IT APPROPRIATE AND 
NECESSARY FOR PDIC TO JOIN THE CONDUCT OF EXAMINATION 
OF A BANK, P] The Board of Directors shall appoint examiners who shall 
have power, on behalf of the Corporation to examine any insured bank. 
Each such examiner shail have the power to make a thorough examination 
of all the affairs of the bank and in doing so, he shall have the power to 
administer oaths, to examine and take and preserve the testimony of any 
the officers and agents thereof, and to compel the presentation of books, 
documents, papers or records necessary in his judgment to ascertain the
10


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facts relative to the condition of the bank: and shaii make a full and 
detailed report of the condition of the bank to the Corporation. The Board 
of Directors in like manner shall appoint claim agents who shall have the 
power to investigate and examine ali ciaims for insured deposits and 
transferred deposits. Each claim agent shall have the power to administer 
oaths and examine under oath and take and preserve testimony of any 
person relating to such claim.
XXX
(d) The [Corporation] BSP shaii have access to [reports—of 
examination] BANK EXAMINATION REPORTS made by THE 
CORPORATION, [and reports-of-eondition-made-to-the-Bangko-Sentral^^g 
Pilipinas - or its appropriate-supervising- departments,—and -the-Bangko
Sentral ng Pilipinas-shall-also-have-access to-reports-ofexamination-made
by,-and reports-of-condition-made-to-the-Gorporation:-Provided,—That-the
provisions of any-law-to-the-contrary-notwithstanding,-the-Gorporation-shall
likewise have access to report&T^indings and-any-other-infermation derived
from-any-special or-general-examination-of-inquiry-Gonductect-by-the
Bangko Sentral-in-respect-to-bank-fraud-or-serious-irregularity-in-an
insured-bank;] AND TO SUCH OTHER REPORTS OR INFORMATION 
AS MAY BE AGREED UPON BY THE CORPORATION AND THE BSP. 
THE BSP SHALL SHARE TO THE CORPORATION ITS REPORTS OF 
EXAMINATION ON BANKS, AND SUCH OTHER REPORTS OR 
INFORMATION AS MAY BE AGREED UPON BY THEM: Provided, 
[t]That, [the Corporation-shall-use-suoh-reports-and-findings-under-similar 
terms-and-Gonditions prescribed by applicable laws on the BangkehSentral]
THE USE OF SUCH REPORTS OR INFORMATION ARE IN 
ACCORDANCE WITH THE TERMS AND CONDITIONS AGREED UPON 
BY THE CORPORATION AND BSP AND PRESCRIBED BY 
APPLICABLE LAWS AND REGULATIONS.
XXX
SEC. 9. Section 11 of the PDIC Charter is hereby amended to read as follows:
“[BANK—RESOLUTION] 
AUTHORITY TO EXAMINE DEPOSIT
RECORDS
“SECTION 11. [(a) The-Gorporation,- in coordination-with the -Bangko 
Sentral ng Pilipinas,-may-Gommence-the-resolution-of-a-bank-undei::-this
section upon:]
[(4^-----—Failure-of prompt corrective action as declared by the
Monetaiy-Board;-or]
[(2)-
-Request-bya-bank-tOTbe-placed-under-resolutionr]
11


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pPhe-Gorporation shall-inform the bank-of.its eligibility for-entry-into
resolution;]
[(b)------The-Bangko-Sentral-ng-Pilipinas shall inform-the-Corporation-of
the initiatien-of-prompt corrective action- on-any bank and-shall-be
authorized-to-share-with-the-Gorporation all information, agreements-or
documents,-including -any-order-of the Monetary-Boardrin-relation-to-the
prempt-corrective action.—The-Gorporation-shall -have -the authority-to
inquire-and-monitor the status of-banks-under-prompt corrective aotion.]
[(o)] When there is a failure of prompt corrective action as declared by 
the Monetary Board [due-to-capital-deficiency], the Gorporation [,-its-duly 
authorized officers or-employees,-] AND THE BSP may examine, inquire or 
look into the deposit records of a bank; [Provided, That such authority-may 
not-be-exercised whepHthe-failure-of-prompt-correotive action is due to
greunds-other-than- capital defioienoy.] For this purpose, banks, their 
officers and employees are hereby mandated to disclose and report to the 
Gorporation AND BSP or [its] THEIR duly authorized officers and 
employees, THE REQUIRED deposit account information [in said-bank].
[T-he-Gorporation, its-duly-authorized-officers-or-employees are prohibited
from disoiesing-information-obtained'-under-this-section-to any-person,-
government-official, bureau-or-bffice^Any act done pursuant to this section 
shall riot be deemed as a violation of Republic Act No. 1405, as amended. 
Republic Act No. 6426, as amended. Republic Act No. 8791, and other 
similar laws protecting or safeguarding the secrecy or confidentiality of 
bank deposits:- Provided, That a] Any unauthorized disclosure of the 
information under this section shall be subject to the same penalty under 
the [foregoing] laws protecting the secrecy or confidentiality of bank 
deposits.
[{d]------TheTstookholderSi-direotors, offiGers-or-employees-of the-bank
shall have the following-obligations:]
[(4)—^----EnsuFe-bank-compliance-with-therterms-and conditions
prescribed-by-the Corper-ation-for-^he-resolution-of the-bank;]
m-
Gause the—engagement;—with—the—sonsent—of the
Gorporation;-of an independent-appraiser-or-auditor- for the-purpose - of
determining-the valuatien-ef-the-bank-Gonsistent-with-generally accepted
valuatien-standards;-]
[(3).——Ensure prudent-management-and-administration of-the
bank's assets, liabilities-and-Fecordsi-and]
[{4)--------Cooperate with-the Gorporation in the conduot-er-exeFeise
of-any-or-all-of-its-authorities-under ithis Act and hener-in-geed-faith-its
eemmitment-oF-undertaking-with-the-Gorporationon-the-resolution-of-the
bar^kr]
12


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[(e)- -- Within a period-of-one-hundred eighty-(180)-days from-a-bank's
entry-into-resolution, the Corpepatienr-through-the affirmative vote of at
least five-(5) members-of-the-PDIG-Board,-shall-determine-whether-the
bank—may - be resolved—through the purchase-of . all its assets and
assumptioh-of-all-its--liabilitiesr-or-merger-or-oonsolidation-with—or-its
acquisitioivby-a-qualified-investorT]
[For-this-purpose.-the-Gorporation-may:-]
[(-1)-Determine-a-re6olution-package-fQr-the-banki]
[(2)-ldentify and, with the approval of the Monetary-Boardrpre-quali^
possible acquirers or-invester-Sr]
[(3) Authorize-pre-qualified-aGquirer&-or-investoF&-te-conduct-due
diligence on the bankT-for-purposes of determining the-valuation-of-a-bank
through an-objective and thorough review and-appraisal-of its assets-and
liabilities, and assessment-of-risks or events that may affect-its-valuatienf
and]
[(4) Conduct a bidding-te-determine the-acquirer-of-the-bankr]
[(f)-------In-determining the appropriate-resolution method -for-a -bankr-the
Gorporation-shall-oonsider-the:-]
[(1) Fair market value of the assets of the-bank,-its-franchise,-as-welt
as-the-ameunt-of-its-liabilitie&r]
[(2) Availability of a^qualified-investor-j]
[(3)-l=east-cost-to-the DIF: and]
[(4-)-lnteFe&t-ef-the depositing public.]
[(§)-—-The—Corporation-may . appoint or hire persons-or-entities-of
recognized—competence - -in—banking,—finance, asset - management-or
remedial-management, as its agents,-to -perform-such-powers and
funotions-of-the-Corporation-in-the-resolution-of-a bank, or assist-in-the
performance-thereofr]
[(h)------The-PDIC Board -shall-prescribe-the-guidelines- or criteria-for-a
bank to be plaoed-under-resolutionr]
[(i)-------Upon a determination by the Corporation-that the bank may not-be
resolvedr-the-Menetary- Board-may-act-in accordance -with-Section - 30-of
Republio-Aot-No.-7653 or-the-New Central Bank-ActT]
[(})-------Bank-resolution- involving the- purchase of all assets and
assumption-of-all-liabilities of a bank-shall-be exempMrem the provisions of
Act-No.-3952, Otherwise known as ■'■The-Bulk Sales Law*.]
13


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[(k)] The provisions of this section [are without-prejudice to any action 
that] NOTWITHSTANDING the Monetary Board may take OTHER 
ACTIONS under existing la\A^s THAT IT MAY DEEM NECESSARY.
SEC. 10. Section 18 of the PDIC Charter is hereby amended to read as follows: 
“DIVIDEND DECLARATION
“SECTION 18. Consistent with the policy of the State to generate, 
preserve, maintain faith and confidence in the country's banking system, 
the Corporation shall build up and maintain the DIF at the target level set 
by the PDIC Board of Directors. Such target level shall be subject to 
periodic review and may be adjusted as necessary.
The Corporation [is exempt-from-Republio-Act No.- 7656; instead,- the 
Cerporation-shallj SHALL DECLARE AND remit dividends to the [aj 
National [§j Government [enly-if-the-target-DIF-level-for-the applicable-year 
, has-been reached.] IN ACCORDANCE WITH REPUBLIC ACT NO. 7656 
' OR “AN ACT REQUIRING GOVERNMENT-OWNED OR -CONTROLLED 
CORPORATIONS TO DECLARE DIVIDENDS UNDER CERTAIN 
CONDITIONS TO THE NATIONAL GOVERNMENT, AND FOR OTHER 
PURPOSES”: PROVIDED THAT SECTION 2(d) ON THE 
DETERMINATION OF THE DIVIDEND BASE AND SECTION 5 
FLEXIBLE CLAUSE THEREOF SHALL NOT APPLY. IN LIEU OF 
SECTION 2(d) AND SECTION 5 OF REPUBLIC ACT NO. 7656, THE 
SUCCEEDING PROVISIONS SHALL GOVERN.
For purposes of computing the amount of dividends to be declared and 
remitted to the [a] National [§] Government, all assessment collections 
shall not be considered as income AND THE DIVIDEND BASE SHALL 
BE THE SUM OF ALL INCOME FROM OTHER SOURCES ONLY. 
UNREALIZED INCOME SUCH AS REVERSALS OF ALLOWANCES 
AND RESERVES, AND UNREALIZED EXCHANGE GAINS, SHALL NOT 
BE PART OF INCOME FROM OTHER SOURCES. NO DEDUCTIONS 
SHALL BE ALLOWED FROM THE INCOME FROM OTHER SOURCES.
The dividend rate shall be at least fifty percent (50%) of the SUM OF ALL 
THE income from other sources only. IN CONSIDERATION OF 
MAINTAINING THE DIF AT A REASONABLE LEVEL, THE DIVIDEND 
RATE MAY BE ADJUSTED BY THE PRESIDENT OF THE PHILIPPINES 
UPON RECOMMENDATION BY THE SECRETARY OF FINANCE; OR 
THE CORPORATION MAY BE ALLOWED TO DEFER THE PAYMENT 
OF THE FIFTY PERCENT (50%) DIVIDEND DUE AS MAY BE 
DETERMINED BY THE SECRETARY OF FINANCE.
SEC. 11. Section 22 of the PDIC Charter is hereby amended to read as follows:
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“CORPORATE FUNDS AND ASSETS 
“SECTION 22. XXX
(e) [In -the exeroise-of-its-authorities-under-Section-1-^ -of-this-Aotr-t] 
The Corporation is authorized to make loans to, or purchase the assets of, 
or assume liabilities of, or make deposits in:
(1) A bank in danger of closing, upon its acquisition by a qualified 
investor; or
(2) A qualified investor, upon its purchase of all assets and 
assumption of all liabilities of a bank in danger of dosing; or
(3) A surviving or consolidated institution that has merged or 
consolidated with a bank in danger of closing; upon such terms and 
conditions as the Board of Directors may prescribe, when in the opinion of 
the Board of Directors, such acquisition,, purchase of assets, assumption 
of liabiiities, merger or consolidation, is essential to provide adequate 
banking service in the community or maintain financial stability in the 
economy.
Xxx"
SEC. 12. Section 24 of the PDIC Charter is hereby amended to read as follows:
“ISSUANCE OF BONDS, DEBENTURES AND OTHER OBLIGATIONS
“SECTION 24. With the approvai of the President of the Philippines, upon 
the recommendation of the Department of Finance, the Corporation is 
authorized to issue bonds, debentures, and other obligations, both local or 
foreign, as may be necessary for purposes of providing liquidity for 
settlement of insured deposits in dosed banks[7] OR to faciiitate the 
impiementation of [bank-reselutien-under Section-14■ of-this-ActT-as-well-as 
fer] financial assistance as provided herein: Provided, That the Board of 
Directors shall determine the interest rates, maturity and other 
requirements of said obligations: Provided, further. That the Corporation 
may provide for appropriate reserves for the redemption or retirement of 
said obligation.
Xxx”
SEC. 13. Section 26 (c) of the PDIC Charter is hereby deleted and renumbered 
accordingly:
“SANCTIONS AND PENALTIES 
“SEC. 26
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XXX
{c)-Without-prior-coRseRt-ef-the-Gerp0ration—no-insured-bank-^hall-(-1-)
merge-OF-Gansolidate-with-any-non-insured-bank-or-institution-or-Gonvert
into a noFHnsured-bank-or-institution-or-(2-)-assume-liability-to-pay-any
deposits-made-in.-or-simitaMiabilities-ofi-any non-insured bank or-institution
or—(•3-)-transfer—of—assets-to-any-non-insured-bank-or-institution—in
eensideratiQB-of-the-assumption-of-liabilities-for-any-portien-of thedeposits
fflade-in-soGh-insured-bank&.-
XXX
SEC. 14. Section 28 of the PDIC Charter is hereby deleted and replaced by Section 
11 0) as follows:
[SECTION-28. Exempting-daose;----- The-Corporation-shall be exempt
from-Presidential-Decree No. 985, Presidential-Oeeree N0.--1597rRepubliG
Act No. 6758, as amended7-j0int-ResolutioR-N0;-4-(2OO9) and-other-laws
on salary-standardization,-Presidential Decree No.-1-17-7-rExecutive-Qrder
No. 245,-as -amended,-Executive-Qrder-No.-298-and-the-provision&-0f
Republic Act No. 10149 with-regard-to-position-classifioation.-qualifiGation
standardSi -and-the-compensation-package- of the employees-.of-the
Gorporatiem-Pfovided, That the PDIC shall be-subject-to-all-other-poliGies
under-Republio-Act-No.—10149,-including-but--not-limited-to,-perfeFmanGe
evaluation-by-the-Governance CommissiorHfor-Government-Qwned -or—
Gontrolled-Gorporation&,-seleGtion-and-nomination-ef-app0ifitive-director&7
and limitations-on - the creation-of subsidiaries-and-the-acquisitierv-of
affiliates-.except-in the case-of-acquisition of shares-in-the-grant-ofTinanGiat
assistance-under-this-Aot.-]
[(j)] SECTION 28. EXEMPTION FROM THE BULK SALES LAW. - BANK 
LIQUIDATION INVOLVING THE PURCHASE OF ALL ASSETS AND 
ASSUMPTION OF ALL LIABILITIES OF A BANK SHALL BE EXEMPT 
FROM THE PROVISIONS OF ACT NO. 3952, OTHERWISE KNOWN AS 
•THE BULK SALES LAW’.
SEC. 15. Separability Clause. - If any provision if this Act is subsequently declared 
invalid or unconstitutional, the other provisions hereof which are not affected thereby 
shall remain in full force and effect.
SEC. 16. Repealing Clause. Sections 1,3, 4, 5, 6, 8, 9,10,11; 18, 22, 24, 26 and 
28 of Republic Act No. 3591, as amended, otherwise known as the PDiC charter are 
hereby amended accordingly.
All other laws, decrees, resolutions, instructions, and rules and regulations, or 
parts thereof which are inconsistent with this Act are hereby deemed repealed or 
modified accordingly.
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SEC. 17. Effectivity. - This Act shall take effect fifteen (15) days following the 
completion of its publication in the Official Gazette or in two (2) newspapers of 
general circuiation.
Approved,
17