Transfer of PDIC regulatory functions to BSP backed

The Department of Finance (DOF) is backing moves in the House of Representatives to take away regulatory powers from state-run Philippine Deposit Insurance Corp. (PDIC) while retaining its core functions as deposit insurer and liquidator.

During a Senate hearing Friday, Finance Secretary Carlos Dominguez III also supported transferring PDIC as a corporation attached to the Bangko Sentral ng Pilipinas (BSP). At present, PDIC is under the Department of Finance.

Pending in the House are bills aimed at amending the PDIC charter.

“The proposed amendments aim to remove the regulatory overlap between the BSP and PDIC. There should be only one regulator for banks and that should be the BSP,” Dominguez told senators.

“By sharpening the focus of PDIC to that of a ‘pay box’ for insurance claims and as liquidator of failed banks, we will ensure even better institutional efficiency than what we have at present,” the finance chief said.

“All regulatory functions such as the issuance of cease-and-desist orders relating to unsound banking practices will be ceded entirely to the BSP. This will help prevent confusing functions and confounding signals to the industry,” he added.

Dominguez said placing PDIC under the BSP’s direct supervision would ensure better coordination between the two agencies as they were both mandated to help maintain a stable financial system.