BSP pushes amendments to PDIC charter as it seeks bigger role
MANILA, Philippines—The Bangko Sentral ng Pilipinas (BSP) is lobbying Congress, the Department of Finance and the Philippine Deposit Insurance Corp. (PDIC) for swift passage of amendments to the PDIC charter that would make the deposit insurer an attached agency of the BSP.
At an online briefing, BSP Governor Benjamin Diokno said that the proposed amendments to the PDIC charter were expected to improve coordination between the central bank and the agency in charge of deposit insurance and bank receiverships.
This was seen to strengthen the BSP’s supervision of banks and support financial stability.
“BSP is confident that the proposed amendments will further enhance PDIC’s capacity to promote and safeguard the interests of the depositing public, and effectively perform its mandate as deposit insurer and liquidator of banks,” Diokno said.
“Moreover, bolstering coordination between bank regulator and deposit insurer and bank receiver is expected to strengthen the supervision of banks,” he added. “Both of these support the promotion of financial stability.”
To further enhance coordination between the two government agencies, the BSP supports changes in PDIC’s organizational structure, including:
- Designation of the BSP governor as ex-officio PDIC board chair
- Attachment of PDIC to BSP
- Consolidation of certain PDIC powers within the BSP to prevent overlapping functions
The BSP is also backing the grant of authority to PDIC to raise the maximum deposit insurance coverage to an amount indexed to inflation or in consideration of other economic factors, as well as certain expanded powers for PDIC.
These powers include:
- Broader deposit insurance coverage to include Islamic banks and non-bank BSP-supervised financial institutions offering deposit products
- Authority to extend financial assistance to Islamic banks
- Designation of PDIC as receiver of closed non-bank financial institutions.
Currently, there are proposed measures on amending the PDIC charter pending in both chambers of Congress. In the House of Representatives, House Bill No. 8818 was approved on third and final reading last March 25, 2021.
Senate Bill No. 2365 was filed last Aug. 25 to substitute Senate Bill Nos. 2089 and 1260 and is scheduled for second reading in the plenary.
