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The Bangko Sentral ng Pilipinas (BSP) is proactively working with Congress, the Department of Finance, and Philippine Deposit Insurance Corp. for the swift passage of amendments to the charter of the government’s deposit insurance agency.

In an online briefing, BSP Governor Benjamin Diokno said the proposed amendments to the PDIC charter were expected to improve coordination between the bank regulator, and the deposit insurer and bank receiver.

This is seen to strengthen supervision of banks and support financial stability.

“The BSP is confident 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.

“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 the designation of the BSP Governor as ex-officio PDIC board chair; the attachment of PDIC to BSP; and the 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; and designation of PDIC as receiver of closed non-banks financial institutions.

There are proposed measures on the PDIC charter amendments with both houses of Congress. In the House of Representatives, House Bill No. 8818 was approved on third and final reading on March 25, 2021.

Meanwhile, Senate Bill No. 2365 was filed on Aug. 25 to substitute Senate Bill Nos. 2089 and 1260 and was scheduled for second reading in the plenary.