The Philippine Deposit Insurance Corp. is set to sell 130 pieces of property next month in a bid to turn assets it had acquired from failed banks into cash.
Officials said proceeds of the sale would help the state-owned firm boost the deposit insurance fund (DIF), thus strengthening its ability to service claims of depositors of shuttered banks.
In a statement, PDIC said the 130 pieces of property are estimated to be worth P243.88 million.
The assets, which are all in Davao City, include 59 residential lots, 42 condominium units and 29 parking spaces.
“PDIC has posted “For Sale” signs in public and strategic areas within the localities [where the properties are situated],” the government-owned firm said.
The bidding for the properties is set on August 1 and will be held at the PDIC’s regional office in Davao City.
As the country’s deposit insurer, PDIC is mandated to take over assets and liabilities, the bulk of which are deposits gathered from the public, of banks that the Bangko Sentral ng Pilipinas orders closed.
Reasons for closing banks include observance of unsafe and unsound banking practices and insolvency.
Last year, 31 banks—mostly rural banks— were closed.
Despite this, PDIC said the DIF, which is used to pay claims of depositors of closed banks, remains healthy.
PDIC President Valentin Araneta had said, however, that the state-owned firm wanted to liquidate its acquired assets to boost the DIF.
He said that as of end-February, the DIF stood at P72.62 billion, 12 percent more than the P64.91 billion recorded in the same month last year.
The DIF accounts for about 4 percent of total insured deposits in the country’s banking system.
PDIC targets to raise the amount to 5 percent of insured deposits.
Officials said PDIC was keen on keeping the DIF at a comfortable level to ensure prompt payment of insurance claims.
They said prompt servicing of deposit insurance claims was necessary to help keep public confidence in the country’s banking sector.
Regulators said that despite the string of closures in the rural banking sector, the value of assets of failed banks accounted for an “insignificant” portion of the entire assets of the rural banking sector.