The Philippine Deposit Insurance Corporation (PDIC) recently signed a memorandum of agreement with the Land Bank of the Philippines (LBP) introducing two new payment schemes to service the payment of deposit insurance claims of depositors of closed banks.

The agreement was formalized between LBP President and Chief Executive Officer (CEO) Gilda E. Pico and PDIC President Valentin A. Araneta on December 6, 2012 at the PDIC in Makati City.

Depositors may now be paid through Manager’s Check issued by LBP and by crediting to their existing or newly-opened LBP accounts, both aimed at providing convenience and security to depositors. These additional payment schemes are expected to also benefit small depositors who have account balances of P15,000 and below and were required to file deposit insurance claims because they were not covered by the automatic payment via postal money order. They may opt to be paid through issuance of Manager’s Check or by credit to their LBP accounts.

Depositors are required to submit to the designated LBP branch the following: 1) duly signed PDIC Payment Notice/Slip with attached Acknowledgment Receipt and 2) original copy of at least one valid ID presented to PDIC during the filing of claims, as endorsed to LBP by PDIC, and another valid ID of the depositor/claimant acceptable to LBP.

The agreement also consolidated the various existing payment schemes employed to settle depositors’ deposit insurance claims such as cash card and cash-over-the-counter. In notifying depositors of the payment of their claims, PDIC sends payment notices to insured depositors instructing them to claim payment for their deposit insurance at a designated LBP branch.

To service depositors who are not required the requisite filing of deposit insurance claims or those who have savings and demand deposit account balances of P15,000 and below, PDIC continues to adopt the postal money order scheme which allows depositors increased access and immediate relief from bank closures by being able to encash the postal money orders with the local post office or LBP branch nearest to the closed bank’s location. Cash cards and the Manager’s Check or cash-over-the-counter scheme are used to pay claims amounting to more than P15,000.

Under the transfer deposit scheme, LBP is designated as transferee bank and will pay directly the closed bank’s depositors a transferred deposit equal to the insured deposit of the depositor.

The PDIC continues to conduct process and systems reviews to enhance its core operations particularly in implementing convenient deposit insurance payment schemes to better serve depositors of closed banks.

The Philippine Deposit Insurance Corporation (PDIC) was established on June 22, 1963 by Republic Act 3591 to provide depositor protection and help maintain stability in the financial system by providing permanent and continuing deposit insurance. Effective June 1, 2009, the maximum deposit insurance coverage is P500,000 per depositor. All deposit accounts by a depositor in a closed bank maintained in the same right and capacity shall be added together. A joint account shall be insured separately from any individually-owned deposit account.

PDIC news/press releases and other information are available at the website, www.pdic.gov.ph.