Please accept my warmest greetings to the Philippine Deposit Insurance Corporation (PDIC). For 54 years now, the PDIC has been an effective institution assuring protection for our small depositors. That protection, in turn, encouraged a culture of savings so important for the growth of our banking system, the aggregation of capital for investments and the modernization of the country’s financial system.

In recognition of the PDIC’s effective discharge of its responsibilities, the government has encouraged the observance of Depositor Protection and Awareness Week on June 16 to 22 every year. The observance intends to keep small depositors informed of the insurance covering their deposits. That keeps the level of public trust in our banking system that, in part, explains the growth of bank deposits. In 2016, bank deposits rose to P10.5 trillion over the P9.2 trillion of the year preceding.

Beyond playing its traditional role of providing insurance for small depositors, however, I encourage the PDIC to initiate programs to improve risk management and bank governance for the smaller bank. Since insurance premiums are pro-rated, the bigger and better-managed banks pay the larger share while the smaller banks are more prone to failure. Over the past few years, PDIC mainly paid out insurance to depositors of smaller banks. There should be a way to encourage better governance of smaller banks by making riskiness an input in the computation of premiums.

I am sure, with all the talent in the PDIC, this institution will continuously redefine its role in helping build a modern banking and financial system for the country.


CARLOS G. DOMINGUEZ
Secretary, Department of Finance
Chairman, PDIC Board of Directors