One of the basic elements in the Philippine Deposit Insurance Corporationís (PDIC) roadmap is to continually improve its operations to serve the public better. Its latest project is to become compliant with the Core Principles for Effective Deposit Insurance Systems of International Association of Deposit Insurers (IADI). This will enable it to benchmark its capabilities and performance against global best practices of deposit insurers.
The Core Principles (CP) is a set of internationally agreed-upon principles aimed at enhancing the effectiveness of deposit insurance systems worldwide. It is a result of the collaboration of the IADI, a non-profit organization established to contribute to the stability of financial systems by promoting international cooperation in the field of deposit insurance, with the Basel Committee on Banking Supervision (BCBS). Similar to the Core Principles for banking supervision, the CP for Effective Deposit Insurance Systems identify broad policy directions for deposit insurers to enhance effectiveness of deposit insurance agencies.
Subsequently, a Methodology for Assessment of Compliance with the Core Principles was drawn up jointly by the IADI and the BCBS in close collaboration with the International Monetary Fund (IMF), World Bank, European Commission and the European Forum of Deposit Insurers. It has been included in the Financial Stability Boardís (FSB) 12 key international standards for financial stability. The CP Methodology is used by the IADIís External Assessment Team in assessing a deposit insurerís compliance with the CPs. Several deposit insurers in countries like Malaysia and Albania have been assessed for compliance with the CPs. Meanwhile, the World Bank and the IMF also plan to use the Methodology in conducting their regular Financial Sector Assessment Program reviews.
For its part, the PDIC recently created its IADI-Counterpart Assessment Team (I-CAT) to prepare PDIC for the assessment to be conducted by the External Assessor Team from IADI. The I-CAT is composed of officers from different sectors of the PDIC and chaired by Executive Vice President Imelda S. Singzon. PDIC recently sent six members of the I-CAT to Kuala Lumpur, Malaysia to attend the Regional Workshop on Core Principles Compliance Assessment hosted by the Malaysia Deposit Insurance Corporation. Along with delegates from other deposit insurers around the world, the six PDIC trainees underwent a three-day workshop to build skills in assessing compliance with the Core Principles. Based on learnings from the Workshop, PDICís self-assessment will be fine-tuned and existing gaps addressed. This is in preparation for subsequent assessment by the IADI External Assessor Team.
PDIC President Valentin A. Araneta said that the PDIC aims to attain full compliance by 2013. This is expected to result in increased effectiveness of the deposit insurance system in the country, thus benefiting depositors and other stakeholders.
The PDIC is a founding member of the IADI and PDIC President Araneta was elected as member of IADIís policy-making body, Executive Council. He is Vice Chairman of the IADI Audit Committee.
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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.