In a bid to reengineer the Philippine Deposit Insurance Corporation (PDIC) to better serve the public, PDIC President Jose C. Nograles ordered the review of the Corporation’s systems relative to claims processing.

Nograles said that the unprecedented spate of closures in December 2008 prompted the deposit insurer to undertake a review and simplification of claims processes. “Admittedly, our claims systems and processes were not structured to cope with the voluminous number of accounts involved in the almost simultaneous closure of the 12 Legacy banks. No closures in past years since PDIC’s inception in 1963 had ever approached the breath and depth of these closures, which are unparalleled in Philippine banking history. The 12 Legacy banks alone had deposits of around P14 billion in about 135,000 accounts. In comparison, all the 17 banks closed in the whole of 2007 had combined deposits of only P1.6 billion in over 68,000 accounts. Not surprisingly, the Legacy closures challenged our systems and procedures as well as our resources”, Nograles said. “We will henceforth enhance our systems to be able to process huge numbers of accounts”, he added.

In addition to the 25 banks closed in 2008, the Monetary Board has closed 19 banks as of the first quarter of 2009. These successive closures have stretched PDIC’s resources to the limit. Nograles reiterated PDIC’s commitment to pay all valid deposit insurance claims. But the challenge is to validate the deposits and process claims as soon as possible. However, PDIC operations were hampered due to the huge number of Legacy deposit accounts and the dismal state of bank records, a substantial portion of which was missing. This, coupled with the allegations of fraud in the banks’ transactions, posed difficulties to seasoned examiners of PDIC.

To effect the process enhancements, PDIC engaged top notch consultant Prof. Ronaldo Polancos of the De La Salle University College of Industrial Engineering to undertake business process review of claims-related processes as well as simplification of documentary requirements. This will unburden depositors and contribute to the enhancement of operational efficiency and effectiveness in claims operations. Prof. Polancos, who holds a Masters of Science degree in Industrial Engineering, had successfully implemented various process reengineering projects involving business framework evaluation, process mapping, process documentation, and development of (International Organization for Standardization (ISO) compliant operations and process manuals for banks and leading corporations. He had also developed and implemented various IT solution platforms on different business processes in the telecom industry.

Much earlier, PDIC engaged the services of internationally-affiliated audit firms to assist in the examination of the Legacy banks as well as the conduct of forensic investigation to uncover the fraud schemes used by these banks.

Digital imaging is also being planned for the tons of bank records used for the examination and validation processes in the interest of efficiency,. This will speed up the review of documents and records review as well conserve physical space. In the Legacy banks alone, PDIC estimated that more than 2,000 boxes have been transported from the various bank premises to its head office in Makati City. The Corporation is also upgrading its One Claim System for ease in tracking status of deposit insurance claims. PDIC President Nograles said that all these are being undertaken to attain world-class status and enhance public service.

All of these will contribute to fasttracking settlement of deposit insurance claims. Meanwhile, PDIC appealed for patience from the depositors as PDIC is doing its best for expeditious settlement of deposit insurance claims within the bounds mandated by law.