The P7.6 billion financial assistance extended by the Philippine Deposit Insurance Corporation (PDIC) to the Philippine Bank of Communications (PBCom) is fully collateralized by government securities, which are all in the custody of PDIC. Thus, public interest is safeguarded at all times. This assurance was made by PDIC Executive Vice President Cristina Q. Orbeta.

The terms of the Financial Assistance Agreement (FAA) signed by the PDIC and the major stockholders in 2004 entitled the PDIC to four seats in the bank's Board of Directors. This was in cognizance of the PDIC's status as a major creditor. All the shareholders agreed to nominate, elect and install the four directors to be nominated by PDIC.

The FAA provided for a custodianship agreement wherein the major stockholders endorsed, delivered and entrusted custody to the PDIC of their 67% “controlling interest”shares. The delivery of these shares under the custodianship agreement is intended for the sole purpose of ensuring compliance with the FAA, in particular, the sale of shares as a block and to prevent the major shareholders from effectively pledging or encumbering their shares. PDIC emphasized that the custodianship agreement does not constitute a pledge of the major stockholders' “controlling interest”shares in favor of PDIC.

In the meantime, PDIC has been advising the major stockholders in no uncertain terms that they have to resolve their internal disputes in a collective manner as provided in the FAA. The major stockholders have been doing their best to convince PDIC to support one side against the other on what PDIC deems to be purely private issues among the major stockholders. PDIC maintains its policy of neutrality.

PDIC stressed that the financial assistance agreement provides for certain courses of action in case of non-compliance. PDIC has been taking the necessary and appropriate steps to enforce the provisions of the FAA. The terms and conditions of the financial assistance agreement adequately protect the interests of the government, the taxpayers, and bank depositors, Orbeta said.