AMID the widening crisis among global banks, state-run Philippine Deposit Insurance Corp. (PDIC) said it would strengthen its oversight function to promote financial stability and protect depositors of local lenders.

In a statement, Jose Nograles, PDIC president, said the state insurer is reviewing its regulatory issuances to serve better depositors’ interest.

The PDIC provides deposit insurance for an account of no more than P250,000, or for 95.12 percent or 31.98-million deposit accounts in the country.

As co-regulator of banks, PDIC has the authority to conduct bank examinations in collaboration with the Bangko Sentral ng Pilipinas. It also issues regulatory issuances, which are regulations for compliance by banks promulgated by the PDIC to help improve bank operations and promote transparency.

Among the regulations being reviewed pertains to proper record keeping. This is a significant issuance aimed at assisting PDIC evaluate the financial health of banks and help in risk management. Proper record keeping also redounds to the benefit of depositors as they are assured that their bank transactions are accurately recorded, the state insurer said.

Nograles said the on-going review would result in the enhancement of existing regulation for better effectiveness. It may also result in the promulgation of new issuances. A parallel review of PDIC’s bank examination functions is also underway.

“The depositor interest is well-served by contributing towards a robust banking system. This calls for strengthening of PDIC’s oversight functions,” the state insurer’s president said. (The Manila Times - October 8, 2008) --Maricel E. Burgonio