Philippine Deposit Insurance Corporation (PDIC) President Jose C. Nograles said that the initial payout operations that started last February 13, 2009 serviced initially the small depositors who maintained regular savings accounts of P100,000 and below in the 12 banks under PDIC receivership. This is in keeping with the PDIC’s mandate to protect the small, unsophisticated depositors. Stopping the payouts as some quarters have suggested will be prejudicial to small depositors who have valid deposit insurance claims.

Nograles said that based on the examination conducted by the PDIC and external audit firm, KPMG Manabat Sanagustin & Co., about 62% of deposit accounts were found to have been maintained in various types of accounts P100,000 and below and that 41% of these accounts are regular savings accounts. “The conduct of early payout for regular savings accounts P100,000 and below will benefit most the small depositors who have fallen victims to these closed banks,” he added.

PDIC had earlier engaged the services of KPMG to help speed up the examination of deposit records preparatory to the payout. As third party audit, KPMG helped segregate the clean deposit accounts from those that are questionable. All questionable deposit accounts are subject to further verification and will undergo a more rigid examination in compliance with standard procedures, to check for fraud and fictitious transactions.

President Nograles reiterated that PDIC will pay all valid claims for deposit insurance only. “All deposit accounts found to be fraudulent or fictitious will not be paid”, he said.

PDIC’s claims processes are standard operating procedures to ensure that the Corporation pays the right person with the right amount as provided by law. This is also a way to safeguard the PDIC’s Deposit Insurance Fund (DIF), the source of funds for payout of deposit insurance claims. Nograles said that all PDIC payouts are subject to audit by the Commission on Audit because the DIF is a public fund. Being a public fund, PDIC’s claim agents must exercise due diligence and comply with rules on claims processing.

In an advisory, the PDIC said that examination is still ongoing for regular savings accounts P100,000 and above; and all special savings accounts, current accounts and time deposits. The start of claims servicing for these accounts will be announced as soon as the examination is completed.

Data from the PDIC showed that regular savings account holders of P100,000 and below accounted for about 54,000 of the more than 130,000 in total deposit accounts maintained in the 12 closed banks namely: Rural Bank of Parañaque, Pilipino Rural Bank, Rural Bank of Bais (Negros Oriental), Rural Bank of San Jose (Batangas), Bank of East Asia, First Interstate Bank, Philippine Countryside Rural Bank, Dynamic Rural Bank, Nation Bank, Rural Bank of Carmen (Cebu), Rural Bank of DARBCI, and San Pablo City Development Bank.