March 22, 2017

The Philippine Deposit Insurance Corporation (PDIC) announced that it is constrained to suspend its deposit insurance and liquidation operations in the closed Rural Bank of Barotac Viejo (Iloilo), Inc. because of a temporary restraining order (TRO) and/or status quo ante order (SQAO) issued by the Court of Appeals 19th Division in Cebu City. PDIC took over the closed bank on February 24, 2017 after the Monetary Board ordered its closure and directed PDIC to takeover and proceed with its liquidation.

The TRO and/or SQAO was issued by the Court of Appeals because of the case filed by the owners of RB of Barotac Viejo which questioned the bank's closure. The 19th Division of the Court of Appeals (Cebu City), in a Resolution issued on March 13, 2017, enjoined the PDIC and the Monetary Board (MB) of the Bangko Sentral ng Pilipinas to desist from taking over and liquidating the RB of Barotac Viejo. It likewise directed the PDIC to return operations of RB of Barotac Viejo to its existing management including the money it garnished from the bank's accounts with other banks. The TRO and/or SQAO will be effective for 60 days from March 21, 2017, unless sooner lifted.

Total payments of PHP30.5 million via postal money orders involving 2,659 accounts have been earlier endorsed by PDIC to the Philippine Postal Corporation for mailing to depositors with balances of PHP 100,000 and below where filing of claims is waived and a number of depositors have already received their deposit insurance payments. PDIC has likewise concluded the servicing of claims onsite for both the Head Office and Concepcion Branch on March 16, settling claims for 606 accounts amounting to PHP77.7 million.

However, the TRO and/or SQAO prevented PDIC from fulfilling its commitment to pay remaining depositors of their deposit insurance claims at the soonest possible time. This temporary setback constrained PDIC to suspend deposit insurance operations. PDIC is prevented from accepting claims and releasing payments for deposit insurance.

PDIC's liquidation operations are likewise suspended. PDIC is prevented from accepting claims of creditors of the closed bank. The public is however advised that the deadline for filing claims against the closed bank's assets is suspended, according to PDIC.

Meanwhile, PDIC may continue receiving on voluntary basis payments from borrowers of the closed bank via various payment options. For fully paid accounts, however, PDIC is prevented from issuing a release of the mortgage until the TRO and/or SQAO is lifted.

PDIC President Roberto B. Tan reassured depositors and creditors of RB of Barotac Viejo that the Corporation is committed to safeguard their interest and will exhaust all legal remedies available to enable PDIC to continue the payment of deposit insurance and the servicing of the bank's creditors at the soonest possible time.

Depositors, creditors and borrowers of RB of Barotac Viejo are advised to await further developments on the case through announcements made at PDIC's official website, www.pdic.gov.ph and facebook account, and through local media networks. They may communicate with PDIC by calling the PDIC Public Assistance Hotlines at (02) 841-4630 to (02) 841-4631, or send their e-mail to pad@pdic.gov.ph. Concerned clients of the bank who are outside Metro Manila may also call PDIC at its Toll Free Hotline at 1-800-1-888-PDIC (7342). Inquiries may also be sent via private message to the official PDIC Facebook account at www.facebook.com/OfficialPDIC.

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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 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.