The PDIC is the statutory receiver and liquidator of closed banks. PDIC takes over banks ordered closed by the Monetary Board; administers closed banks' assets, records and affairs; and preserves and disposes these assets for the benefit of the creditors and uninsured depositors.

When the Monetary Board orders the liquidation of a bank that has been placed under receivership, its assets are managed, liquidated, and distributed to creditors and uninsured depositors according to the preference and concurrence of credits as provided for by the Civil Code of the Philippines.