The Department of Finance (DOF) said the PHP107-billion Philippine Deposit Insurance Corporation (PDIC) funds remitted to the national government are unrestricted funds that can be used for other purposes and will not affect the PDIC’s reserve funds.
“These are unrestricted, meaning they are free to use for other purposes. These are composed of cash and investment balances and are net of restricted funds,” the DOF said in a statement Thursday.
The PDIC still has a reserve fund worth PHP250 billion called the Deposit Insurance Fund (DIF), the DOF said.
Unlike unrestricted funds, this is strictly reserved for specific uses, like deposit insurance payouts to bank clients and financial assistance to banks during emergencies.
This is equivalent to at least 5.5 percent of the country’s estimated insured deposits, which is well within the PDIC Board’s target range of 5 to 8 percent.
“One thing I can say is this, one, they have sufficient DIF roughly at PHP250 billion if I’m not mistaken. The DIF is way above international standard,” said Finance Secretary Ralph Recto in a separate briefing Thursday.
The DOF assured the public that taking out the excess funds would not affect PDIC’s reserve funds.
It said the DIF, intended for protecting bank deposits are intact and remains very adequate to cover risks in the banking system, adding that the PDIC is still capable of delivering its services effectively, in case of insurance calls.
Data provided by the DOF showed that as of November last year, the PDIC only paid PHP282.31 million as of November 2024 for claims for deposit insurance liabilities.
It provisions PHP3.0 billion monthly to build up the DIF and to maintain the level of the DIF ratio.
The DOF earlier said the PDIC remittance significantly contributed to funding major infrastructure and social programs, such as the maintenance, repair, and rehabilitation of major infrastructure facilities; Protective Services for Individuals and Families in Difficult Circumstances/Assistance to Individuals in Crisis Situations; Philippine Food Stamp Program; various projects to advance the government’s disaster-related infrastructure projects; and rural electrification efforts through the Financial Subsidy for the Purchase of Photovoltaic Mainstreaming.
The funds also supported counterpart financing for foreign-assisted projects, including the Panay-Guimaras-Negros Island Bridges; Metro Manila Subway Project; Philippine Multi-Sectoral Nutrition Project; Mindanao Inclusive Agriculture Development Project; Cebu-Mactan Bridge and Coastal Road Construction Project; North-South Commuter Railway System; Support to Parcelization of Lands for Individual Titling Project; Teacher Effectiveness and Competencies Enhancement Project; and Philippine Fisheries and Coastal Resiliency Project.
“I’d rather get more dividends from performing GOCCs than raise your taxes, right or additional borrowings,” said Recto. (PNA)
