Financial Sector Assessment Program Update : Assessment of Philippines Deposit Insurance Corporation
The global economic and financial sector crisis of 2008-09 became a stark reminder to countries around the world of the need for an effective process for maintaining the confidence of depositors and resolving troubled financial institutions with th...
| Main Authors: | , |
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| Format: | Financial Sector Assessment Program (FSAP) |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2011/02/18019633/assessment-philippines-deposit-insurance-corporation http://hdl.handle.net/10986/16057 |
| Summary: | The global economic and financial sector
crisis of 2008-09 became a stark reminder to countries
around the world of the need for an effective process for
maintaining the confidence of depositors and resolving
troubled financial institutions with the least amount of
adverse impact on the financial sector and the community
served by the institutions. The role of deposit insurance
was highlighted during this difficult time. Nations without
a formal system found the need to reassure their citizens by
announcing formal government guaranties. Nations with
established systems were not immune from the public's
concern and as a result many increased the allowable
coverage. The Philippines, although somewhat immune from the
global crisis, none the less felt the impact of the crisis
and responded, as did other countries, by taking steps to
address the possible impact of the crisis by bolstering
depositor confidence. The Philippines stands out among its
Asian neighbors at being in the forefront of deposit
insurance. Long before deposit insurance became popular at
the peak of the Asian financial crisis of the late
1990's, the Philippines already had an established
formal deposit insurance system. The Philippine Deposit
Insurance Corporation (PDIC) is a government
instrumentality. It was established in June 1963 with the
passage of Republic Act (RA) 3591. The role of PDIC at that
time was to help build the banking sector by encouraging
citizens to save and to deposit those savings in the formal
banking system. It was to do this by assuring depositors of
the safety of their deposits by providing a government
sponsored insurance of up to a P 10,000 per depositor in the
event of a bank failure. The underlying motivation was to
promote a safe and sound banking system and to foster public
confidence in it. |
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