Bicameral panel OKs bill hiking deposit insurance
03/05/2009 | 03:24 PM
MANILA, Philippines - The bicameral conference committee has approved a measure doubling the maximum deposit insurance coverage to half a million pesos.
According to the senate website, disagreeing provisions of the proposed law — a consolidation of Senate Bill 2964 and House Bill 5911 — have been “ironed out."
The harmonized version is expected to be ratified by both chambers of Congress before legislators go on recess. President Gloria Macapagal Arroyo had earlier certified the measure as urgent.
During the bicameral meeting, Senator Edgardo Angara – principal sponsor and author of the bill – said the passage of the amended PDIC charter will help “regain and further increase public confidence to the local banking system amidst the global financial crisis."
“The real winner behind this endeavor is the PDIC and ultimately, the Filipino depositor. The act of amending its charter constitutes a single task for PDIC, but what the Congress did now is one bold move. It goes to show that both chambers are very much willing to safeguard the interest of the depositing public," said Angara, who chairs Senate Committee on Finance.
He added that with this, they can guarantee the Filipinos of “safe, intact and readily available deposits but also sufficiency of credit to finance vital economic activities in the country."
The bicameral panel agreed to give the Philippine Deposit Insurance Corporation (PDIC) tax perks such as exemption from income tax, final withholding tax, and value-added tax on the assessments premiums paid by member banks.
However, a Senate proposal to exempt the PDIC from documentary stamp and capital gains taxes on the transfer of assets from banks was dropped.
It also allowed for the doubling of the maximum deposit insurance coverage up to P500,000 — a move expected to boost depositor confidence in the local banking system amid bank failures overseas.
Under the measure, the first P250,000 will be accounted for by the corporation while the remaining half shall be the “obligation of, and deemed automatically appropriated and paid by the national government."
Bridge bank
Meanwhile, the panel also agreed to adopt a Senate proposal to give PDIC a “bridge bank" authority. A bridge bank is a temporary bank licensed by the Bangko Sentral ng Pilipinas (Central Bank of the Philippines) asked to acquire assets and assume liabilities of a failed bank to facilitate its resolution.
However, bridge banks are only allowed to purchase assets, assume deposits and other liabilities which the PDIC may deem appropriate and perform such banking functions as the Monetary Board may authorize.
Members of the bicameral panel also scrapped a provision proposed by the Senate that lists the types of deposits not covered by insurance.
“The passage of the amended PDIC charter in the Senate is one bold move to place the country in a better position to be able to absorb shock from this credit crisis and financial turbulence," said Angara. - Kimberly Jane T. Tan, GMANews.TV
According to the senate website, disagreeing provisions of the proposed law — a consolidation of Senate Bill 2964 and House Bill 5911 — have been “ironed out."
The harmonized version is expected to be ratified by both chambers of Congress before legislators go on recess. President Gloria Macapagal Arroyo had earlier certified the measure as urgent.
During the bicameral meeting, Senator Edgardo Angara – principal sponsor and author of the bill – said the passage of the amended PDIC charter will help “regain and further increase public confidence to the local banking system amidst the global financial crisis."
“The real winner behind this endeavor is the PDIC and ultimately, the Filipino depositor. The act of amending its charter constitutes a single task for PDIC, but what the Congress did now is one bold move. It goes to show that both chambers are very much willing to safeguard the interest of the depositing public," said Angara, who chairs Senate Committee on Finance.
He added that with this, they can guarantee the Filipinos of “safe, intact and readily available deposits but also sufficiency of credit to finance vital economic activities in the country."
The bicameral panel agreed to give the Philippine Deposit Insurance Corporation (PDIC) tax perks such as exemption from income tax, final withholding tax, and value-added tax on the assessments premiums paid by member banks.
However, a Senate proposal to exempt the PDIC from documentary stamp and capital gains taxes on the transfer of assets from banks was dropped.
It also allowed for the doubling of the maximum deposit insurance coverage up to P500,000 — a move expected to boost depositor confidence in the local banking system amid bank failures overseas.
Under the measure, the first P250,000 will be accounted for by the corporation while the remaining half shall be the “obligation of, and deemed automatically appropriated and paid by the national government."
Bridge bank
Meanwhile, the panel also agreed to adopt a Senate proposal to give PDIC a “bridge bank" authority. A bridge bank is a temporary bank licensed by the Bangko Sentral ng Pilipinas (Central Bank of the Philippines) asked to acquire assets and assume liabilities of a failed bank to facilitate its resolution.
However, bridge banks are only allowed to purchase assets, assume deposits and other liabilities which the PDIC may deem appropriate and perform such banking functions as the Monetary Board may authorize.
Members of the bicameral panel also scrapped a provision proposed by the Senate that lists the types of deposits not covered by insurance.
“The passage of the amended PDIC charter in the Senate is one bold move to place the country in a better position to be able to absorb shock from this credit crisis and financial turbulence," said Angara. - Kimberly Jane T. Tan, GMANews.TV
