State-run Philippine Deposit Insurance Corp. (PDIC) is targeting to dispose of 807 real properties and resolve 17,826 loan accounts in closed banks in a bid to clean up its non-cash portfolio this year.
PDIC President and CEO Roberto Tan reported that since 2019 the state deposit insurer has already disposed of 2,917 real properties, 507 of which were sold as of June.
Tan also told Finance Secretary Carlos G. Dominguez III during a recent executive committee meeting that they have so far resolved 66,249 loan accounts of borrowers in closed banks from 2019 to 2021.
Proceeds from the disposal of PDIC’s non-cash assets go to the funds held in trust for closed banks to help increase the chances of closed-bank creditors and uninsured depositors to recover their funds. Creditors’ claims are settled by PDIC as liquidator, in accordance with the rules on concurrence and preference of credits.
Tan also told Dominguez, who chairs the PDIC Board, that the state deposit insurer is also aiming to reduce its non-cash portfolio this year by adopting electronic bidding processes for properties that started on April 8.
It is also implementing the Closed Bank Loan Incentive Program (CLIP), which offers easy payment and zero penalty initiative to borrowers of banks that were ordered closed by the Monetary Board.
CLIP offers substantial discounts to closed-bank borrowers with principal loan balances of P1 million and below and who will opt to pay through a one-time cash settlement.
The Deposit Insurance Fund, which is the capital and funding source for payment of deposit insurance, grew by 15 percent or P30.7 billion year-on-year to P234.84 billion as of July.
In the same period, the PDIC also saw its total assets rising by 3.6 percent to P302.84 billion. The growth was driven by assessment collections amounting to P29.64 billion and P6.82 billion in income on investments.
Meanwhile, liabilities slid by 22.8 percent to P68 billion as of July.
For the first half of the year, PDIC paid P470 million in insured deposits from four banks ordered closed by the Monetary Board, particularly Occidental Mindoro Rural Bank, Palm Tree Bank in Cagayan de Oro City, Rural Bank of Alimodian in Iloilo, and the Rural Bank of Caloocan.
PDIC is also preparing to settle the claims on two other closed banks—the Rural Bank of Datu Paglas in Maguindanao and the Grand Agri Rural Bank in Lucena City, Quezon.
To improve the settlement of claims, Tan said PDIC has allowed the online filing and release of payments through the Land Bank of the Philippines or through Postal Money Order or Delivery Express Mail Service.