THE SENATE on Wednesday passed on second reading a bill amending the Philippine Deposit Insurance Corp. (PDIC) charter that would make it an attached agency of the Bangko Sentral ng Pilipinas (BSP).

Senate Bill 2365 is seen to enhance the coordination between PDIC and the BSP to boost the former’s operations. The PDIC is currently an attached agency of the Department of Finance.

Banking groups previously pushed for the passage of the bill as it would require the PDIC board of directors to review the maximum deposit insurance coverage every three years and allow them to increase the coverage based on inflation and other economic indicators that may be relevant.

To do this, the PDIC board will be allowed to get the service of independent actuarial consultants and other experts to consider the feasibility and sustainability of a higher maximum deposit insurance coverage.

At present, the PDIC provides a maximum deposit insurance coverage of P500,000 per depositor for each bank.

Senator Juan Edgardo M. Angara, who chairs the Senate finance committee, read out accepted amendments proposed by Senate Pro Tempore Ralph G. Recto.

New provisions include those on the assessment rate of member banks. The bill said the assessment rate will be determined by the board of directors provided that it will not exceed one-fifth of 1% per annum.

“The board of directors shall consider a mechanism that adjusts the assessment rate depending on the creditworthiness or the risk profile of the bank.”

It also said the board must establish the risk-based assessment system and impose a commensurate risk-based adjusted rate per annum per bank to ensure the sustainability of the corporation while rationalizing the financial burden on lenders.

The assessment of each insured bank will be determined by multiplying the adjusted annual assessment rate with the assessment base, but in no case should the assessment be less than P5,000 in words and figures.

Based on the initial copy, the board may establish a risk-based assessment system and rate that does not exceed two-fifths of 1% per annum multiplied by the assessment base. The semi-annual assessment for each insured bank was to be calculated from one-half of the assessment rate multiplied by the assessment base, noting still the P5,000 limit.

The assessment base will be the amount of the liability of the bank for deposits based on the total sum insured of the bank. The operating expense requirements of the corporation will be distinguished from the calculated risk pool of the bank and excluded from the calculation of the assessment base.

Mr. Angara said in case there is an increase in maximum insured deposit, the PDIC board will have the authority to adjust the assessment rate for banks, taking into consideration the current economic conditions and the adequacy and sustainability of the deposit insurance fund.

The corporation and the board of directors must maintain transparency in conducting all of these activities, he added. — A.N.O. Tan