Deposit Insurance and Financial Stability

Outline

- What PDIC is about

- Road Map

- Structure of the Banking System

- Going Forward

The Functions of PDIC

1. Depositor Protection through Deposit Insurance

2. The Management of the Deposit Insurance Fund (DIF)

3. Bank Examination and Resolution

4. Receivership and Liquidation of closed banks

5. Financial Stability and Public Awareness

PDIC Roadmap 2016

I. Early detection of bank weaknesses and fraud to prevent bank failure especially through fraud or mismanagement

II. Strengthening the organization and enhancing the financial and service capabilities of PDIC

III. Legislative agenda to pursue CBLA

IV. Public Engagement

V. Liquidation of non financial assets

II. Strengthening the organization and enhancing the PDIC’s financial and service capabilities

Business Process Reviews to constantly adapt to the Business Process Reviews to constantly adapt to the challenges to deposit insurance and financial challenges to deposit insurance and financial stabilitystability

Maintain a robust organizational framework including Maintain a robust organizational framework including hiring, career pathing and training policieshiring, career pathing and training policies

IADI Core Principles IADI Core Principles

III. Legislative agenda: Closed Bank Liquidation Act (CBLA)

Comprehensive law to govern the Takeover, Liquidation and Winding-Up of closed banks

Seamless transition through removal of the 90-day receivership period will be provided

Purchase and Assumption and Bridge Banking will be provided as additional modes of liquidation

PDIC’s authority on the Liquidation Process will be defined

Certain Exemptions to 1405

IADI Core Principle No. 12

“In order for a deposit insurance system to be effective it is essential that the public be informed on an on-going basis about the benefits and limitations of the deposit insurance system.”

Information Dissemination

Website

www.pdic.gov.ph

Oversight on Interest Rates on Deposits

BANKING INDUSTRY STRUCTUREAs of December 31, 2011(Amounts in Billion Php)

No. ofBanking % to Amount of % to

Area Offices Total Deposits Total

NCR 2,831 34.1% 3,639.7 67.8%Areas outside of NCR 5,472 65.9% 1,731.3 32.2%

Total 8,303 100.0% 5,371.0 100.0%

NCR68%

Outside NCR32%

Deposit Amount: P5,371.0 Billion

Banking Industry Structure, by AreaAs of December 31, 2011

NCR34%

Outside NCR66%

No. of Banking Offices: 8,303

BANKING INDUSTRY STRUCTUREAs of December 31, 2011(Amounts in Billion Php)

No. ofBanking % to Amount of % to

Area Offices Total Deposits Total

NCR 2,831 34.1% 3,639.7 67.8%Luzon 3,273 39.4% 939.4 17.5%Visayas 1,135 13.7% 461.9 8.6%Mindanao 1,064 12.8% 330.0 6.1%

Total 8,303 100.0% 5,371.0 100.0%

Banking Industry Structure, by IslandAs of December 31, 2011

NCR34%

Luzon39%

Visayas14%

Mindanao13%

No. of Banking Offices: 8,303

NCR68%

Luzon17%

Visayas9%

Mindanao6%

Deposit Amount (P5,371.0 B)

PHILIPPINE BANKING SYSTEMSELECTED INDUSTRY DATA (AS OF MARCH 2012)

in Billions % in Millions %

Commercial Banks 4,549.63 88.1% 30.30 75.5%Thrift and Rural Banks 615.22 11.9% 9.84 24.5%Total 5,164.85 100.0% 40.14 100.0%

Total Estimated Insured Deposits is P1,565.88 billion.

Amount Account

KB88%

TB & RB12%

AmountP5,164.85 B

KB76%

TB & RB24%

Accounts40.14 M

Philippine Banking System Total Deposits as of March 2012

Domestic Deposit Liabilities

Philippine Banking System

as of March 2012

Account % to Total Amount % to Total

(in thousands) (in millions)

P 10,000 & below 28,651 71.4% 37,046 0.7%

P10,000.01 - P 100,000 7,331 18.3% 259,389 5.0%

P100,000.01 -P 1,000,000 3,528 8.8% 1,068,072 20.7%

Over P 1,000,000 627 1.6% 3,800,340 73.6%

Total 40,137 100.0% 5,164,848 100.0%

DEPOSIT SIZE

Grand Total

P10K & below71%

P10K to P100K18%

P100K to P1M9%

over P1M 2%

Accounts40.14 M

P10K & below

1%

P10K to P100K

5% P100K to P1M21%

over P1M74%

AmountP5,164.85 B

Philippine Banking System Total Deposits, by Size of Accounts

Take on the Presentation

Global & Technological Developments are shaping the Industry and Regulation.

Overhead and economies of scales and process management are very important.

Information is very important.

PDIC at your service.