If you read the pinoy money talk fora, it seems that PDIC payments have slowed down. A lot of member-depositors are complaining of delays inspite of the submission of requirements e.i. affidavits. Depositors had executed affidavits, paid the notarial fees, personally traveled to the PDIC Makati office, expecting to receive check/s through the mail in reasonable time. But if you read the complaints, some have been waiting futilely for six or seven weeks.
What else can you expect from a government agency that has practically tied up its funds on long-term investments in the commercial banks. PDIC has no money: in fact, its president has practically admitted to media when he said that his company does not project to earn any profit this fiscal year considering the number of banks that have closed since December, 2008. He did not say it, but PDIC will lose money this year. In the meantime, hundreds of thousands of depositors of the closed banks are kept waiting and hoping, but only a few checks are mailed out by the PDIC. Those checks are intended to prop up the illusion that PDIC is fulfilling its obligations.
It would be most interesting to see how PDIC could make its statutory obligation to pay all valid claims within six months from the date of filing. We know of several claimants who filed on March 23, 2009, and September 23 would be the day of reckoning.
Showing posts with label claims. Show all posts
Showing posts with label claims. Show all posts
Sunday, August 30, 2009
Friday, July 24, 2009
Postponing Delaying Insurance Corp
A claimant reported that in a July 21 afternoon visit to the PDIC office, one of so many unproductive follow-ups on the status of his claims, he saw an old woman creating a drama scene: berating and shouting at the staff. She could not understand why PDIC was insisting that her children, who were in Singapore, and her friends, had to personally appear to file claims. The old woman just wanted that she alone (not even her husband who she claimed was sick) could do the filing for all of them.
The informant could not help but notice that the old woman was clutching a bunch of yellow claim slips, leading the former to think that "she might have invited the entire barangay to deposit (sic) in Legacy banks" and doubt "whether those were real persons or just fictitious names as the number of claims filed by her is questionably humongous."
If an ordinary depositor would have cause to think that this woman is really the owner of most of those deposits, then imagine what the PDIC would conclude, especially since their charter specifically provides that in determining the amount due to a depositor, "there shall be added together all deposits in the bank
maintained in the same right and capacity for his benefit either in his own name or in the name of others." It is a foregone conclusion that the old woman will not get her way and that even if she presented all her friends, there is no guarantee that PDIC will pay all the claims. Remember the PDIC lawyer? He said that they have ways and means to go beyond what the personal info sheets indicate for the deposits in order to find out who really is the beneficial owner of questionable accounts.
It is understandable that cases of using dummies and preneed check conversions are delaying the validation of accounts, and therefore holding up (some people say grinding down) the payout of claims. However, it has been almost eight months since the closure of banks and checks are just trickling in. It is almost inconceivable that a claimant is paid for one account, while other accounts (in the same bank) opened at the same time as that paid account is still being verified- same situation for his family members who opened accounts together with the paid claimant. There have been more instances where PDIC has required affidavits of one sort or another, than cases of actual payments made. We personally know of one family who received one check for one account but was asked to submit affidavits for 15 accounts, all in the same bank.
Claimants, even those who have been partially paid, have come to the realization that even though PDIC wants to pay valid depositors, it does not have enough liquid funds. It relies on its monthly assessment collections, which average about P600 million a month, net of taxes, to fund its issued checks. So if its payables for all the 13 Legacy banks is about P10 billion (not including the claims for the closed 13 non-Legacy banks), then expect that payouts will drag out for the next 14 months. But wait! Isn't PDIC mandated by its charter to pay within 6 months from the date of filing? It has to, and therefore expect PDIC to soon issue bonds to raise money or finally force PBCom to sell it shares in order to get back its P7.64 billion investment in the bank. If it cannot raise funds soon enough, then the acronym PDIC will come to mean: Postponing Delaying Insurance Corp.
The informant could not help but notice that the old woman was clutching a bunch of yellow claim slips, leading the former to think that "she might have invited the entire barangay to deposit (sic) in Legacy banks" and doubt "whether those were real persons or just fictitious names as the number of claims filed by her is questionably humongous."
If an ordinary depositor would have cause to think that this woman is really the owner of most of those deposits, then imagine what the PDIC would conclude, especially since their charter specifically provides that in determining the amount due to a depositor, "there shall be added together all deposits in the bank
maintained in the same right and capacity for his benefit either in his own name or in the name of others." It is a foregone conclusion that the old woman will not get her way and that even if she presented all her friends, there is no guarantee that PDIC will pay all the claims. Remember the PDIC lawyer? He said that they have ways and means to go beyond what the personal info sheets indicate for the deposits in order to find out who really is the beneficial owner of questionable accounts.
It is understandable that cases of using dummies and preneed check conversions are delaying the validation of accounts, and therefore holding up (some people say grinding down) the payout of claims. However, it has been almost eight months since the closure of banks and checks are just trickling in. It is almost inconceivable that a claimant is paid for one account, while other accounts (in the same bank) opened at the same time as that paid account is still being verified- same situation for his family members who opened accounts together with the paid claimant. There have been more instances where PDIC has required affidavits of one sort or another, than cases of actual payments made. We personally know of one family who received one check for one account but was asked to submit affidavits for 15 accounts, all in the same bank.
Claimants, even those who have been partially paid, have come to the realization that even though PDIC wants to pay valid depositors, it does not have enough liquid funds. It relies on its monthly assessment collections, which average about P600 million a month, net of taxes, to fund its issued checks. So if its payables for all the 13 Legacy banks is about P10 billion (not including the claims for the closed 13 non-Legacy banks), then expect that payouts will drag out for the next 14 months. But wait! Isn't PDIC mandated by its charter to pay within 6 months from the date of filing? It has to, and therefore expect PDIC to soon issue bonds to raise money or finally force PBCom to sell it shares in order to get back its P7.64 billion investment in the bank. If it cannot raise funds soon enough, then the acronym PDIC will come to mean: Postponing Delaying Insurance Corp.
Tuesday, June 30, 2009
Checks or Affidavits in the Mail? That is the Question
Remember Mrs. Lego? She just called yesterday to inform me that hallelujah! she received two mails the other Friday. One mail had a check containing P100,000, representing a time deposit that would have matured last January, 2009, if only it hadn't been overtaken by events.
The other mail was for her daughter's CTD, which contained a letter requiring her personal appearance at the PDIC office, something to do with a Legacy loan that she had incurred. Found out that her CTD was surrendered when she applied for that loan, and when she filed a claim, she had attached the acknowledgment receipt in lieu of the surrendered CTD. PDIC tracked the loan, and have asked the daughter to do an accounting of her monthly payments she had made as loan repayments. Fair enough!
There are some DEADBOL members that are receiving mails, some enclosed with checks but most with affidavits that have to be signed and notarized. A check with PDIC's documentary requirements revealed that affidavits of ownership or co-ownership, as the case may be, are solicited only when signature cards are missing or the signature in the card does not tally with the signature in the claim form. This is a valid requirement if it is not abused. However, we know of one family who received 15 letters, and all contained affidavits: it is statistically impossible that everyone of those accounts had missing signature cards or non-tallying signatures. All members of the family had personally visited the bank, filled up the specimen signature cards, and were old enough that their signatures are not expected to change through the years.
One cannot help but be suspicious that this is just another ploy of PDIC to further delay the payment of valid claims by stringing out the verification process.
The other mail was for her daughter's CTD, which contained a letter requiring her personal appearance at the PDIC office, something to do with a Legacy loan that she had incurred. Found out that her CTD was surrendered when she applied for that loan, and when she filed a claim, she had attached the acknowledgment receipt in lieu of the surrendered CTD. PDIC tracked the loan, and have asked the daughter to do an accounting of her monthly payments she had made as loan repayments. Fair enough!
There are some DEADBOL members that are receiving mails, some enclosed with checks but most with affidavits that have to be signed and notarized. A check with PDIC's documentary requirements revealed that affidavits of ownership or co-ownership, as the case may be, are solicited only when signature cards are missing or the signature in the card does not tally with the signature in the claim form. This is a valid requirement if it is not abused. However, we know of one family who received 15 letters, and all contained affidavits: it is statistically impossible that everyone of those accounts had missing signature cards or non-tallying signatures. All members of the family had personally visited the bank, filled up the specimen signature cards, and were old enough that their signatures are not expected to change through the years.
One cannot help but be suspicious that this is just another ploy of PDIC to further delay the payment of valid claims by stringing out the verification process.
Thursday, June 11, 2009
Rallying Inside a Makati Office
We were excited to hear Mrs. A. Lego's (she agreed to the use of her family name) account of her scheduled visit to PDIC SSS bldg. so I called her up today. She told us that she, again with her daughter, arrived inside the PDIC office at around 3.30 pm. She noted that the Makati rally (against ConAss) was building up all around, and here she was ready to conduct her own rally inside the PDIC premises.
As usual, she ended up in front of the information counter. She forgot to ask about Atty Elaine and talked with a customer assistance officer who told her to wait for a letter. She countered that she would not leave the office until she got her check, while waiving her ultrasound findings and her husband's senior's medicine booklet. The officer got her yellow slips, and told her to wait while he checked the status of her claims. He returned with the news that a check would soon be mailed to her, but for only one claim, the P100,000 time deposit that had matured last January, 2009. She requested that the claim of her husband be included, but was told that they could only settle one claim. She asked why they could not give her the check over-the-counter; she was told that checks are mailed. So Mrs. Lego is giving the PDIC until Tuesday next week to make good its promise.
Mrs. Lego's experience with PDIC provides us with two learning points:
a. If you are willing to create a scene in the PDIC office, and do it frequently, you may get a check mailed to you;
b. PDIC cannot pay all claims at the same time- Mrs. Lego and her children had a total of six CTDs but only one could be settled. This just confirms our contention that PDIC is insolvent despite its P61.5 billion DIF, and is settling claims based on its monthly collections from the banks. Using the verification process as an excuse is just that, a subterfuge to stall and delay paying legitimate claims.
Wouldn't it be interesting to know if or when Mrs. Lego actually receives her first check? Subaybayan...
As usual, she ended up in front of the information counter. She forgot to ask about Atty Elaine and talked with a customer assistance officer who told her to wait for a letter. She countered that she would not leave the office until she got her check, while waiving her ultrasound findings and her husband's senior's medicine booklet. The officer got her yellow slips, and told her to wait while he checked the status of her claims. He returned with the news that a check would soon be mailed to her, but for only one claim, the P100,000 time deposit that had matured last January, 2009. She requested that the claim of her husband be included, but was told that they could only settle one claim. She asked why they could not give her the check over-the-counter; she was told that checks are mailed. So Mrs. Lego is giving the PDIC until Tuesday next week to make good its promise.
Mrs. Lego's experience with PDIC provides us with two learning points:
a. If you are willing to create a scene in the PDIC office, and do it frequently, you may get a check mailed to you;
b. PDIC cannot pay all claims at the same time- Mrs. Lego and her children had a total of six CTDs but only one could be settled. This just confirms our contention that PDIC is insolvent despite its P61.5 billion DIF, and is settling claims based on its monthly collections from the banks. Using the verification process as an excuse is just that, a subterfuge to stall and delay paying legitimate claims.
Wouldn't it be interesting to know if or when Mrs. Lego actually receives her first check? Subaybayan...
Wednesday, June 10, 2009
How Many Visits Will It Take?
Mrs. AL called us up yesterday night , and she was so hyper. She said that she, together with her daughter, had just come from visiting PDIC SSS bldg office that afternoon. She admitted to creating a scene. She was crying and shouting in the information counter, first requesting, then demanding the release of a least one check. She has six time deposits, ranging from 50k to 100k, and she could not understand why it is taking PDIC so long to settle her claims.
She has a tumor in her breast, and needs a biopsy. She is now feeling pain in the other breast. Her husband recently suffered a third stroke, and manhid na daw ang left side of his face. Her son has a tricyle that is in danger of being repossessed because he is 3 months late in his amortizations. She has two daughters with kids who are late in their enrollment because of lack of funds.
Mrs. Al brought her ultrasound findings and the senior's card of her husband to show that it was filled up with entries of medicines purchased for his condition. She said that she would not leave the PDIC office until she got answers, and a check. The clerk told her that he would check the status of her claims but came back and told her that the computer system was down. Mrs. AL said that she resumed her crying but got a headache, which forced her to leave the PDIC office, but with a promise that she would be back.
We advised her to take it easy, that a headache could be a symptom of an impending stroke. It would not help any if she got a stroke, and if she survived it, she would be in the same condition like her poor husband. She said that is the reason why she left the PDIC office, in order to calm down. We suggested to her that the next time she goes back to the PDIC office, she should look for Atty Elaine Deticio, AVP for Claims, instead of talking to a clerk or desk staff. In our one and only meeting with Atty Elaine, she struck us as a sensible and professional individual who listened and cared, not only for the depositors but also for her staff. We cannot wait to hear from Mrs AL the next time we talk, and find out how she fared with a ranking PDIC officer, especially with Atty Elaine.
We can only imagine the tens of thousands of depositors who are in similar straits like Mrs AL who cannot understand why PDIC is taking its sweet time to return to return to them their hard-earned money to them. Mrs. AL knows that PDIC is not handling government funds, but money specifically intended to protect depositors like her. If there was such a thing as a small depositor (which there isn't per PDIC charter), then 65-year-old Mrs AL would be the epitome. And PDIC is the anithesis of an ideal insurer.
She has a tumor in her breast, and needs a biopsy. She is now feeling pain in the other breast. Her husband recently suffered a third stroke, and manhid na daw ang left side of his face. Her son has a tricyle that is in danger of being repossessed because he is 3 months late in his amortizations. She has two daughters with kids who are late in their enrollment because of lack of funds.
Mrs. Al brought her ultrasound findings and the senior's card of her husband to show that it was filled up with entries of medicines purchased for his condition. She said that she would not leave the PDIC office until she got answers, and a check. The clerk told her that he would check the status of her claims but came back and told her that the computer system was down. Mrs. AL said that she resumed her crying but got a headache, which forced her to leave the PDIC office, but with a promise that she would be back.
We advised her to take it easy, that a headache could be a symptom of an impending stroke. It would not help any if she got a stroke, and if she survived it, she would be in the same condition like her poor husband. She said that is the reason why she left the PDIC office, in order to calm down. We suggested to her that the next time she goes back to the PDIC office, she should look for Atty Elaine Deticio, AVP for Claims, instead of talking to a clerk or desk staff. In our one and only meeting with Atty Elaine, she struck us as a sensible and professional individual who listened and cared, not only for the depositors but also for her staff. We cannot wait to hear from Mrs AL the next time we talk, and find out how she fared with a ranking PDIC officer, especially with Atty Elaine.
We can only imagine the tens of thousands of depositors who are in similar straits like Mrs AL who cannot understand why PDIC is taking its sweet time to return to return to them their hard-earned money to them. Mrs. AL knows that PDIC is not handling government funds, but money specifically intended to protect depositors like her. If there was such a thing as a small depositor (which there isn't per PDIC charter), then 65-year-old Mrs AL would be the epitome. And PDIC is the anithesis of an ideal insurer.
Thursday, June 4, 2009
Figures don't Lie, but Liars Figure.
Remember Mrs. AL, the 64-year-old seamstress who went to PDIC SSS building on May 15 to beg for the release of a check to pay for a breast biopsy? She filed claims for six time deposits last March 24, 2009.
Well, she went back to the same PDIC office on Friday, May 30 to plead her case. Once again, she brought her ultrasound findings, and only got as far as the information counter. Once again, the poor woman was told to wait for a letter that would inform her of the status of her claims; the clerk told her that's the way it is. It has been almost ten long weeks since she filed her claims.
Mrs. AL is very desperate. Aside from her required biopsy, her 67-year-old husband Mr. RL suffered his third stroke last Sunday. When before he could talk though garbled, now he is mute. He needs to see a doctor, but his wife worries that the doctor would prescribe treatment that they can scarcely afford. It is a daily struggle for her to put food on the table and buy their maintenance medicines. She cannot understand why PDIC is taking so long to give her back her hard-earned money: they cannot even give her P50,000 which is the value of one of her CTDs.
It is therefore hilarious to read Mr. Nograles press release urging 34,000 account holders to file claims to speed up the processing of their claims. It is impossible to imagine that six months have already passed, but there are still a large 25% of the total accounts that remain unclaimed. And he wants more claims to be filed when PDIC has a hard time processing claims that were earlier filed. What game is he playing? The age-old game of Charade.
What is puzzling is his announcement that 51,847 accounts were already verified and are eligible for claims: of this number, 17,359 filed for claims, and 13,970 were already paid. Well, all these statistics mean nothing to Mr. and Mrs. RL who are in dire need of money- their money. Borrowing again the words of Disraeli and popularized by Mark Twain when statistics were used to bolster an argument: "There are three kinds of lies: lies,damned lies, and statistics."
And all that Mr. Nograles is trumpeting is this sad fact: that only those accounts below P15,000 have been paid out. Ask Mrs. AL and we are sure that she will agree to this Mark Twain quotation: figures don't lie, but liars figure!
Well, she went back to the same PDIC office on Friday, May 30 to plead her case. Once again, she brought her ultrasound findings, and only got as far as the information counter. Once again, the poor woman was told to wait for a letter that would inform her of the status of her claims; the clerk told her that's the way it is. It has been almost ten long weeks since she filed her claims.
Mrs. AL is very desperate. Aside from her required biopsy, her 67-year-old husband Mr. RL suffered his third stroke last Sunday. When before he could talk though garbled, now he is mute. He needs to see a doctor, but his wife worries that the doctor would prescribe treatment that they can scarcely afford. It is a daily struggle for her to put food on the table and buy their maintenance medicines. She cannot understand why PDIC is taking so long to give her back her hard-earned money: they cannot even give her P50,000 which is the value of one of her CTDs.
It is therefore hilarious to read Mr. Nograles press release urging 34,000 account holders to file claims to speed up the processing of their claims. It is impossible to imagine that six months have already passed, but there are still a large 25% of the total accounts that remain unclaimed. And he wants more claims to be filed when PDIC has a hard time processing claims that were earlier filed. What game is he playing? The age-old game of Charade.
What is puzzling is his announcement that 51,847 accounts were already verified and are eligible for claims: of this number, 17,359 filed for claims, and 13,970 were already paid. Well, all these statistics mean nothing to Mr. and Mrs. RL who are in dire need of money- their money. Borrowing again the words of Disraeli and popularized by Mark Twain when statistics were used to bolster an argument: "There are three kinds of lies: lies,damned lies, and statistics."
And all that Mr. Nograles is trumpeting is this sad fact: that only those accounts below P15,000 have been paid out. Ask Mrs. AL and we are sure that she will agree to this Mark Twain quotation: figures don't lie, but liars figure!
Saturday, May 16, 2009
The Legacy Bank Mess: Every Man for Himself (Part 5)
It took the BSP about two weeks to summarily reject PDIC’s loan request for P14 billion. The two weeks of deliberations were considered unusually long, given that in the past, the central bank normally decided on loan requests before deposit claims were paid out (PDIC had already started servicing savings accounts claims). The central bank must have had strong reasons to disapprove the loan from its erstwhile partner who needed to service the claims of tens of thousands of depositors of 12 nationwide banks when just five months ago, it had agreed to lend P3 billion to pay a few thousand depositors of one local bank.
Could one reason be political? It is a known fact that congressman Luis Villafuerte had failed in his campaign for the speakership of the House. Blogs have posited that the congressman used his wife, who sits in the Monetary Board (MB), to influence its unfavorable decision so as to embarrass Speaker Nograles, who has been identified as a legacy preneed depositor and rumored to be a legacy bank depositor. We have read newspaper articles reporting that congressmen, who had been persuaded by the speaker to put in money in the legacy banks, have threatened to unseat Nograles if they did not get their money back. They may have been assured by the speaker that his younger brother had their backs, guaranteeing immediate settlement of their deposits.
But it is improbable that Mrs. Villafuerte could by herself persuade her fellow board members to put its co-regulator in such an untenable situation unless there were more compelling arguments. And that justification would be prior knowledge: that the younger Nograles had known about the banking anomalies and irregularities unearthed during the 2005 BSP and PDIC investigations but had not acted on them. If the MB had considered the possibility of collusion and obstruction, then it would explain the otherwise inexplicable decision of the BSP to peremptorily turn down PDIC’s loan proposal. Now that we have established that BSP was completely cognizant of PDIC’s lack of liquidity by granting it a P3 billion loan late last year, BSP, if it really wanted to be of help, could have countered with a lesser loan amount, say half or P7 billion. However, it instead chose to turn its back on its erstwhile partner and leave PDIC literally holding the proverbial empty bag.
After more than 45 days of verifying the deposits of all the closed banks, the younger Nograles must have believed that he had enough data for him to go to the central bank and request for P14 billion. If the BSP had granted the loan, then PDIC would by now have paid most if not all of the legitimate deposits. However, the unexpected denial of its loan proposal has led Jose Nograles to likewise turn his back on Celso’s assurances of prompt payment to legacy bank depositors. Instead of doing his job of paying depositors as described by his older brother, the younger Nograles has done a 180 degree turnaround in an obvious attempt to preserve his job as PDIC president. It is now everyman for himself! He is now covering up his inexcusable negligence and dereliction by trying to impress to all and sundry that he is the protector of the DIF. He is now delaying, prolonging and avoiding payment to depositors, the very ones who are supposed to be protected and insured by PDIC and the DIF. When before he was complacent with the Celso de los Angeles, shareholders, silent partners and bank officers, he now acts as the vigilant guardian of the DIF, virtually accusing the depositors of conspiracy with Celso de los Angeles et al. He is blaming and pointing fingers to all and everyone except to himself.
His first move was to change the filing and claiming process. He now requires that a Special Power of Attorney (SPA) can only be executed if the original depositor is out of the country or medically incapacitated, contrary to common, legal, and traditional practice. One can buy or sell millions worth of property based on a notarized SPA for and in behalf of the vendee or the vendor who is healthy and lives next door, but to file for a P100,000 claim, it is disallowed by the PDIC. He now demands that minors 7 years old and above personally appear before PDIC claims officers and affix their signatures when common sense demands and actual banking practices do not require such. Because minors usually cannot sign their names, banks expect their parents or guardians to sign for them; however, PDIC demands that even 8 year olds sign the forms. He has floated the idea of mailing checks payments when everyone knows that postal fraud and malfeasance is not uncommon.
All of these modifications by PDIC of its own rules and practices are time-consuming and entails more costs to the depositors. However, these are inconveniences compared to the anxiety and consternation caused by his pronouncement that most accounts were doubtful because of missing bank records and discrepancies in recording done by accountable bank officers. This has caused bewilderment and trepidation among bank depositors who have no knowledge of banking procedures and certainly no control over what bank officers do or do not do with the funds deposited. What is important to a depositor is that he walks away from the bank with a duly signed and filled up certificate of deposit or passbook. Why is Nograles blaming the victim for acts of omissions and commissions done by the very people his organization the PDIC is supposed to supervise? Even if we already know the answer to that, how is Nograles going about blaming all others except himself and his agency? Part 6 hopes to derail this devious scheme of delaying and avoiding payment of legitimate deposits.
Could one reason be political? It is a known fact that congressman Luis Villafuerte had failed in his campaign for the speakership of the House. Blogs have posited that the congressman used his wife, who sits in the Monetary Board (MB), to influence its unfavorable decision so as to embarrass Speaker Nograles, who has been identified as a legacy preneed depositor and rumored to be a legacy bank depositor. We have read newspaper articles reporting that congressmen, who had been persuaded by the speaker to put in money in the legacy banks, have threatened to unseat Nograles if they did not get their money back. They may have been assured by the speaker that his younger brother had their backs, guaranteeing immediate settlement of their deposits.
But it is improbable that Mrs. Villafuerte could by herself persuade her fellow board members to put its co-regulator in such an untenable situation unless there were more compelling arguments. And that justification would be prior knowledge: that the younger Nograles had known about the banking anomalies and irregularities unearthed during the 2005 BSP and PDIC investigations but had not acted on them. If the MB had considered the possibility of collusion and obstruction, then it would explain the otherwise inexplicable decision of the BSP to peremptorily turn down PDIC’s loan proposal. Now that we have established that BSP was completely cognizant of PDIC’s lack of liquidity by granting it a P3 billion loan late last year, BSP, if it really wanted to be of help, could have countered with a lesser loan amount, say half or P7 billion. However, it instead chose to turn its back on its erstwhile partner and leave PDIC literally holding the proverbial empty bag.
After more than 45 days of verifying the deposits of all the closed banks, the younger Nograles must have believed that he had enough data for him to go to the central bank and request for P14 billion. If the BSP had granted the loan, then PDIC would by now have paid most if not all of the legitimate deposits. However, the unexpected denial of its loan proposal has led Jose Nograles to likewise turn his back on Celso’s assurances of prompt payment to legacy bank depositors. Instead of doing his job of paying depositors as described by his older brother, the younger Nograles has done a 180 degree turnaround in an obvious attempt to preserve his job as PDIC president. It is now everyman for himself! He is now covering up his inexcusable negligence and dereliction by trying to impress to all and sundry that he is the protector of the DIF. He is now delaying, prolonging and avoiding payment to depositors, the very ones who are supposed to be protected and insured by PDIC and the DIF. When before he was complacent with the Celso de los Angeles, shareholders, silent partners and bank officers, he now acts as the vigilant guardian of the DIF, virtually accusing the depositors of conspiracy with Celso de los Angeles et al. He is blaming and pointing fingers to all and everyone except to himself.
His first move was to change the filing and claiming process. He now requires that a Special Power of Attorney (SPA) can only be executed if the original depositor is out of the country or medically incapacitated, contrary to common, legal, and traditional practice. One can buy or sell millions worth of property based on a notarized SPA for and in behalf of the vendee or the vendor who is healthy and lives next door, but to file for a P100,000 claim, it is disallowed by the PDIC. He now demands that minors 7 years old and above personally appear before PDIC claims officers and affix their signatures when common sense demands and actual banking practices do not require such. Because minors usually cannot sign their names, banks expect their parents or guardians to sign for them; however, PDIC demands that even 8 year olds sign the forms. He has floated the idea of mailing checks payments when everyone knows that postal fraud and malfeasance is not uncommon.
All of these modifications by PDIC of its own rules and practices are time-consuming and entails more costs to the depositors. However, these are inconveniences compared to the anxiety and consternation caused by his pronouncement that most accounts were doubtful because of missing bank records and discrepancies in recording done by accountable bank officers. This has caused bewilderment and trepidation among bank depositors who have no knowledge of banking procedures and certainly no control over what bank officers do or do not do with the funds deposited. What is important to a depositor is that he walks away from the bank with a duly signed and filled up certificate of deposit or passbook. Why is Nograles blaming the victim for acts of omissions and commissions done by the very people his organization the PDIC is supposed to supervise? Even if we already know the answer to that, how is Nograles going about blaming all others except himself and his agency? Part 6 hopes to derail this devious scheme of delaying and avoiding payment of legitimate deposits.
Wednesday, April 29, 2009
The Legacy Bank Mess: An Expose of PDIC (Part 1)
The legacy mess created by Celso de los Angeles has once again rocked the already ailing preneed industry. The sudden closure last December, 2009 of Legacy Consolidated plans and its two affiliated preneed companies added an estimated 30,000 victims to the legion of planholders holding useless educational and pension plans. Although this development spelled more bad news for the floundering preneed industry, it was not unfamiliar to the public that had experienced years ago the closure of CAP, Pacific Plans, and several other companies in the business. If for anything, legacy plans had just delivered the final blow on a moribund industry.
What is insidious and potentially catastrophic is the deleterious effect of the collapse of the legacy banks on public confidence and faith in the banking system. Surprisingly, it is not Celso that is the villain in this unfolding scenario that is fraught with serious negative implications for the country's rural banking sector. The Philippine Deposit Insurance Corporation was established in 1963 with a single overriding mandate – to ensure public confidence in the banking industry. This is achieved by providing all depositors in all banks with an insurance coverage of P250,000; and second, by acting as the ‘receiver’ of failed or closed banks. Up until the closure of several legacy banks, PDIC has been faithfully fulfilling its current overall mandate “to provide depositor protection and strengthen public confidence in the banking system.” Hundreds of banks have closed and been declared insolvent since PDCI was created, but it had remained the faithful guardian and guarantor of the depositors’ money.
The PDIC Occasional Paper No. 1 2005 mentioned that “notwithstanding problems arising from the poor quality of record-keeping, PDIC’s continuing efforts at expeditious settlement of claims has paid off in terms of a shorter period of time for payouts. The average number of days to start payouts from date of closure has improved from 289 calendar days in 1993 to 41 calendar days in 2002, and single digit levels beginning 2003.” However, this progress is all set to be reversed and retrogress with the convoluted manner that PDIC is now conducting the filing, verification, processing and payout of legacy bank claims. It is twisting and bending its own policy, rules and regulations, and conjuring a new set of procedures that are tedious and time-consuming. Since the closure of the legacy banks before mid-December of 2008, PDIC President Jose Nograles defends its actions by explaining in numerous press releases that PDIC just wants to make sure that only “legitimate depositors” are paid because bank officials have not only lost banks records but created fictitious accounts. We understand the need for precautions but it seems that Nograles, reading his innumerable sound-and-print bites, would rather not pay the depositor who in good faith banked his hard-earned money than risk paying a fraudulent claim. As of now, almost 150 days since the closure of banks, only a miniscule percentage of depositors have been paid. None of the 100k accounts above, which account for about 75 percent of the total 135,000 accounts, have been paid. PDIC had previously adhered to the necessity of prompt payment of insured deposit claims, not only to maintain credibility and confidence in the deposit insurance system but just as important, to help eliminate possible contagion effects of closure. So why would PDIC, under the leadership of Jose Nograles, deliberately ruin its excellent track record of single digit days payout and run the real risk of eroding public confidence? The answer is both political and financial but before we delve into the dark motives of powerful men and hidden interests of big commercial institutions, we first need to expose the myths and propaganda that PDIC is peddling to the general public.
What is insidious and potentially catastrophic is the deleterious effect of the collapse of the legacy banks on public confidence and faith in the banking system. Surprisingly, it is not Celso that is the villain in this unfolding scenario that is fraught with serious negative implications for the country's rural banking sector. The Philippine Deposit Insurance Corporation was established in 1963 with a single overriding mandate – to ensure public confidence in the banking industry. This is achieved by providing all depositors in all banks with an insurance coverage of P250,000; and second, by acting as the ‘receiver’ of failed or closed banks. Up until the closure of several legacy banks, PDIC has been faithfully fulfilling its current overall mandate “to provide depositor protection and strengthen public confidence in the banking system.” Hundreds of banks have closed and been declared insolvent since PDCI was created, but it had remained the faithful guardian and guarantor of the depositors’ money.
The PDIC Occasional Paper No. 1 2005 mentioned that “notwithstanding problems arising from the poor quality of record-keeping, PDIC’s continuing efforts at expeditious settlement of claims has paid off in terms of a shorter period of time for payouts. The average number of days to start payouts from date of closure has improved from 289 calendar days in 1993 to 41 calendar days in 2002, and single digit levels beginning 2003.” However, this progress is all set to be reversed and retrogress with the convoluted manner that PDIC is now conducting the filing, verification, processing and payout of legacy bank claims. It is twisting and bending its own policy, rules and regulations, and conjuring a new set of procedures that are tedious and time-consuming. Since the closure of the legacy banks before mid-December of 2008, PDIC President Jose Nograles defends its actions by explaining in numerous press releases that PDIC just wants to make sure that only “legitimate depositors” are paid because bank officials have not only lost banks records but created fictitious accounts. We understand the need for precautions but it seems that Nograles, reading his innumerable sound-and-print bites, would rather not pay the depositor who in good faith banked his hard-earned money than risk paying a fraudulent claim. As of now, almost 150 days since the closure of banks, only a miniscule percentage of depositors have been paid. None of the 100k accounts above, which account for about 75 percent of the total 135,000 accounts, have been paid. PDIC had previously adhered to the necessity of prompt payment of insured deposit claims, not only to maintain credibility and confidence in the deposit insurance system but just as important, to help eliminate possible contagion effects of closure. So why would PDIC, under the leadership of Jose Nograles, deliberately ruin its excellent track record of single digit days payout and run the real risk of eroding public confidence? The answer is both political and financial but before we delve into the dark motives of powerful men and hidden interests of big commercial institutions, we first need to expose the myths and propaganda that PDIC is peddling to the general public.
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