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.
Showing posts with label insured deposits. Show all posts
Showing posts with label insured deposits. Show all posts
Saturday, May 16, 2009
Wednesday, May 13, 2009
The Legacy Bank Mess: A Parting of Partners (Part 4)
PDIC has a Deposit Insurance Fund (DIF) of 61 billion pesos but has outstanding obligations of P72.5 billion to the BSP. To the layman, it would seem that PDIC is bankrupt. And it may very well be, except for the assurance of Jose Nograles that "All [loans] are in current status and matched with identifiable repayment sources." Most people think that PDIC borrowed all this money from the BSP to supplement and replenish its DIF. It is not so. It is the BSP that initially grants emergency loans to distressed and troubled banks for a period of 90 days, extendable for another 90 days. If the bank is unable to pay these loans within the statutory 180 days, then these loans are transferred to the PDIC, which has less stringent requirements (PDIC accepts real estate properties as collateral). The loans turn into a PDIC assistance when the bank signs an agreement with the state insurer for a rehabilitation plan.
So why didn’t the BSP approve the legacy banks’ request for emergency loans? Because the BSP already knew that based on its (and PDIC'S) 2005 examination of the banks’ books, it did not have the required amount of government securities as collateral. So it allowed all 12 legacy banks to declare bank holidays, and then asked the PDIC to move in early December, 2008 and put the banks under receivership, which it did. Then, late January, 2009, PDIC exercised its charter that allows the insurer to borrow from the central bank to pay claims of depositors of banks placed under its receivership. On February, 2009, BSP disapproves the P14 billion loan request of the PDIC stating that PDIC “have more than enough (DIF) reserves to cover it (deposit claims).” But did it have even enough? Or the question should be, does PDIC have any reserves left?
In 2002, the BSP lent UCPB P25 billion in emergency loans. In 2003, PDIC paid out P8 billion in cash for the bank’s non-performing assets (NPAs). By 2005, PDIC still had P12 billion in loans to the bank. It was only in April, 2009 that PDIC approved the conversion of the P12 billion loan into equity with Nograles noting that the capital notes of PDIC will be converted into convertible preferred notes once the Supreme Court rules on the ownership issue of UCPB. Then in March, 2004, PDIC absorbed the P7.64 billion loan of Philipine Bank of Communications (PBCOM) and converted this into a soft 10-year term loan as part of its “financial enhancement package” where it only charged one percent in interest per year. The pact involves the eventual sale of 67 percent of the bank’s capital stock five years from the infusion of the financial package for the then-bleeding bank. PDIC has a lien on a substantial number of the bank shares: designed this way to make sure that PDIC will be protected in its financial rescue of P7.64 billion, clearly way above the buying offers for the bank’s shares. But now PDIC has a big headache in making its timetable to get its hands on its money it advanced to PBCom because the two warring major shareholders cannot resolve its disputes. In 2006, PDIC paid P3 billion for Export and Industry Bank’s NPAs and granted the bank a six-year term loan of P7 billion, paying PDIC an interest of one percent on the first year of availment and five percent on the next five years. EIB, in turn, used the P7 billion to purchase high-yielding government securities, which will be held in escrow for PDIC. PDIC has tied up P25.6 billion of its DIF as long-term loans and equity into the three banks. Add another 10 billion it paid in cash for the banks’ NPAs, and PDIC has sunk in P35.6 billion of DIF into the three banks.
It is not hard to imagine that it may have tied up the rest of the P61 billion DIF into other banks, considering that as of 2008, PDIC owed the central bank P72.5 billion. The BSP would have known the illiquid position of pdic and that is why in September, 2008, it approved a P3-billion loan for the PDIC to pay insured depositors of the padlocked G7 Bank, a seven-unit rural bank based in Bicol. “The BSP and PDIC are co-regulators. It’s our joint responsibility,” said PDIC president Jose Nograles, when asked about the new loan. But five months later, the BSP disapproved PDIC’s loan proposal that it needed to pay the depositors of 12 banks with more than a 100 branches located all over the country. The BSP maintained that PDIC had acquired “more than enough reserves” to pay P14 billion of insured deposits. PDIC nets about P6 billion cash a year in bank assessments and interest income, and it is therefore impossible for it to have accumulated P14 billion in five short months.
Why had BSP turned down an otherwise routine loan request? Why had it become PDIC’s sole responsibility, and not BSP’s co-responsibility? And faced with this unexpected rebuff and rejection, what is the younger Nograles saying and doing that is now endangering public confidence in pdic and the rural banking industry?
So why didn’t the BSP approve the legacy banks’ request for emergency loans? Because the BSP already knew that based on its (and PDIC'S) 2005 examination of the banks’ books, it did not have the required amount of government securities as collateral. So it allowed all 12 legacy banks to declare bank holidays, and then asked the PDIC to move in early December, 2008 and put the banks under receivership, which it did. Then, late January, 2009, PDIC exercised its charter that allows the insurer to borrow from the central bank to pay claims of depositors of banks placed under its receivership. On February, 2009, BSP disapproves the P14 billion loan request of the PDIC stating that PDIC “have more than enough (DIF) reserves to cover it (deposit claims).” But did it have even enough? Or the question should be, does PDIC have any reserves left?
In 2002, the BSP lent UCPB P25 billion in emergency loans. In 2003, PDIC paid out P8 billion in cash for the bank’s non-performing assets (NPAs). By 2005, PDIC still had P12 billion in loans to the bank. It was only in April, 2009 that PDIC approved the conversion of the P12 billion loan into equity with Nograles noting that the capital notes of PDIC will be converted into convertible preferred notes once the Supreme Court rules on the ownership issue of UCPB. Then in March, 2004, PDIC absorbed the P7.64 billion loan of Philipine Bank of Communications (PBCOM) and converted this into a soft 10-year term loan as part of its “financial enhancement package” where it only charged one percent in interest per year. The pact involves the eventual sale of 67 percent of the bank’s capital stock five years from the infusion of the financial package for the then-bleeding bank. PDIC has a lien on a substantial number of the bank shares: designed this way to make sure that PDIC will be protected in its financial rescue of P7.64 billion, clearly way above the buying offers for the bank’s shares. But now PDIC has a big headache in making its timetable to get its hands on its money it advanced to PBCom because the two warring major shareholders cannot resolve its disputes. In 2006, PDIC paid P3 billion for Export and Industry Bank’s NPAs and granted the bank a six-year term loan of P7 billion, paying PDIC an interest of one percent on the first year of availment and five percent on the next five years. EIB, in turn, used the P7 billion to purchase high-yielding government securities, which will be held in escrow for PDIC. PDIC has tied up P25.6 billion of its DIF as long-term loans and equity into the three banks. Add another 10 billion it paid in cash for the banks’ NPAs, and PDIC has sunk in P35.6 billion of DIF into the three banks.
It is not hard to imagine that it may have tied up the rest of the P61 billion DIF into other banks, considering that as of 2008, PDIC owed the central bank P72.5 billion. The BSP would have known the illiquid position of pdic and that is why in September, 2008, it approved a P3-billion loan for the PDIC to pay insured depositors of the padlocked G7 Bank, a seven-unit rural bank based in Bicol. “The BSP and PDIC are co-regulators. It’s our joint responsibility,” said PDIC president Jose Nograles, when asked about the new loan. But five months later, the BSP disapproved PDIC’s loan proposal that it needed to pay the depositors of 12 banks with more than a 100 branches located all over the country. The BSP maintained that PDIC had acquired “more than enough reserves” to pay P14 billion of insured deposits. PDIC nets about P6 billion cash a year in bank assessments and interest income, and it is therefore impossible for it to have accumulated P14 billion in five short months.
Why had BSP turned down an otherwise routine loan request? Why had it become PDIC’s sole responsibility, and not BSP’s co-responsibility? And faced with this unexpected rebuff and rejection, what is the younger Nograles saying and doing that is now endangering public confidence in pdic and the rural banking industry?
Friday, May 1, 2009
The Legacy Bank Mess: Half-truths are Whole Lies (Part 2)
George Orwell wrote that “We have now sunk to a depth at which the restatement of the obvious is the first duty of intelligent men.” Ordinary depositors who are alarmed and dismayed by the actions and actuations of PDIC formed a group called DEADBOL (Depositors Enabling All Depositors of Banks of Legacy,). The members call on PDIC to fulfill its overall mandate of protecting depositors. The group demands that PDIC performs its own published mission of adopting “responsive resolution methods” and ensuring “prompt settlement of insured deposit.” So far, five months have passed since the closure of legacy banks, and depositors, who had put their faith in PDIC, are starting to believe and realize that PDIC does not intend to honor its obligations to its insured depositors. PDIC is spouting a lot of half-truths so as to condition the public and we now see that it is DEADBOL’s duty to expose these irresponsible statements of commission or omission, and restate the truth.
Congressmen, senators, and media have the mistaken notion that PDIC is funded by people’s money; PDIC is content for reasons of its own not to disabuse them of this misinformation. PDIC is a government agency that administers a fund that does not use taxpayer’s money. Except for the initial seed money of P3 billion pesos from the government, the Deposit Insurance Fund (DIF) is basically funded from premiums paid by all operating banks. You can be sure that the banks have found out a way to pass on these assessments to the depositors who absorb these hidden costs. To characterize the DIF, which has grown to more than P61 billion pesos, as government funds is a half-truth. That is like saying that SSS and GSIS funds are also owned by the government. Fortunately, the truth is that these funds are private funds but unfortunately, managed by government officials who are driven by dark motives and hidden interests.
On February 9, 2009, PDIC came out with a press release that it is “prioritizing the claims of depositors with regular savings accounts of P100,000 and below in keeping with the state deposit insurer’s mandate to protect small, unsophisticated depositors. “ Nograles further qualified this half-truth by saying that “in keeping with the PDIC’s mandate to protect the small, unsophisticated depositors” and that “stopping the payouts as some quarters have suggested will be prejudicial to small depositors who have valid deposit insurance claims.” Nowhere in the PDIC charter can one find the words “small” and “unsophisticated” but the PDIC president used both words to describe a depositor that his organization is supposed to protect. Now that the maximum insurance coverage is P500,000 per account, will Jose Nograles in servicing future claims say that a 100,000 pesos and below account represents a small depositor; P250,000, medium; and P500,000, big? Does having a small deposit make you an unsophisticated depositor? Where is Nograles getting his lexicon? Yes, we recall Senator Mar Roxas, during a senate hearing on the legacy mess, first using the words sophisticated and unsophisticated to describe both bank depositors and preneed investors. And the younger Nograles latched on to these words, as if to ingratiate himself with the legislative investigators. Labeling is a cognitive distortion which can lead to logical fallacies.
The truth is that the pdic is chartered “to promote and safeguard the interests of the depositing public by way of providing permanent and continuing insurance coverage on all insured deposits,” regardless of the size of the deposit but up to the statutory insurance coverage per account. It is a fact that this is the first time that PDIC has differentiated and prioritized claims according to the size of the account.
In congressional and senate hearings, Deputy Governor Espenilla, Jr. said that the BSP began investigating the Legacy banks as early as 2005. When a congressman asked Nograles why hadn’t PDIC earlier conducted its own investigation of the legacy banks, we heard Nograles mumble that due to bank secrecy laws, PDIC could only examine individual bank accounts only after a bank has been placed under receivership. This is a half-truth. BSP Governor Tetangco, Jr. in a August, 2005 speech to a financial forum says that he is “happy to report ……, our partnership with local financial regulators (SEC, IC and PDIC), is now fully operational with major projects currently underway. These projects include conglomerate mapping, information sharing, joint examination arrangements, rules harmonization and financial literacy.” The PDIC Forum 2004 proudly announced that RA 9302, the Amended PDIC Charter signed into law on July, 2004, enhanced “PDIC’s capability to minimize risks to the DIF by reinstating its authority to examine banks subject to prior approval of the Monetary Board” and investigate complaints related to unsafe and unsound banking practices. The PDIC newsletter trumpeted that this authority will fortify the financial sytem’s safety net by “allowing prompt remedial intervention.” Dictionaries define prompt as “performed with little or no delay” and remedial as “tending to improve or rectify.” Given then PDIC’s enhanced examination powers, did PDIC examine the books of the banks before the banks actually closed? And if it did, did it delay intervention until it was too late? Part 3 will attempt to provide answers to these burning questions.
Congressmen, senators, and media have the mistaken notion that PDIC is funded by people’s money; PDIC is content for reasons of its own not to disabuse them of this misinformation. PDIC is a government agency that administers a fund that does not use taxpayer’s money. Except for the initial seed money of P3 billion pesos from the government, the Deposit Insurance Fund (DIF) is basically funded from premiums paid by all operating banks. You can be sure that the banks have found out a way to pass on these assessments to the depositors who absorb these hidden costs. To characterize the DIF, which has grown to more than P61 billion pesos, as government funds is a half-truth. That is like saying that SSS and GSIS funds are also owned by the government. Fortunately, the truth is that these funds are private funds but unfortunately, managed by government officials who are driven by dark motives and hidden interests.
On February 9, 2009, PDIC came out with a press release that it is “prioritizing the claims of depositors with regular savings accounts of P100,000 and below in keeping with the state deposit insurer’s mandate to protect small, unsophisticated depositors. “ Nograles further qualified this half-truth by saying that “in keeping with the PDIC’s mandate to protect the small, unsophisticated depositors” and that “stopping the payouts as some quarters have suggested will be prejudicial to small depositors who have valid deposit insurance claims.” Nowhere in the PDIC charter can one find the words “small” and “unsophisticated” but the PDIC president used both words to describe a depositor that his organization is supposed to protect. Now that the maximum insurance coverage is P500,000 per account, will Jose Nograles in servicing future claims say that a 100,000 pesos and below account represents a small depositor; P250,000, medium; and P500,000, big? Does having a small deposit make you an unsophisticated depositor? Where is Nograles getting his lexicon? Yes, we recall Senator Mar Roxas, during a senate hearing on the legacy mess, first using the words sophisticated and unsophisticated to describe both bank depositors and preneed investors. And the younger Nograles latched on to these words, as if to ingratiate himself with the legislative investigators. Labeling is a cognitive distortion which can lead to logical fallacies.
The truth is that the pdic is chartered “to promote and safeguard the interests of the depositing public by way of providing permanent and continuing insurance coverage on all insured deposits,” regardless of the size of the deposit but up to the statutory insurance coverage per account. It is a fact that this is the first time that PDIC has differentiated and prioritized claims according to the size of the account.
In congressional and senate hearings, Deputy Governor Espenilla, Jr. said that the BSP began investigating the Legacy banks as early as 2005. When a congressman asked Nograles why hadn’t PDIC earlier conducted its own investigation of the legacy banks, we heard Nograles mumble that due to bank secrecy laws, PDIC could only examine individual bank accounts only after a bank has been placed under receivership. This is a half-truth. BSP Governor Tetangco, Jr. in a August, 2005 speech to a financial forum says that he is “happy to report ……, our partnership with local financial regulators (SEC, IC and PDIC), is now fully operational with major projects currently underway. These projects include conglomerate mapping, information sharing, joint examination arrangements, rules harmonization and financial literacy.” The PDIC Forum 2004 proudly announced that RA 9302, the Amended PDIC Charter signed into law on July, 2004, enhanced “PDIC’s capability to minimize risks to the DIF by reinstating its authority to examine banks subject to prior approval of the Monetary Board” and investigate complaints related to unsafe and unsound banking practices. The PDIC newsletter trumpeted that this authority will fortify the financial sytem’s safety net by “allowing prompt remedial intervention.” Dictionaries define prompt as “performed with little or no delay” and remedial as “tending to improve or rectify.” Given then PDIC’s enhanced examination powers, did PDIC examine the books of the banks before the banks actually closed? And if it did, did it delay intervention until it was too late? Part 3 will attempt to provide answers to these burning questions.
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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