ELIZABETH E. OLLER
Vice President, Claims Group
Philippine Deposit Insurance Corporation

Outline of Presentation
I PDIC at a Glance
II Overview of PDIC as Deposit Insurer
III Compliance to Core Principle No. 17
Reimbursing Depositor
IV Communication Strategy for Reimbursing Depositor
V Handling Queries, Requests, Complaints
VI Communicating with the General Public
2

PDIC at a Glance
• A government instrumentality attached to the
Department of Finance
• Created on 22 June 1963 by virtue of Republic
Act 3591
• One of the oldest deposit insurers in the world
3

PDIC at a Glance
Public Policy Objectives
(Section 1, Republic Act 3591, as amended)
1. Depositor Protection
To promote and safeguard the interests of the depositing public by way of providing permanent and continuing insurance coverage on all insured deposits.
2. Financial Stability
To strengthen the mandatory deposit insurance coverage system to generate, preserve, and maintain faith and confidence in the country’s banking system, and protect it from illegal schemes and machinations.
4

PDIC at a Glance
PDIC Mandates
(Section 1, Republic Act 3591, as amended)
The Corporation provides deposit insurance of up to P500,000, the maximum insurance coverage.
Member-banks are assessed annually at a flat rate of 1/5 of 1% of their total deposit liabilities. The assessments are collected from member-banks semi-annually and form part of PDIC’s Deposit
Insurance Fund.
5

PDIC at a Glance
PDIC Mandates
(Section 1, Republic Act 3591, as amended)
Examination of banks, grants of
As
Co-REGULATOR bank investigation to contribute in the promotion of public confidence and financial stability in the economy
As RECEIVER/
LIQUIDATOR of
Closed Banks
Implementation of closure orders of the Monetary Board and preservation and administration and disposal of assets of closed banks for the benefit of its depositors and creditors
6

Overview of PDIC As Deposit Insurer
(Sections 14 and 16, Republic Act 3591, as amended)
To settle insurance claims of depositors in accordance with provision of the PDIC Charter
Settlement of Claims
“xxx as soon as possible xxx” or within 6 months (180 days) from date of filing except if the validity of the claim requires resolution of issues by another office/agency
Filing of
Claims 2 years after bank takeover
Enforcement of Claims
2 years after the 2-year period of filing of claims
7

Overview of PDIC As Deposit Insurer
(Sections 14 and 16, Republic Act 3591, as amended)
To settle insurance claims of depositors in accordance with provision of the PDIC Charter
Notification
Requirement
Letter notices to all depositors and
Publication of bank closure & prescriptive date of filing 3 consecutive weeks in a newspaper of general circulation &/or community newspaper
Accountability of PDIC
Failure to settle the claim within 6 months from the date of filing due to abuse of discretion, gross negligence, bad faith, or malice may subject the directors, officers or employees to imprisonment from 6 months to 1 year
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Overview of PDIC As Deposit Insurer
1 Start of Payout
2 Completion of payment
Baseline target of 30 days
Target range based on
• Size of closed bank
• Number and complexity of deposit accounts
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Overview of PDIC As Deposit Insurer
For accounts with balances of
≤ P15,000
• Banks with ≤ 20 branches
• Banks with > 20 branches
Waived Filing of Claims
(benefits at least 76% of total depositors)
18 days
28 days
For accounts with balances of
> P15,000
- Filing of Claims
• Banks with ≤ 20 branches
• Banks with > 20 branches
30 days
60 days
10

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1970 to 2013 (October)
Year
1970 – 1980
1981 – 1990
1991 – 2000
2001 – 2010
2011 – 2012
2013
(Jan. to Oct.)
Total
1963: MDIC @ 10k
1978: MDIC @ 15k
1984: MDIC @ 40k
Banks
45
217
156
163
53
15
INSURED DEPOSIT PAID (Amount in Millions)
Accounts
126,205
1,004,483
Amount (P)
70
3,089
Amount (US$)
2
71
286,257
494,431
336,622
51,057
649
1992: MDIC @ 100k
2004: MDIC @ 250k
2009: MDIC @ 500k
2,299,055
8,978
30,053
16,629
1,890
60,709
208
696
385
44
1,406
12

2009 : Maximum Insurance Coverage increased from P250,000 to P500,000
2010 : ISO Certification 9001:2008 awarded for the Quality
Management System on Claims Settlement Operations
: Automatic payment of small depositors (with balances of P5,000 and below)
: Adoption of alternative payment schemes for deposit insurance claims (Postal Money Order, Cash Card and
Cash Over the Counter)
2011 : Passed the ISO 9001:2008 1 st surveillance audit
: Increased the coverage of deposits for automatic payment from P5,000 to P10,000
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2012 : Passed the ISO 9001:2008 2nd surveillance audit
: Increased the coverage of deposits for automatic from
P10,000 to P15,000
: Adoption of a New Claims System
: Pilot Test Project Management as an approach to
Claims Settlement Operations
: Measure degree of compliance with 18 Core Principles
2013 : Renewed and passed ISO Certification 9001:2008
: Conduct of Self-assessment of Compliance to 18 CPs
And External Validation
: Stronger Public Assistance
: Adoption of the Project Management Approach
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Results of Project Management Approach
15

Continual Improvement of PDIC Quality
Management System for Claims Operations
PDIC Roadmap to 2016
Depositors, Banks,
Other Stakeholder
Depositors,
Banks, Other
Stakeholder
Public Awareness/Communications Strategy 16

Compliance to Core Principle No. 17
Reimbursing Depositors
Core Principle
& Criteria PDIC Programs
1. Prompt Access to
Deposit Insurance
Mandate
Corporate Target
6 months
- Less than 30 days
2. Clear Time Frame for Reimbursing
Depositor
Communication
Strategies
Public announcements
-newspaper, TV, radio
Publication of Notice to
Depositors
On-site closed bank’s information and assistance
Conduct of Depositors’ Forum
Posters and advisories at bank premises and public places
17

Compliance to Core Principle No. 17
Reimbursing Depositors
Core Principle
& Criteria PDIC Programs
3 . Funding Fund Sources Permanent
Insurance Fund
- Access to other sources of funds
Borrowing
Issuance of bonds, debenture & other obligations
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Compliance to Core Principle No. 17
Reimbursing Depositors
Core Principle
& Criteria
4. Modes of
Claims
Payment
Payment
Scheme
PDIC Programs
- Direct Settlement
Release by PDIC Claims Payment
Agent over the counter in cash or cheque
- Transfer Deposits
Depositor/claimant goes to transferee bank to collect payment
- Postal Money Order (PMO)
Philippine Postal Corporation’s
PMO used to service depositors with account balances of P15,000 and below
19

Compliance to Core Principle No. 17
Reimbursing Depositors
Core Principle
& Criteria
4. Modes of
Claims
Payment
Alternative
Payment
Scheme
PDIC Programs
- Cash Card for accounts with balances of P5,000 to P100,000
The depositors using the cash card used as a mode of payment of deposit insurance may be able to withdraw from more than 800
LBP ATMs nationwide and in ATMs of member banks of major bank networks
- Cash Over The Counter for insurance claims payments up to MDIC of P500,000
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Compliance to Core Principle No. 17
Reimbursing Depositors
Core Principle
& Criteria
5. Information
Technology
IT
Infrastructure
PDIC Programs
- Web-enabled application
- Centralized database installed in the Home Office
- Accessible to system users in
Home Office and field offices around the Philippines
- Integrated modules for Masterlist of Deposit Liabilities,
Examination/Register generation and Claims Settlement Operations
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Compliance to Core Principle No. 17
Reimbursing Depositors
Core Principle
& Criteria PDIC Programs
6. Contingency Plan Critical
Resources
22
- Participated in Financial
Crisis Simulation Exercise with other safety net player in 2011
- Alternative Methods of
Claims Payout
- Different modes of claims payment
- Advance/Interim Insurance
Payout
- Emergency Payment Facility
- Support departments/ mechanism in placed
- Manpower Outsourcing
- Outsourcing of Selected
Functions to Auditing Firm
- Equipment rental/lease

Compliance to Core Principle No. 17
Reimbursing Depositors
Core Principle
& Criteria
7. Mechanism for
Anticipatory
Information
Access to deposit data prior to bank closure
PDIC Programs
- Bank Secrecy Law but with
Special Exam Power (Section 8 of
Charter)
- Threatened or impending closure of a bank
- Unsafe & unsound banking practice
- Infrastructure for bank performance monitoring Offsite
Bank Ratio Model
- Regulatory Issuance on Banks’
Records Keeping
- Financial Modeling Project (Stress
Testing & Bank Failure Prediction
Model)
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Press Statements
Issuance of 3
Press Statements
Bank Closure
Mailing of payment for small depositors (balances of
PHP15,000 and below)
Payout
Information o Name of Bank o Monetary Board Resolution number and date o Bank Owners o Head Office location and Number of banking units o Number of Bank Accounts o Coverage and Total insured deposits o Assurance from PDIC that all valid claims shall be paid up to a maximum of PHP500,000 (USD12,255) o Schedule and venue of Depositors-Borrowers Forums o Deadline for small depositors to update mailing address o Date the PDIC will start mailing of payments to small depositors o Target date to start Claims Settlement Operations o PDIC contact details o Number of accounts covered o Payment scheme information o PDIC contact details o Schedule of claims settlement operations o Deposit insurance claims procedure o Requirements o Information on filing claims o PDIC contact details
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Press Statements
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First Phase: Takeover
• Information dissemination
• Frontline depositor assistance
• Courtesy call with local government units
• Depositors / borrowers forum
• Distribution of control numbers
27

First Phase: Takeover
FRONTLINE DEPOSITOR ASSISTANCE
• Entertain queries
• Pacify irate depositors/clients
• Inform depositors of basic requirements in filing claim, schedule of depositors’ forum and claim settlement
• Distribute forms
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First Phase: Takeover
FRONTLINE DEPOSITOR ASSISTANCE
• Assist depositors in filling up forms
• Client Monitoring of depositor/borrower concerns
• Receive duly accomplished
Mailing Address Update Form for depositors not required to file deposit insurance claims
29

First Phase: Takeover
COURTESY CALL WITH LOCAL GOVERNMENT UNITS
• Courtesy call / attend LGU meetings
• Coordinate with local leaders and civic organizations 30

First Phase: Takeover
INFORMATION DISSEMINATION
• Post notices
• Call / text depositors
• Press releases to local media, place paid advertisements if necessary
PAD personnel visit barangays when necessary
31

First Phase: Takeover
DEPOSITORS / BORROWERS FORUM
TOPICS DISCUSSED
• Role of PDIC as Receiver / Insurer / Liquidator
• Application of the maximum deposit insurance coverage
• Settlement of Loan obligations
• Audio-visual presentation
• Steps/procedures in filing a claim
• Who are required to file, when, where
• Mode of PDIC payment
• How to fill-up Claim Form
32

First Phase: Takeover
DEPOSITORS / BORROWERS FORUM
CORE MESSAGE
• That PDIC will pay valid deposit insurance claims
• That PDIC is doing its best to process claims expeditiously
• That PDIC ensures that the right amount of deposit is paid to the right depositor
Q & A
33

First Phase: Takeover
DISTRIBUTION OF CONTROL NUMBERS
• Control numbers are preferably distributed in venues other than bank premises
34

Second Phase: Claims Settlement
DEPOSITOR ASSISTANCE
• Distribute queuing numbers
• Assist the elderly and persons with disabilities
35

Second Phase: Claims Settlement
DEPOSITOR ASSISTANCE
• Inform claimants of the procedures adopted during payout
• When necessary, assist claimants in filling up forms and check completeness of basic requirements 36

Home Office
Complementary Activities
Responds to Queries, Requests, Complaints
Client Feedback Survey
37

Home Office
Complementary Activities
• Call Center with Toll Free Number
38

Home Office
Complementary Activities
• PAD Helpdesk
• Emails / letters
39

Home Office
Complementary Activities
• Client Feedback
Survey
40

Queries, Requests, Complaints
January to October 2013
1,500
1,000
500
0
4,500
4,000
3,500
3,000
2,500
2,000
QUERY
REQUEST
COMPLAINT
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13
3,826
982
32
3,523
975
29
2,802
836
7
2,893
780
25
2,142
695
60
1,603
538
29
1,922
671
52
1,701
559
19
2,418
876
7
1,981
718
11
50
40
10
0
30
20
70
60
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Client Feedback Survey
October 2012 to October 2013 (Average)
5.50
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
4.85
4.86
4.84
4.86
4.77
4.77
4.80
4.75
4.92
4.90
4.88
4.91
4.92
4.84
1 2 3 4
OFFICES/FACILITIES
1 – Cleanliness
2 – Accessibility
3 – Complementary
Services
4 – Ventilation and Lighting
5 6 7
SYSTEMS/PROCEDURES
5- Clarity (Filing of Claims)
6- Clarity (Complying w/
Requirements)
7 – Promptness of Service
8 – Hassle-free processing of docs
8 9 10 11 12 13
PERSONNEL
9 – Courtesy
10- Competence
11- Efficiency
12-Proper and Pleasing Appearance
13- Ability to Communicate
14
14 – Overall
Quality of
Service
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Public Awareness Program
CORPORATE WEBSITE
• The website [www.pdic.gov.ph] provides information about PDIC and its programs.
45

Public Awareness Program
CORPORATE WEBSITE
The website [www.pdic.gov.ph] provides information on the waited average interest rate (WAIR) on time deposits of all commercial banks, promoting safe banking practices.
.
46

Public Awareness Program
FINANCIAL LITERACY INITIATIVES FOR THE DEPOSITING PUBLIC
• Be a Wise Saver (BAWS Campaign)
Students
Local Government Employee
47

Public Awareness Program
FINANCIAL LITERACY INITIATIVES FOR THE DEPOSITING PUBLIC
TOOLS FLYERS and POSTERS
INFO DISSEMINATION METHODOLOGIES
 PDIC – organized Be a Wise Saver Roadshows
– symposium / lecture type
– speakers from PDIC & partners
 FSF / Central Bank Financial Literacy Roadshows for students & working professionals
 Paid newspaper advertisement
48

Public Awareness Program
FINANCIAL LITERACY INITIATIVES FOR THE DEPOSITING PUBLIC
KEY MESSAGES
 PDIC mandate, importance of saving
 The Seven Habits & Wise Saver
1. Know your bank
2. Know your bank products
3. Know your bank’s services and fees
4. Keep your bank records safe and updated
5. Transact only inside the bank with authorized personnel
6. Be informed about PDIC deposit insurance
7. Be prudent
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Public Awareness Program
FINANCIAL LITERACY INITIATIVES FOR THE DEPOSITING PUBLIC
• PDIC Basic Secondary Education Module Development
Project (in cooperation with the Department of
Education and Culture)
• Financial literary project for public high school students
• Teachers’ Guide in the subjects
Values Education and Economics was launched in 2005
• Distributed to 5,500 public schools, benefited 6.3 M high school students annually
• Expanded to cover private high schools in 2007, and was translated to English.
• Discussions ongoing for update of the Teachers’ Guide to incorporate capital markets concept
• Project won the 1 st Gawad Pampublikong Korporasyon Award by the Office of Government Corporate Counsel 50

Public Awareness Program
FINANCIAL LITERACY INITIATIVES FOR THE DEPOSITING PUBLIC
• PDIC-Commission on Higher Education (CHED)-
Philippine Council of Deans and Educators in Business
(PCDEB) Tripartite Linkage
• Financial literacy project for university students
• PDIC established a
Memorandum of
Understanding with the CHED and PCDEB for the inclusion of financial literacy, savings consciousness, responsible banking and deposit insurance in the basic Finance subject of the Business Administration course.
• Benefited 500,000 college students enrolled in business courses
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Public Awareness Program
FINANCIAL LITERACY INITIATIVES FOR THE DEPOSITING PUBLIC
• Financial Literacy Guidebook
Launched on June 20, 2013 during the IADI Exco Meeting and
International Conference
The guidebook aims to educate the vulnerable sectors of society to handle their hard-earned savings. The handbook will cater to overseas Filipino workers (OFWs) and their families and beneficiaries, retirees, senior citizens & the academe
Initial distribution through partnership with Social Security System
(SSS) and Government Service Insurance System (GSIS)
52

Public Awareness Program
PARTNERSHIP WITH FINANCIAL REGULATORS
• Financial Sector Forum and multilateral committees
• Supervision of Financial Conglomerates Committee
• Supervision Methodology and Regulatory Policy
Coordination Committee
• Reporting, Information Exchange and Dissemination
Committee
• Consumer Protection and Education Committee
• Financial Stability Coordinating Council
• Memorandum of Agreement on Information Exchange with the Bangko Sentral ng Pilipinas (BSP)
• Financial Exposition roadshows of the BSP
53

Public Awareness Program
COORDINATING WITH BANKERS
• Bankers associations’ meetings /dialogues / briefings
• Compliance Officers’ Training course on BSP/PDIC
Regulatory Issuances
• Compendium of Regulatory Issuances and Bulletins
54

Public Awareness Program
COORDINATING WITH BANKERS
• PDIC Regulatory Issuance 2009-01 requires banks to prominently display PDIC official signs on maximum deposit insurance coverage and PDIC membership, prominently and continuously
Decals & stickers
Prominently and continuously posted at entrances of authorized banking units
Standee / desktop
Prominently and continuously displayed at teller’s counter/s or window/s
The PDIC Official Sign
Prominently and continuously posted / displayed at the ATM site or shown electronically / digitally on ATM screen
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eeoller@pdic.gov.ph
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