RA 9576 April 29,2009

An act increasing the maximum deposit insurance, and in connection therewith,

Section 1 state policy and objectives: policy of the state to generate, preserve, maintain faith
and confidence in the country’s banking system, and protect it from illegal schemes and
machinations.
Government must extend all means for PDIC to fulfill its vital task of promoting and
safeguarding the interests of the depositing public by providing permanent ad continuing
insurance on all insured deposits, and in helping develop a sound and stable banking system.
Section 2 additional paragraph:
Deposit- the unpaid balance of money or its equivalent received by a bank in the usual course
of business and for which it has given or is obliged to give credit to a commercial, checking,
savings, time or thrift account, or issued in accordance with BSP rules and regulations, and
other applicable laws.
Together with such obligations of the bank, which is consistent with banking practices and
usage, the Board of Directors shall determine and prescribe by regulations to be deposit
liabilities.
Obligations of the bank payable to office outside of the Philippines are not considered deposits
or as insured deposits.
Provided: subject to the approval of the BOD, any bank incorporated in the Philippines which
has a branch outside may elect to include for insurance its deposit obligations payable only at
such branch.
The corporation shall not pay deposit insurance for the following:
1. Investment products (bonds, and securities, trust accounts, and other similar
instruments
2. Deposit accounts or transaction which are unfunded, or that are fictitious or fraudulent;
3. Deposit accounts constituting usage of unsound banking practice/s as determined by
the corporation, in consultation with the BSP after due notice and hearing, and
publication of cease-and-desist order issues by the Corporation against such deposit
accounts or transactions
 4. Deposits are determined to be proceed of unlawful activity as defined under RA 9160, as
amended.
The actions of the Corporation taken under this section shall be final ad executory, except:
-appropriate petition for certiorari (excess or lack of jurisdiction) filed within 30 days from
notice of denial of claim for deposit insurance.
Section 3
Insured deposit- amount due to any bona fide depositor for legitimate deposits n an insured
bank net of any obligation of the depositor to the insured bank. (not to exceed 500,000)
Determination of amount due based on the regulation of the board of directors:
Added together: legitimate deposits, and all deposits in the bank maintained for him or his own
(the depositor).
Separated: joint accounts (and or ‘or’) provided that:
(1) If account is held jointly by 2 or more natural persons or by 2 or more juridical persons,
the 500,000 or the amount insurance shall be divided into equal shares as there are
individuals, juridical persons or entities, unless a different sharing is stipulated in the
document of deposit.
(2) If account is held by a juridical person or an entity jointly with one or more natural
persons, the 500,000 or any amount of insurance shall be presumed to belong entirely
to such juridical person or entity
Provided: aggregate of the interest of each co-owner over several joint accounts
whether owned by the same or different combinations of individuals, juridical persons
or entities, shall be subject to the maximum amount of insured deposit 500, 000
-the rights to an insured deposit is non-transferable through the negotiation of
certificate of deposit unless the transferee’s name is registered as owner/holder in the
books of the issuing banks.
Section 4: maximum deposit insurance coverage of 500, 000 pesos. Provided: the 1st 3 years of
the enactment of this act, the 250,000 of the deposited insurance shall be for the account of
the Corporation, and the excess of 250, 000 but not more than 500, 000 shall be for the account
of the national government, the congress shall annually appropriate funding to reimburse the
corporation for any payment inured in excess of 250,000.
Section 5:
Required examination of bank should have prior approval of the monetary. Provided:
-no examination can be conducted within 12 months from the last examination date
- However, the corporation may, in coordination with the BSP, conduct a special examination
as the Board of Directors, by an affirmative vote of the majority of all its members, if there is
threatened closure of the bank.
-the corporation and/or the BSP may inquire or examine deposit accounts and all information
incase there is a finding of unsafe and unsound banking practice. Examination shall maximize
efficient use of relevant reports, information, and finding of the BSP, which it shall make
available to the corporation.
Section 6: unless there is willful violation of this act, performed in bad faith, with malice and/or
gross negligence, the corporation, its directors, officers, and employers and agents are held
free and harmless to the fullest extent permitted by law from any liability and indemnified,
without prejudice to any criminal liability under existing laws.
Section 7: section 9 (h) of the same Act is accordingly renumbered as Section 9 (i)
Section 8: it is the policy of the state that the Deposit Insurance Fund of the Corporation shall
be preserved and maintained at all times.
-all tax obligations of the Corporation reckoned from the date of the effectivity of this act shall
be chargeable to TEF (Tax Expenditure Fund in the GENERAL APPROPRIATION ACT EXECUTIVE
ORDER # 93 OF 1986.
-the corporation in its 6th year, shall be exempt from income tax, final withholding tax, VAT on
assessments collected from member banks and local taxes.
Section 9: Section 17 (c) of the same Act shall be accordingly renumbered as Section 17 (d).
Section 10: section 19 is hereby amended as follows:

Section 19. with the approval of the president of the Philippines, the Corporation:

-Is authorized to issue bonds, debentures, and other obligations, both local and foreign, as
may be necessary for the purpose of providing liquidity for settlement of insured deposits as
well as for financial assistance.
--the Board of Directors shall determine the interest rates, maturity and other requirements
of said obligations.
- That the Corporation shall provide for appropriate reserves for the redemption or
retirement of said obligation.
-all obligations (issue bonds, debentures, and other obligations) shall be exempt from
taxation both as to principal and interest, and shall be fully guaranteed by the Government
of the Republic of the Philippines. Such guarantee, which in no case shall exceed two times
the Deposit Insurance Fund as of date of the debt issuance, shall be expressed on the face
thereof.
- Board of Directors shall have the power to prescribe rules and regulations for the issuance,
reissuance, servicing, placement and redemption as well as registration of such bonds at the
request of the holders thereof.
Section 11: Section 21, paragraph (f)(5) is hereby amended to read as follows

Splitting of deposits occurs whenever a deposit account with an outstanding balance of more
that the statutory maximum amount of insured deposit maintained under the name of natural or
juridical persons is broken down and transferred into two (2) or more accounts in the name/s of natural
or juridical persons or entities who have no beneficial ownership on transferred deposits in their names
within one hundred twenty (120) days immediately preceding or during a bank-declared bank holiday,
or immediately preceding a closure order issued by the Monetary Board of the Bangko Sentral ng
Pilipinas for the purpose of availing of the maximum deposit insurance coverage."

Section 12: An additional paragraph shall be inserted under Section 2, to read as follows:

"SEC. 2. xxx The Board of Directors shall have the authority: "xxx "7. To review the organizational
set-up of the Corporation and adopt a new or revised organizational structure as it may deem necessary
for the Corporation to undertake its mandate and functions."

Section 13: Joint Congressional Oversight Committee. Created to oversee the implementation of this act.
Shall be composed of the chairpersons of the Senate Committee on Banks, Financial Institutions and
Currencies and the Committee on Finance and five (5) senators to be appointed by the President of the
Senate, and the chairpersons of the House Committee on Banks and Financial Intermediaries and the
Committee on Appropriations and five (5) members to be appointed by the Speaker of the House of
Representatives.

Section 14: separability clause. If any provision or section of this act or the application thereof to any
person or circumstance is held invalid, then the other provisions or sections to other persons or
circumstances shall not be affected thereby.

Section 15: Repealing Clause: all acts or parts of acts and executive orders administrative or orders, or
part thereof, which are inconsistent with the provisions of this Act are hereby repealed.

Section 16: Effectivity Clause. This act shall take effect 15 days following the completion of its
publication in the Official Gazette of general circulation.