PDIC aims to release unpaid Legacy claims by Q1
MANILA, Philippines - The Philippine Deposit Insurance Corp. (PDIC) is aiming to release all unpaid insurance claims from the closed Legacy banks within the first quarter of 2010.
To date, about 80% of the 54,198 insurance claims from the 12 Legacy-related rural banks have been paid out, according to PDIC President Jose Nograles.
"As of today, 80% of the claims have been processed, and P5.2 billion has been released. We still have some 20% to work on, but we've contracted an external auditor already to help out. We hope to accomplish all these by the first quarter this year," Nograles said.
Nograles said the PDIC tried to finish processing all the claims, but was dragged down by the closure of some 31 small banks in 2009.
"The 31 bank closures added several hundred thousand accounts to the 250,000 accounts we're already processing for the Legacy closures," he noted.
Based on senate investigations and cases filed by regulators at the Department of Justice, the Legacy group enticed its clients with higher-yielding financial products and offered them non-cash incentives for deposits.
The group acquired public funds and moved them around through a web of companies engaged not just in rural banking, but also in pre-need, credit cards, motor vehicle sales, realty, among others.
The central bank said these were unsafe and unsound banking practices.