PDIC: Legacy has P129-M more insured deposits
abs-cbnNEWS.com | 03/11/2009 12:35 AM
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The Rural Bank of Polangui (RBP)—another failed bank said to be linked to the Legacy Group of Companies—has a total of P133 million in deposit liabilities, the Philippine Deposit Insurance Corp. (PDIC) said Tuesday.
Of this amount, PDIC President Jose Nograles said P129 million or 97 percent is covered by the deposit insurance, out of a total of about 1,610 accounts.
“We have not started with examination of deposits because our examiners are all working with the Legacy banks,” Nograles said.
RBP declared a bank holiday late last month to the surprise of its depositors. The bank is located in Albay, the same province where Legacy owner Celso de los Angeles is mayor.
Nograles said RBP claims would be included in the PDIC’s planned second outsourcing of external auditing services, which is set to start in the last week of March.
The PDIC said it would end up spending some P14 billion to pay the deposit insurance claims with accounts of P250,000 and below. The amount would be well-covered by the PDIC’s deposit insurance fund currently estimated at P61 billion.
However, Nograles said the PDIC would be prioritizing depositors with accounts of less than P100,000, adding that some 35,000 accounts were already examined. He said the payout of clean and validated claims is set to start this week.
The PDIC said there are over 130,000 accounts involved in 12 of Legacy Group’s banks, with 62 percent of them having P100,000 and below.
For his part, central bank governor Nestor Espenilla said the business model of the Legacy banks involved creditors being told to break their deposits into portions of P250,000, the maximum amount covered by the PDIC’s deposit insurance.
“The scheme was really designed to fail and when it failed, it was designed to pay off. It is a very specific group with a very specific business model,” Espenilla said.
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