PDIC pays P11-B in 'Legacy' claims
Manila (12 November) -- The Philippine Deposit Insurance Corporation (PDIC) announced that as of October 31, 2010, it had paid a total of P11 billion in deposit insurance to depositors of the 12 closed banks collectively known as the Legacy Banks.This represents 77.6 % of the total amount of claims filed which registered at P14.2 billion.
Meanwhile, claims aggregating P788 million or 5.5% of the amount of filed claims were denied. More than half of the denied claims were for non-existent accounts. The remainder were from accounts emanating from fraudulent transactions.
Claims that had not been paid were for those that were document deficient or put on hold for investigation or legal issues.
The payment for document deficient claims will depend on depositor's compliance with the requirements for these claims.
Letters have been sent to depositors/claimants concerned. For claims subject of further investigation, these may either be paid, or denied, depending on the outcome of the investigation.
Claims processing was conducted with assistance from the Bangko Sentral ng Pilipinas-accredited audit firms Constantino Guadalquiver and Company, and Acyatan and Company.
This involved combing through about 2,000 boxes of bank records in disarray and painstakingly piecing together available documents to ensure that only valid claims are paid.
The Legacy banks were closed almost simultaneously and placed under PDIC receivership in December 2008. The said banks and other affiliated companies belonging to the Legacy Group were subject of congressional inquiry in 2009 due to indications of widespread fraud.
PDIC was cautioned by lawmakers to exercise diligence and prudence in paying Legacy claims.
PDIC President Jose C. Nograles said that the Corporation prudently and diligently processed claims as required by law. He said that the high percentage of paid claims is consistent with the findings of forensic experts from Punongbayan and Araullo, an affiliate of international audit firm, Grant and Thornton that in general, funds did flow into the banks as deposits.
Although some fraudulent transactions were uncovered, a large portion of the accounts were found to be valid and hence were eligible for deposit insurance. This included accounts initially tagged as "doubtful", and subsequently validated as a result of judicious search for documents that were either missing or disarray.
Nograles however added that based on the P & A findings and PDIC investigations, 26 cases have been filed so far against owners and officers of the Legacy banks. As stated in PDIC's complaints, the fraud was committed not so much in deposit-taking activities, but in the siphoning of funds generated from the public. (PIA) [top]