Republic of the Philippines such other obligations of a bank, which, consistent with

Congress of the Philippines banking usage and practices, the Board of Directors shall
Metro Manila determine and prescribe by regulations to be deposit
Fourteenth Congress liabilities of the bank: Provided, That any obligation of a
Second Regular Session bank which is payable at the office of the bank located
Begun and held in Metro Manila, on Monday, the twenty-eighth day outside of the Philippines shall not be a deposit for any of
of July, two thousand eight. the purposes of this Act or included as part of the total
Republic Act No. 9576 April 29, 2009 deposits or of insured deposits: Provided, further, That,
AN ACT INCREASING THE MAXIMUM DEPOSIT INSURANCE subject to the approval of the Board of Directors, any
COVERAGE, AND IN CONNECTION THEREWITH, TO insured bank which is incorporated under the laws of the
STRENGTHEN THE REGULATORY AND ADMINISTRATIVE Philippines which maintains a branch outside the
AUTHORITY, AND FINANCIAL CAPABILITY OF THE PHILIPPINE Philippines may elect to include for insurance its deposit
DEPOSIT INSURANCE CORPORATION (PDIC), AMENDING FOR obligations payable only at such branch.
THIS PURPOSE REPUBLIC ACT NUMBERED THREE The corporation shall not pay deposit insurance for the
THOUSAND FIVE HUNDRED NINETY-ONE, AS AMENDED, following accounts or transactions, whether denominated,
OTHERWISE KNOWN AS THE PDIC CHARTER, AND FOR documented, recorded or booked as deposit by the bank:
OTHER PURPOSES "(1) Investment products such as bonds and
Be it enacted by the Senate and House of Representatives of the securities, trust accounts, and other similar
Philippines in Congress assembled:: instruments;
Section 1. Statement of State Policy and Objectives. - It is hereby "(2) Deposit accounts or transactions which are
declared to be the policy of the State to strengthen the mandatory unfunded, or that are fictitious or fraudulent;
deposit insurance coverage system to generate, preserve, maintain "(3) Deposits accounts or transactions
faith and confidence in the country's banking system, and protect it constituting, and/or emanating from, unsage and
from illegal schemes and machinations. unsound banking practice/s, as determined by the
Towards this end, the government must extend all means and Corporation, in consultation with the BSP, after
mechanisms necessary for the Philippine Deposit Insurance due notice and hearing, and publication of a
Corporation to effectively fulfill its vital task of promoting and cease and desist order issued by the Corporation
safeguarding the interests of the depositing public by way of against such deposit accounts or transactions;
providing permanent and continuing insurance coverage on all and
insured deposits, and in helping develop a sound and stable banking "(4) Deposits that are determined to be the
system at all times. proceeds of an unlawful activity as defined under
Section 2. Section 4 (f) of Republic Act No. 3591, as amended, is republic act 9160, as amended.
hereby amended by adding an additional paragraph, to read as "The actions of the Corporation taken under this
follows: section shall be final and executory, and may not
"(f) The term "deposit" means the unpaid balance of money be restrained or set aside by the court, except on
or its equivalent received by a bank in the usual course of appropriate petition for certiorari on the ground
business and for which it has given or is obliged to give that the action was taken in excess of jurisdiction
credit to a commercial, checking, savings, time or thrift or with such grave abuse of discretion as to
account, or issued in accordance with Bangko Sentral rules amount to a lack or excess of jurisdiction. The
and regulations and other applicable laws, together with petition for certiorari may only be filed within thirty

RA 9576 | 1
 (30) days from notice of denial of claim for deposit as determined by the monetary board, the maximum
insurance." deposit insurance cover may be adjusted in such amount,
Section. 3. Section 4(g) of the same Act is hereby amended to read for such a period, and/or for such deposit products, as may
as follows: be determined by a unanimous vote of the Board of
"(g) The term "insured deposit" means the amount due to Directors in a meeting called for the purpose and chaired
any bona fide depositor for legitimate deposits in an by the Secretary of Finance, subject to the approval of the
insured bank net of any obligation of the depositor to the President of the Philippines."
insured bank as of date of closure, but not to exceed Five Section 4. The maximum deposit insurance coverage of Five
hundred thousand pesos (P500,000.00). Such net amount hundred thousand pesos (P500,000.00) provided in Section 4(g) of
shall be determined according to such regulations as the Republic Act 3591, as amended herein, shall be paid by the
Board of Directors may prescribe, In determining such Corporation: Provided, That for the first three (3) years from the
amount due to any depositor, there shall be added together effectivity of this Act, the first Two hundred fifty thousand pesos
all deposits in the bank maintained in the same right and (P250,000.00) of the deposited insurance coverage shall be for the
capacity for his benefits either in his own name or in the account of the Corporation, and those in excess of Two hundred fifty
name of others. A joint account regardless of whether the thousand pesos (P250,000.00) but not more than Five hundred
conjunction 'and,' 'or,' 'and/or' is used, shall be insured thousand pesos (P500,000.00) shall be for the account of the
separately from any individually-owned deposit account: National Government. The Congress shall annually appropriate the
Provided, That (1) If the account is held jointly by two or necessary funding to reimburse the Corporation for any payment to
more natural persons, or by two or more juridical persons insured depositors paid in excess of Two hundred fifty thousand
or entities, the maximum insured deposit shall be divided pesos (P250,000.00).
into as many equal shares as there are individuals, juridical Section 5. Section 8, paragraph Eighth of the same Act is hereby
persons or entities, unless a different sharing is stipulated amended to read as follows:
in the document of deposit, and (2) If the account is held by "Eighth - To conduct examination of banks with prior
a juridical person or entity jointly with one or more natural approval of the Monetary Board: Provided, That no
persons, the maximum insured deposits shall be presumed examination can be conducted within twelve (12) months
to belong entirely to such juridical person or from the last examination date: Provided, however, That
entity: Provided, further, That the aggregate of the interest the Corporation may, in coordination with the Bangko
of each co-owner over several joint accounts, whether Sentral, conduct a special examination as the Board of
owned by the same or different combinations of individuals, Directors, by an affirmative vote of a majority of all of its
juridical persons or entities, shall likewise be subject to the members, if there is a threatened or impending closure of a
maximum insured deposit of Five hundred thousand pesos bank: Provided, further, That notwithstanding the
(P500,000.00): Provided, Furthermore, The the provisions provisions of Republic Act No. 1405, as amended,
of any law to the contrary notwithstanding, no owner/holder Republic Act No. 6426, as amended, Republic Act No.
of any negotiable certificate of deposit shall be recognized 8791, and other laws, the Corporation and/or Bangko
as a depositor entitled to the rights provided in this Act Sentral may inquire into or examine deposit accounts and
unless his name is registered as owner/holder thereof in all information related thereto in case there is a finding of
the books of the issuing bank: Provided, Finally, That, in unsafe or unsound banking practice: Provided, finally, That
case of a condition that threatens the monetary and to avoid overlapping of efforts, the examination shall
financial stability of the banking system that may have maximize the efficient use of the relevant reports,
systemic consequences, as defined in section 17 hereof,

RA 9576 | 2
 information, and findings of the Bangko Sentral, which it the Board of Directors shall determine the interest rates,
shall make available to the Corporation." maturity and other requirements of said
Section 6. A new Section 9 (h) of the same Act is hereby added to obligations: Provided, further, That the Corporation shall
read as follows: provide for appropriate reserves for the redemption or
"(h) Unless the actions of the Corporation or any of its retirement of said obligation.
officers and employees are found to be in willful violation of All notes, debentures, bonds, or such obligations issued by
this Act, performed in bad faith, with malice and/or gross the Corporation shall be exempt from taxation both as to
negligence, the Corporation, its directors, officers, principal and interest, and shall be fully guaranteed by the
employees and agents are held free and harmless to the Government of the Republic of the Philippines. Such
fullest extent permitted by law from any liability, and they guarantee, which in no case shall exceed two times the
shall be indemnified for any and all liabilities, losses, Deposit Insurance Fund as of date of the debt issuance,
claims, demands, damages, deficiencies, costs and shall be expressed on the face thereof.
expenses of whatsoever kind and nature that may arise in The Board of Directors shall have the power to prescribe
connection with the performance of their functions, without rules and regulations for the issuance, reissuance,
prejudice to any criminal liability under existing laws." servicing, placement and redemption of the bonds herein
Section 7. Section 9 (h) of the same Act is accordingly renumbered authorized to be issued as well as the registration of such
as Section 9 (i). bonds at the request of the holders thereof."
Section 8. An additional paragraph to Section 17 of the same Act is Section 11. Section 21, paragraph (f)(5) is hereby amended to read
hereby added after subparagraph (b) to read as follows: as follows.
"(c) It is hereby declared to be the policy of the State that "5) splitting of deposits or creation of fictitious loans or
the Deposit Insurance Fund of the Corporation shall be deposits accounts.
preserved and maintained at all times. Accordingly, all tax "Splitting of deposits occurs whenever a deposit account
obligations of the Corporation for a period of five (5) years with an outstanding balance of more that the statutory
reckoned from the date of effectivity of this Act shall be maximum amount of insured deposit maintained under the
chargeable to the Tax Expenditure Fund (TEF) in the name of natural or juridical persons is broken down and
annual General Appropriation Act pursuant to the transferred into two (2) or more accounts in the name/s of
provisions of Executive Order No. 93, series of natural or juridical persons or entities who have no
1986: Provided, That, on the 6th year and thereafter, the beneficial ownership on transferred deposits in their names
Corporation shall be exempt from income tax, final within one hundred twenty (120) days immediately
withholding tax, value-added tax on assessments collected preceding or during a bank-declared bank holiday, or
from member banks and local taxes." immediately preceding a closure order issued by the
Section 9. Section 17 (c) of the same Act shall be accordingly Monetary Board of the Bangko Sentral ng Pilipinas for the
renumbered as Section 17 (d). purpose of availing of the maximum deposit insurance
Section 10. Section 19 is hereby amended to read as follows. coverage."
"SEC. 19. With the approval of the President of the Section 12. An additional paragraph shall be inserted under Section
Philippines, the Corporation is authorized to issue bonds, 2, to read as follows:
debentures, and other obligations, both local or foreign, as "SEC. 2. xxx The Board of Directors shall have the
may be necessary for purposes of providing liquidity for authority:
settlement of insured deposits in closed banks as well as "xxx
for financial assistance as provided herein: Provided, That

RA 9576 | 3
 "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. - There is
hereby created a joint congressional oversight committee to oversee
the implementation of this Act. The committee 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 circumstances is held
invalid, the other provisions or sections of this Act, in the application
of such provision or section to other persons or circumstances, shall
not be affected thereby.
Section 15. Repealing Clause. - All acts or parts of acts and
executive orders, administrative orders, or parts thereof, which are
inconsistent with the provisions of this Act are hereby repealed.
Section 16. Effectivity Clause. - This Act shall take effect fifteen
(15) days following the completion of its publication in the Official
Gazette or in two (2) newspapers of general circulation.
Approved,
(Sgd.) PROSPERO C. (Sgd.) JUAN PONCE ENRILE
NOGRALES President of the Senate
Speaker of the House of
Representatives
This Act which is a consolidation of Senate Bill No. 2964 and House
Bill No. 5911 was finally passed by the Senate and the House of
Representatives on March 5, 2009 and March 4, 2009, respectively.
(Sgd.) MARILYN B. BARUA-YAP (Sgd.) EMMA LIRIO-REYES
Secretary General Secretary of Senate
House of Represenatives
Approved: April 29, 2009
(Sgd.) GLORIA MACAPAGAL-ARROYO
President of the Philippines

RA 9576 | 4