ASSESSMENT OF

MEMBER BANKS
(Renumbered from Sec. 6 by R.A. No. 10846, 11 June 2016)
Assessment Rate and Base
Rate:
Established by the Board of Directors and is subject to a statutory limit, ensuring it
does not exceed one-fifth (1/5) of one percent (1%) per annum.

Semi-annual assessment for each insured bank shall be in the amount of the
product of one-half (1/2) the assessment rate multiplied by the assessment base
but in no case shall it be less than Five Thousand Pesos (P5,000.00)

Base:
Refers to the total amount of a bank's liability for deposits without any deductions
for the indebtedness of depositors.

Represents the full value of deposits held by the bank and serves as the foundation
for calculating the semi-annual assessment.
Risk-Based Assessment
This method adjusts the assessment rates for banks based on their
creditworthiness or risk profile. The Board of Directors will study this system within
five years and report the results to the Joint Congressional Oversight Committee.

Banks with lower risk will pay a lower rate, while higher-risk banks will pay more.
This ensures that the Deposit Insurance Fund (DIF) is adequately supported and
aligns the financial burden with the bank's risk.

This method also allows the PDIC to adjust rates in response to changes in deposit
insurance coverage and economic conditions, with an emphasis on transparency in
the process
 Semi-Annual Based Assessment
First Semi-Annual Period: Second Semi-Annual Period:
This period covers the first six months of This period covers the second half of the
the year, from January 1 to June 30. year, from July 1 to December 31.

The assessment base is the average of The assessment base for this period is
the bank’s assessment base at the close determined by taking the average of the
of business on March 31 and June 30 is bank’s assessment base at the close of
calculated. business on September 30 and December
31.

NOTE: If any date falls on a nonbusiness day or holiday, the preceding business day's
assessment base is used. Banks must submit certified statements and make payments as
scheduled and prescribed by the Board of Directo
Reporting and Payment Requirement
Insured banks must file certified statements with the Corporation by July 31 for the
period ending June 30, and by January 31 for the period ending December 31.

Newly insured banks are exempt from filing and paying assessments for the first
semi-annual period. After that, they must file a certified statement based on the
assessment base as of the previous June 30 or December 31, and pay an
assessment calculated as half of the annual rate applied to the base.
Allocation to Deposit Insurance Fund
The Deposit Insurance Fund (DIF) is funded by assessment collections and income
after deducting expenses, which include operating costs, reserves for insurance
losses, and net losses.
Key Questions and Responses
What happens if an insured bank overpays its assessment, and how can the
Corporation handle overpayments and refunds?

• The Corporation may refund any overpayment of assessment made by an insured

bank, or it may apply the excess payment as a credit toward the bank's future
assessment payments.

What legal actions can the Corporation take if an insured bank fails to file
the required certified statement for determining the assessment amount,
and what are the consequences for non-compliance?

• If an insured bank fails to file the required certified statement, the Corporation can
compel it to do so through legal action. The Corporation can recover unpaid
assessments, even if the bank didn't file the statement. However, any recovery
action must be made within five years, except if the bank filed a fraudulent
statement, in which case the period starts when the fraud is discovered.
Sanctions and Penalties
If an insured bank fails to pay the required assessment and does not correct this
within 30 days of receiving a written notice from the Corporation, the Corporation
may take legal action by filing a collection case in court.
Special Assessment
The Corporation has the authority to impose a special assessment on any member
bank if necessary, in order to maintain the target level of the Deposit Insurance
Fund (DIF) set by the Board of Directors.
LIQUIDATION OF A CLOSED
BANK
(As added by R.A No. 10846, 11 June 016)

When the Monetary Board orders a bank to be closed, the Corporation (usually
PDIC) is appointed as the receiver to take over and handle the bank's liquidation.
The bank will no longer be rehabilitated or reopened, and the receiver will manage
the process of settling debts, selling assets, and distributing remaining funds to
creditors.
 AUTHORITIES OF THE RECEIVER
AND EFFECTS OF PLACEMENT OF A
BANK UNDER LIQUIDATION
(As added by R.A No. 10846, 11 June 016)
Authorities of Receiver
Modes of Liquidation
• Conventional Liquidation - the receiver works to convert the bank’s assets into
cash and uses that cash to settle the bank's outstanding debts.
• Purchase of Assets and/or Assumption of Liabilities - the receiver can choose to
sell the bank’s assets and transfer its liabilities to another entity.
Authorities of Receiver
Powers of the Receiver
1. Representation of the Closed Bank
2. Control of Assets, Records, and Affairs
3. Conversion of Assets to Liquid Form
4. Legal Actions to Enforce Liabilities
5. Hiring Competent Personnel
6. Hiring Forensic and Fraud Experts
7. Paying Bank’s Outstanding Bills
8. Loan Collection and Restructuring
9. Hiring Legal Counsel
10. Borrowing or Encumbering Assets
11. Adjusting Interest Rates
12. Utilizing Funds for Liquidation Costs
13. Charging Liquidation Fees
14. Distributing Assets to Creditors
15. Disposing of Records
 Authorities of Receiver
Liquidation Court Procedures
Distribution of Surplus to Creditors and Claimants
All liabilities and claims of the closed bank must be settled first, including debts to
creditors, depositors, and claimants. Once liabilities are paid, any remaining funds (surplus)
will be distributed as dividends to creditors and claimants at the legal rate of interest,
calculated from the takeover date to the distribution date. The distribution follows the Rules
on Concurrence and Preference of Credits, ensuring higher-priority claims are paid first. Any
remaining surplus after all claims are settled will be distributed to the bank's shareholders.

Protections for Receiver's Personnel

The officers, employees, deputies, assistants, and agents of the receiver are protected from
liability in the course of their duties during the liquidation process. They cannot be held
accountable or subject to any legal action, claim, or demand for acts performed in good
faith while exercising their powers and functions under the law. This protection also applies
to actions that have been approved by the court, ensuring that they are not personally
liable for their official duties related to the liquidation.
Effects of Placement Under Liquidation
Corporate Existence - when a bank is placed under liquidation, it remains a legal entity only to
complete the liquidation process, settle debts, and dispose of assets. It cannot resume banking
operations, and the receiver manages its affairs until the process is finished.

Governance Termination - when a bank is closed, the powers and privileges of its directors,
officers, and stockholders are terminated. They are probihited from interfering with the bank’s
operations. Instead, receiver takes full control of the liquidation process to benefit the creditors.

Assets Management - once a bank is closed, its assets are under the receiver's custody and
protected from legal actions like attachment or garnishment. Collateral securing BSP loans is
excluded from asset distribution, and excess proceeds are returned to the receiver. Existing
attachments or garnishments are lifted upon the receiver’s request.
Labor Relations - when a bank is closed, the employer-employee relationship ends, and
employees are entitled to separation pay and benefits. These payments are made from the bank’s
available assets, following the applicable rules on the preference of creditors.

Contractual Obligations - the receiver can cancel or terminate any contract of the closed bank
that is unnecessary for liquidation, harmful to the bank, or legally grounds for termination,
ensuring an orderly liquidation process.
Effects of Placement Under Liquidation
Interest Payments - when a bank is closed, its obligation to pay interest stops. The receiver can
assign the bank's collateral assets to secure creditors to cover outstanding loans and accrued
interest up to the closure date, based on current market value appraised independently, without
court approval.

Tax Liabilities -upon closure, a bank is exempt from penalties or surcharges for late or unpaid
taxes, including real property, capital gains, and transfer taxes.

Bank Fees - after a bank's closure, the receiver may charge fees for services such as executing
deeds and certifications during liquidation.

Pending Cases - legal cases involving the closed bank, except those in the Supreme Court, are
suspended for up to 180 days for mediation. If unresolved, they return to court for continuation

Enforcement of Court Decisions - execution of final court rulings against a closed bank is
paused. The decision must be filed as a claim with the liquidation court for resolution under credit
preference laws.

Court Fees - payment of court fees by the receiver is delayed until case resolution. These fees
become a first lien on favorable judgments or are paid as liquidation costs if unfavorable.
Effects of Placement Under Liquidation
Asset Ownership - at closure, a bank is presumed to own all its assets, records, and documents
until they are managed or liquidated.

Presumption of Regularity - the receiver's actions under the Act are presumed valid and proper
unless proven otherwise.

Privacy of Assets and Documents - assets and records of a closed bank remain private even
under the receiver's management, with oversight limited to the Commission on Audit.
Thank You!