DIVERSITY AND HARMONIZATION OF DEPOSIT INSURANCE

17/06/2016
FGDR – IADI ERC INTERNATIONAL CONFERENCE
DIVERSITY AND HARMONIZATION OF
DEPOSIT INSURANCE
26 May 2016 ▪ Paris, France
The findings, interpretations, and conclusions expressed in
t h i s p r e s e n t a t i o n a r e e n t i r e l y t h o s e o f t h e s p e a k e r.
They do not represent the views of the institutions, their
affiliated o rganizations o r governments t hey represent.
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Dealing with Crisis:
The Philippine Experience
CRISTINA QUE ORBETA
President, Philippine Deposit Insurance Corp
MRS CRISTINA QUE ORBETA
PRESIDENT
2014 – Present President
Philippine Deposit Insurance Corporation
Philippines Deposit
Insurance
Corporation
2005 – 2014 Executive Vice President
Philippine Deposit Insurance Corporation
Miscellaneous :
Member, IADI Executive Council
Chairperson, IADI Audit Committee
Chairperson, APEC-Financial Regulatory Training Initiatives (APEC-FRTI) Advisory Group for
Bank Supervision
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The Philippines
Philippine Banking System
Closed Banks
Operating Banks
YEAR
No. of Closed
Banks
(including Head Office)
2011
29
5,873
2012
24
2013
18
2014
15
2015
14
TOTAL
100
(as of December 2015)
Bank Type
Commercial Banks
Number of
Banks
40
Number of
Banking Units
Thrift Banks
69
2,107
Rural Banks
524
2,594
TOTAL
633
10,574
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PDIC (1963 – 2015)
•
Receiver and liquidator of 647 closed banks
•
Paid insurance for 2.4 million deposit accounts
worth PHP64.5 Billion
•
Granted PHP119.87 Billion Financial Assistance
to 25 distressed banks
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CRISIS MANAGEMENT
Before
• Anticipate
• Simulate
After
• Implement
• Adapt
• Assess
• Adjust
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Planning Adequately
Technical Preparations
• Bank Inventory and Accounting
• Continuing Staff Training
Logistical Preparations
During
After
• Adequate cash, provisions, medicines, clothes, etc.
• Implement
• Assess
• Adapt Staff
• Adjust
Focused and Seasoned
• Dedicated and experienced PDIC Staff deployed
CRISIS MANAGEMENT
Before
• Anticipate
• Simulate
After
• Implement
• Adapt
• Assess
• Adjust
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Worst natural disasters in the Philippines
in terms of casualties
Disaster
Date
Casualties
Typhoon Haiyan (Yolanda)
8-Nov-2013
6,193
1976 Mindanao earthquake
17-Aug-1976
6,000
Typhoon Thelma (Thelma)
5-Nov-1991
5,956
1990 Luzon earthquake
16-Jul-1990
2,412
Typhoon Bopha (Pablo)
4-Dec-2012
1,901
Tropical Depression Winnie
29-Nov-2004
1,619
Typhoon Kate (Titang)
13-Oct-1970
1,551
Typhoon Washi (Sendong)
15-Dec-2011
1,439
Typhoon Ike (Nitang)
1-Sep-1984
1,422
30-Nov-2006
1,399
Typhoon Durian (Reming)
Sources: Asian Disaster Reduction Center
Country Report 2012, Center for Research on
Epidemiology of Disasters, Annual Disaster
Statistical Review 2012, Encyclopedia of
Earthquakes and Volcanoes, Encyclopedia of
Hurricanes, Typhoons, and Cyclones, Eruption of
Mt. Pinatubo in the Philippines, National Disaster
Risk Reduction and Management Council
(NDRRMC), National Aeronautics and Space
Administration (NASA), Philippine Institute of
Volcanology and Seismology (PHIVOLCS)
Deposit Insurance Payout operations
amidst a storm (2006)
November 28
PDIC Team left
Manila and arrived
the same day in
Malinao, Albay.
November 29
Pay out operations
commenced
November 30
Typhoon Durian hit
the province.
December 1
Pay out operations
resumed.
Payout operations
suspended.
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Aftermath of the typhoon:
Inside the bank
Wall-type airconditioning units dislodged by the typhoon
CRISIS MANAGEMENT
Before
• Anticipate
• Simulate
After
• Implement
• Adapt
• Assess
• Adjust
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Super typhoon before
Receivership operations (2013)
November 6 (Wednesday)
• Pre-takeover Session Planning
November 7 (Thursday)
• Rural Bank of Catubig placed
under receivership
November 8 (Friday)
• Supertyphoon Haiyan
(Yolanda) makes landfall
72.5 km
November 10 (Monday)
• 5-man team flew out
of Manila and landed
at Calbayog airport
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Timeline of Events: Rural Bank of Catubig
November 11 (Monday)
• Serving of Notice of Closure
November 14 (Thursday)
• Depositors – Borrowers Forum
November 19 (Tuesday)
• Start of Payout Operations
Challenges and Solutions
Challenges
Solutions
Limited transportation possibilities
Determine alternative routes
Power outage; No electricity
Procure generator and have stock of gasoline
Communications outage
Travel to nearby towns where cell phone
signals have been restored
Purchase Satellite phone
Little food and potable water
Bring enough provisions from Manila
(food, water, medicines, etc.)
ATMs were off-line, no cash on hand
Bring cash, increase emergency drawing fund
and takeover support fund
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Bank takeover crisis situations
Due to bank owners:
• Refusal to turnover the bank,
its records and assets
• Threat from armed
bodyguards/local police
Due to irate depositors
• Demand for immediate
withdrawal of all their money
CRISIS MANAGEMENT
Before
• Anticipate
• Simulate
After
• Implement
• Adapt
• Assess
• Adjust
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PDIC’s Quality Policy
“Quality is our standard.
Public service is our commitment.”
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