Amending Republic Act Numbered Three Thousand Five Hundred Ninety-One, As Amended, Entitled "An Act Establishing The Philippine Deposit Insurance Corporation, Defining Its Powers And Duties

Case Overview and Summary

Summary of Presidential Decree No. 120

Board of Directors of the Philippine Deposit Insurance Corporation (PDIC):
- Consists of 3 members: Governor of Central Bank of the Philippines, and 2 appointees by the President (Section 1)
- One appointee serves as full-time Chairman for 6 years with compensation set by the President (Section 1)
- Other appointee serves for 4 years, both appointees receive per diem up to P500 per month (Section 1)
- Vacancies are filled by new appointments to complete the unexpired term (Section 1)
- Board has authority to issue rules and regulations, direct management, appoint and remove officers (except those under Civil Service), and authorize expenditures (Section 1)

Permanent Insurance Fund:
- Increased to P20 million, with P15 million appropriated from the General Fund (Section 2)

Assistance to Insured Banks:
- PDIC can make loans, purchase assets, or make deposits in insured banks in danger of closing to prevent closure (Section 3)
- Funds for this purpose are limited to the Permanent Insurance Fund, additional appropriations, and borrowings from Central Bank (Section 3)
- Funds from assessments paid by insured banks cannot be used for this purpose or to repay Central Bank loans (Section 3)
- Loans and deposits may be subordinated to rights of depositors and other creditors (Section 3)

Operating Expenses:
- Within 1 year of the P15 million appropriation, annual operating expenses shall not exceed annual gross income from investing the Permanent Insurance Fund, plus 15% of first P10 million of other income (assessments, investments), plus 10% of excess over P10 million (Section 1)
- Recoveries and accrued income are excluded from income computation (Section 1)