AMENDING REPUBLIC ACT NUMBERED THREE THOUSAND FIVE HUNDRED NINETY-ONE, AS AMENDED, ENTITLED "AN ACT ESTABLISHING THE PHILIPPINE DEPOSIT INSURANCE CORPORATION, DEFINING THE POWERS AND DUTIES AND FOR OTHER PURPOSES."

• Number: Presidential Decree No. 1897
• Sections: 5

Preamble

WHEREAS, it is the declared policy of the State to encourage

the accumulation of savings and deposits in banks in recognition of the immense

contribution of these funds mobilized by banks in the socio-economic development

of the country;

WHEREAS, the deposit insurance system was conceived to

generate more faith and confidence in the banking system by providing immediate

relief to bank depositors in the event of bank failures;

WHEREAS, under R.A. No. 3591 enacted in June 1963, the

Philippine Deposit Insurance Corporation was established to administer an

insurance system for bank deposits;

WHEREAS, under prevailing circumstances,

there is a felt need to increase the insurance coverage from its present amount

of P15.000 per depositor;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Republic of the Philippines, by virtue of the powers in me vested by the

Constitution, do hereby order and decree the further amendment of Republic Act

No. 3591, as amended, as follows:

Section 1

SECTION 1. Section three (g) of Republic Act Numbered Three

Thousand Five Hundred Ninety-One, as amended, is hereby amended to read as

follows:

"SEC. 3(g) The term 'insured deposit' means the net amount

due to any depositor for deposits in an insured bank (after deducting offsets)

less any part

thereof which is in excess of forty thousand pesos (P40.000).

Such net amount shall be determined according to such regulations as the Board

of Directors may prescribe and in determining such amount due to any depositor,

there shall be added together all deposits in the bank maintained in the same

capacity and the same right for his benefit either in his own name or in the

name of others.

Section 2

SECTION 2. Section six (i) of the same Act is hereby amended

to read as follows:

"Sec. 6(i) Trust funds held by an insured bank in a

fiduciary capacity whether held in trust or deposited in any other department or

in another bank shall be insured like other forms of deposits, in an amount not

to exceed P40,000 for each trust estate, and when deposited by the fiduciary

bank in another bank such trust funds shall be similarly insured to the

fiduciary bank according to the trust estates represented. Notwithstanding any

other provision of this Act, such insurance shall be separate from and

additional to that covering other deposits of the owners of such trust funds or

the beneficiaries of such trust estates: Provided, That where the fiduciary bank

deposits any of such trust funds in other insured banks, the amount so held by

other insured banks on deposit shall not for the purpose of any certified

statement required under subsections (b) and (c) of this section be considered

to be a deposit liability of the fiduciary bank, but shall be considered to be a

deposit liability of the bank in which such funds are so deposited by such

fiduciary bank. The Board of Directors shall have the power by regulation to

prescribe the manner of reporting and of depositing such trust

funds."

Section 3

SECTION 3. Section ten (a-1) of the same Act is hereby

amended to read as follows:

"Sec. 10(a-l) The permanent insurance fund hereinabove

created is hereby increased to twenty million pesos and for this purpose, the

amount of fifteen million pesos is hereby appropriated from the General Fund:

Provided, that the maximum amount of the insured deposit of any depositor is

hereby increased to forty thousand pesos (P40.000)."

Section 4

SECTION 4. This Decree shall take effect immediately.

Done in the City of Manila, this 11th day of January, in the year of our

Lord, nineteen hundred and eighty-four.