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FGDR – IADI ERC INTERNATIONAL CONFERENCE
DIVERSITY AND HARMONIZATION OF DEPOSIT INSURANCE 26 May 2016 ▪ Paris, France
The findings, interpretations, and conclusions expr essed in this presentation are entirely those of the speaker.
They do not represent the views of the institutions , their affiliated organizations or governments they repres ent.
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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
2005 – 2014 Executive Vice President Philippines Deposit Insurance Philippine Deposit Insurance Corporation 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 No. of Closed (as of December 2015) YEAR Number of Banks Bank Type Number of Banking Units Banks (including Head Office) 2011 29 Commercial Banks 40 5,873 2012 24 Thrift Banks 69 2,107 2013 18 Rural Banks 524 2,594 2014 15 TOTAL 633 10,574 2015 14 TOTAL 100
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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 After
• Implement • Assess • Anticipate • Adapt • Adjust • Simulate
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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 Focused and Seasoned• Adapt Staff • Adjust
• Dedicated and experienced PDIC Staff deployed
CRISIS MANAGEMENT
Before After
• Implement • Assess • Anticipate • Adapt • Adjust • Simulate
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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 Sources: Asian Disaster Reduction Center Country Report 2012, Center for Research on Epidemiology of Disasters, Annual Disaster Typhoon Washi (Sendong) 15-Dec-2011 1,439 Statistical Review 2012, Encyclopedia of Earthquakes and Volcanoes, Encyclopedia of Hurricanes, Typhoons, and Cyclones, Eruption of Typhoon Ike (Nitang) 1-Sep-1984 1,422 Mt. Pinatubo in the Philippines, National Disaster Risk Reduction and Management Council (NDRRMC), National Aeronautics and Space Typhoon Durian (Reming) 30-Nov-2006 1,399 Administration (NASA), Philippine Institute of Volcanology and Seismology (PHIVOLCS)
Deposit Insurance Payout operations amidst a storm (2006)
November 28 November 29 November 30 December 1
PDIC Team left Pay out operations Typhoon Durian hit Pay out operations Manila and arrived commenced the province. resumed. the same day in Malinao, Albay. 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 After
• Implement • Assess • Anticipate • Adapt • Adjust • Simulate
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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
Travel to nearby towns where cell phone signals have been restored Communications outage Purchase Satellite phone
Bring enough provisions from Manila Little food and potable water (food, water, medicines, etc.)
Bring cash, increase emergency drawing fund ATMs were off-line, no cash on hand 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 After
• Implement • Assess • Anticipate • Adapt • Adjust • Simulate
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PDIC’s Quality Policy
“Quality is our standard. Public service is our commitment.”
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