17/06/2016

FGDR – IADI ERC INTERNATIONAL CONFERENCE

DIVERSITY AND HARMONIZATION OF DEPOSIT INSURANCE 26 May 2016 ▪ Paris,

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.

2

1 17/06/2016

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 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

2 17/06/2016

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

6

3 17/06/2016

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

7

CRISIS MANAGEMENT

Before After

• Implement • Assess • Anticipate • Adapt • Adjust • Simulate

4 17/06/2016

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

5 17/06/2016

Worst natural disasters in the Philippines in terms of casualties

Disaster Date Casualties

Typhoon Haiyan(Yolanda) 8-Nov-2013 6,193

1976 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 (Nitang) 1-Sep-1984 1,422 Mt. Pinatubo in the Philippines, National Disaster Risk Reduction and Management Council (NDRRMC), National Aeronautics and Space Typhoon (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 hit Pay out operations and arrived commenced the province. resumed. the same day in Malinao, . Payout operations suspended.

6 17/06/2016

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

7 17/06/2016

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

8 17/06/2016

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

9 17/06/2016

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

10 17/06/2016

PDIC’s Quality Policy

“Quality is our standard. Public service is our commitment.”

11