philippine deposit insurance corporation law

Question 1: Under what specific conditions can the Maximum Deposit Insurance Coverage (MDIC) be adjusted due to a threat to the banking system's stability?

• A: It requires a determination by the Bangko Sentral ng Pilipinas/Monetary Board, a unanimous vote of the PDIC Board, and the President's approval.

• B: It requires a determination by the PDIC Board, a unanimous vote of the Monetary Board, and the Secretary of Finance's approval.

• C: It requires a determination by the Monetary Board, a majority vote of the PDIC Board, and the President's approval.

• D: It requires a determination by the BSP Governor, a unanimous vote of the PDIC Board, and the Senate's approval.

a

Question 2: How is a bank deposit legally classified and perfected under Philippine law?

• A: It is classified as a consensual contract of lease that is perfected upon the signing of the account documents.

• B: It is classified as a real contract of loan that is perfected once the money is physically delivered to the bank.

• C: It is classified as a real contract of trust that is perfected upon the issuance of the bank certificate.

• D: It is classified as a consensual contract of agency that is perfected when the bank formally accepts the funds.

b

Question 3: Are obligations payable at a Philippine bank's branch located outside the Philippines covered by PDIC insurance?

• A: They are always covered because the bank is legally incorporated under Philippine banking laws.

• B: They are never covered because the PDIC's jurisdiction is strictly limited to Philippine territory.

• C: They are covered only if the foreign branch pays a special insurance premium to the Bangko Sentral ng Pilipinas.

• D: They are covered only if the bank is incorporated in the Philippines, elects to include the foreign branch, and secures explicit approval from the PDIC Board.

d

Question 4: How does the PDIC apply the Maximum Deposit Insurance Coverage (MDIC) when a depositor has accounts in both a bank's main office and its provincial branch?

• A: Accounts in branches are insured separately from accounts in the main office up to P1,000,000 each.

• B: Accounts in branches and the main office are insured separately, but the combined total is capped at P500,000.

• C: Accounts in branches and the main office are added together and subject to a single P1,000,000 limit.

• D: Accounts in the main office are fully covered, while branch accounts receive exactly half the maximum coverage.

c

Question 5: How are joint accounts treated in relation to a depositor's individually owned accounts at the same bank?

• A: Joint accounts are insured separately from a depositor's individually owned accounts.

• B: Joint accounts are automatically added to a depositor's individually owned accounts before applying the limit.

• C: Joint accounts completely replace the insurance coverage of a depositor's individual accounts.

• D: Joint accounts are insured only if the depositor does not maintain any individually owned accounts.

a

Question 6: If a joint account is held between a natural person and a juridical entity (such as a corporation), how does the law attribute ownership for insurance purposes?

• A: The insurance coverage is automatically divided equally between the juridical entity and the natural person.

• B: The law presumes the deposited money belongs entirely to the juridical entity.

• C: The insurance coverage is granted exclusively to the natural person to protect individual funds.

• D: The account is classified as uninsured because mixing personal and corporate funds is strictly prohibited.

b

Question 7: What is the absolute cap for a single depositor's combined interest across multiple joint accounts within the same bank?

• A: A depositor receives up to P1,000,000 for every single joint account they co-own with different partners.

• B: A depositor's individual share across all joint accounts is capped at P500,000 to limit the PDIC's exposure.

• C: A depositor's total combined interest across multiple joint accounts at the same bank cannot exceed P1,000,000.

• D: A depositor is strictly limited to owning only one insured joint account per banking institution.

c

Question 8: In an agency account labeled "A by B" (where A is the principal and B is the agent), who is considered the true depositor for insurance purposes?

• A: The principal is the true depositor, and the funds are lumped together with the principal's individual accounts.

• B: The agent is considered the true owner, and the funds are added to the agent's personal accounts.

• C: The account is insured as a joint account because two different names appear on the deposit certificate.

• D: The account is treated as a specialized trust account and receives completely separate insurance coverage.

Question 9: How is a bank account registered under a sole proprietorship (e.g., a car repair shop) treated for deposit insurance?

• A: It is excluded from coverage because the PDIC does not protect commercial business accounts.

• B: It is insured as a distinct juridical entity with its own separate P1,000,000 maximum coverage limit.

• C: It is treated as a mixed joint account shared between the business trade name and the registered owner.

• D: It is combined with the owner's personal accounts because a sole proprietorship lacks a separate legal personality.

d

Question 10: What is the primary difference between time deposits and money placements in terms of PDIC coverage?

• A: Both are considered investment instruments and are strictly excluded from PDIC insurance coverage.

• B: Time deposits are fully insured deposit liabilities, while money placements are uninsured investments.

• C: Both are considered legitimate deposit liabilities and are fully insured up to the maximum limit.

• D: Money placements are fully insured deposit liabilities, while time deposits are uninsured investments.

b

Question 11: Under what specific conditions is a depositor automatically paid via Postal Money Order without needing to file a claim?

• A: Their balance is P1,000,000 or below, they have no outstanding obligations, and their complete mailing address is updated.

• B: Their balance is P500,000 and below, their account is actively maintained, and there is no record of unsafe banking.

• C: Their balance is P500,000 and below, they have no obligations to the closed bank, and their complete mailing address is updated.

• D: Their balance is P1,000,000 or below, their account is actively maintained, and there is no record of unsafe banking.

c

Question 12: What legal recourse does a depositor have if the PDIC denies their claim based on unsafe and unsound banking practices?

• A: The depositor must file a petition for review with the Supreme Court within 15 days of the denial.

• B: The depositor must file a petition for certiorari with the Regional Trial Court within 60 days of the denial.

• C: The depositor must file a petition for certiorari with the Court of Appeals within 30 days of the denial.

• D: The depositor must file an administrative appeal with the Bangko Sentral ng Pilipinas within 30 days of the denial.

c

Question 13: What is the prescriptive period for depositors to file their deposit insurance claims?

• A: Three years from the date the Bangko Sentral ng Pilipinas formally orders the bank's closure.

• B: Two years from the date the PDIC takes over the closed bank.

• C: Two years from the date the depositor receives the final notice of closure via postal mail.

• D: Three years from the date the PDIC formally issues the final statement of assets and liabilities.

b

Question 14: How does the PDIC handle valid foreign currency deposits upon the closure of a bank?

• A: They are fully covered, and the payout is strictly issued in the specific foreign currency that was originally deposited.

• B: They are not covered because foreign currency accounts fall under the strict absolute confidentiality rules.

• C: They are not covered because the PDIC Charter explicitly restricts deposit insurance to local Philippine currency.

• D: They are fully covered, but the payout is converted to Philippine Pesos using the BSP reference exchange rate on the date of bank closure.

d

Question 15: How does the PDIC process an insurance claim if a depositor has a P500,000 savings account but also owes a past-due personal loan of P200,000 to the same closed bank?

• A: The PDIC pays the full P500,000 deposit first before requiring the depositor to settle their unpaid loan.

• B: The depositor must fully settle the outstanding P200,000 loan in cash before the PDIC processes the claim.

• C: The outstanding loan is automatically forgiven, and the PDIC pays out the full P500,000 deposit balance.

• D: The PDIC offsets the loan by legal compensation and pays out only the net balance of P300,000.

d

Question 16: Why are fictitious or simulated accounts (ghost deposits) explicitly denied deposit insurance coverage?

• A: They are denied coverage because there is no actual money entrusted to create a valid debtor liability.

• B: They are denied coverage unless the named depositor agrees to pay the mandatory insurance premium in full.

• C: They are insured up to P500,000 as long as the failing bank issued a genuinely printed certificate of deposit.

• D: They are insured only if the named depositor can provide a valid government identification to prove their identity.

a

Question 17: True or False: "In Trust For" (ITF) accounts are treated as joint accounts because two names appear on the account records.

f

Question 18: True or False: When two natural persons hold a joint account, the maximum insurance coverage is automatically split into equal shares unless the bank records specify a different sharing ratio.

t

Question 19: True or False: Islamic banking products are excluded from PDIC coverage because they operate outside the traditional commercial banking framework.

f

Question 20: True or False: Investment products such as bonds, securities, and equity funds are excluded from PDIC coverage because they lack a debtor-creditor relationship and their principal amount is not protected.

t