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FGDR – IADI ERC INTERNATIONAL CONFERENCE

DIVERSITY AND HARMONIZATION OF

DEPOSIT INSURANCE

26 May 2016 ▪ Paris, France

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T h e f i n d i n g s , i n t e r p r e t a t i o n s , a n d c o n c l u s i o n s e x p r e s s e d i n T h e f i n d i n g s , i n t e r p r e t a t i o n s , a n d c o n c l u s i o n s e x p r e s s e d i n T h e f i n d i n g s , i n t e r p r e t a t i o n s , a n d c o n c l u s i o n s e x p r e s s e d i n T h e f i n d i n g s , i n t e r p r e t a t i o n s , a n d c o n c l u s i o n s e x p r e s s e d i n

t h i s p r e s e n t a t i o n a r e e n t i r e l y t h o s e o f t h e s p e a k e r. t h i s p r e s e n t a t i o n a r e e n t i r e l y t h o s e o f t h e s p e a k e r. t h i s p r e s e n t a t i o n a r e e n t i r e l y t h o s e o f t h e s p e a k e r. t h i s p r e s e n t a t i o n a r e e n t i r e l y t h o s e o f t h e s p e a k e r.

T h e y d o n o t r e p r e s e n t t h e v i e w s o f t h e i n s t i t u t i o n s , t h e i r T h e y d o n o t r e p r e s e n t t h e v i e w s o f t h e i n s t i t u t i o n s , t h e i r T h e y d o n o t r e p r e s e n t t h e v i e w s o f t h e i n s t i t u t i o n s , t h e i r T h e y d o n o t r e p r e s e n t t h e v i e w s o f t h e i n s t i t u t i o n s , t h e i r

a f f i l i a t e d o r g a n i z a t i o n s o r g o v e r n m e n t s t h e y r e p r e s e n t .a f f i l i a t e d o r g a n i z a t i o n s o r g o v e r n m e n t s t h e y r e p r e s e n t .a f f i l i a t e d o r g a n i z a t i o n s o r g o v e r n m e n t s t h e y r e p r e s e n t .a f f i l i a t e d o r g a n i z a t i o n s o r g o v e r n m e n t s t h e y r e p r e s e n t .

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Dealing with Crisis:The Philippine Experience

CRISTINA QUE ORBETA

President, Philippine Deposit Insurance Corp

MRS CRISTINA QUE ORBETAPRESIDENT

2014 – Present President

Philippine Deposit Insurance Corporation

2005 – 2014 Executive Vice President

Philippine Deposit Insurance Corporation

Miscellaneous :

Member, IADI Executive Council

Chairperson, IADI Audit Committee

Chairperson, APEC-Financial Regulatory Training Initiatives (APEC-FRTI) Advisory Group for

Bank Supervision

Philippines Deposit

Insurance

Corporation

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The Philippines

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Philippine Banking System

YEARNo. of Closed

Banks

2011 29

2012 24

2013 18

2014 15

2015 14

TOTAL 100

Closed BanksOperating Banks (as of December 2015)

Bank Type Number of

Banks

Number of

Banking Units (including Head Office)

Commercial Banks 40 5,873

Thrift Banks 69 2,107

Rural Banks 524 2,594

TOTAL 633 10,574

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• 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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PDIC (1963 – 2015)

CRISIS MANAGEMENT

Before

• Anticipate

• Simulate

• Implement

• Adapt

After

• Assess

• Adjust

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During

• Implement

• Adapt

After

• Assess

• Adjust

Planning Adequately

• Bank Inventory and Accounting

• Continuing Staff Training

Technical Preparations

• Adequate cash, provisions, medicines, clothes, etc.

Logistical Preparations

• Dedicated and experienced PDIC Staff deployed

Focused and Seasoned Staff

CRISIS MANAGEMENT

Before

• Anticipate

• Simulate

• Implement

• Adapt

After

• Assess

• Adjust

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Sources: Asian Disaster Reduction Center

Country Report 2012, Center for Research on Epidemiology of Disasters, Annual Disaster

Statistical Review 2012, Encyclopedia of

Earthquakes and Volcanoes, Encyclopedia of

Hurricanes, Typhoons, and Cyclones, Eruption of

Mt. Pinatubo in the Philippines, National Disaster Risk Reduction and Management Council

(NDRRMC), National Aeronautics and Space

Administration (NASA), Philippine Institute of

Volcanology and Seismology (PHIVOLCS)

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

Typhoon Washi (Sendong) 15-Dec-2011 1,439

Typhoon Ike (Nitang) 1-Sep-1984 1,422

Typhoon Durian (Reming) 30-Nov-2006 1,399

Deposit Insurance Payout operations amidst a storm (2006)

November 28

PDIC Team left

Manila and arrived

the same day in

Malinao, Albay.

November 29

Pay out operations

commenced

November 30

Typhoon Durian hit

the province.

Payout operations

suspended.

December 1

Pay out operations

resumed.

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Aftermath of the typhoon:

Inside the bank

Wall-type airconditioning units dislodged by the typhoon

CRISIS MANAGEMENT

Before

• Anticipate

• Simulate

• Implement

• Adapt

After

• Assess

• Adjust

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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

November 10 (Monday)

• 5-man team flew out

of Manila and landed at Calbayog airport

72.5 km

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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

Communications outage

Travel to nearby towns where cell phone

signals have been restored

Purchase Satellite phone

Little food and potable waterBring enough provisions from Manila

(food, water, medicines, etc.)

ATMs were off-line, no cash on handBring cash, increase emergency drawing fund

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

• Anticipate

• Simulate

• Implement

• Adapt

After

• Assess

• Adjust

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PDIC’s Quality Policy

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