Legarda urges return of PDIC funds, warns depositor risk

Senator Loren Legarda raised serious concerns over the remittance of P107.23 billion in funds of the Philippine Deposit Insurance Corporation (PDIC) to the National Treasury, cautioning that funds held in trust to protect depositors must not be treated as ordinary government revenues.

Legarda pointed out that the remittance was made under a special provision in the 2024 General Appropriations Act that has since been declared unconstitutional by the Supreme Court, making clear that the transfer of deposit insurance reserves was fundamentally flawed and raises serious moral and policy concerns about the State’s treatment of funds held in trust for depositors. She emphasized that the amount was taken from PDIC’s Deposit Insurance Fund, which is built from bank premiums and intended solely to insure deposits and respond to bank failures, not to finance general government spending.

“PDIC funds exist to insure deposits and protect ordinary Filipinos when banks fail. They are not surplus funds and should not be treated as general revenues, but reserves meant to ensure that depositors do not lose their savings,” Legarda said.

She warned that diverting PDIC reserves to the National Treasury, even for development purposes, risks undermining public confidence in the deposit insurance system itself, weakening the financial safety net relied upon by small depositors, retirees, OFWs, and micro-entrepreneurs.

Legarda drew lessons from the recent Supreme Court ruling on PhilHealth, in which the unconstitutional transfer of P60 billion in health insurance funds resulted in fewer resources available for healthcare services and eroded public trust in social protection institutions.

“Whether it is health insurance or deposit insurance, funds collected and reserved to protect people in times of crisis must be respected as a trust. When these safeguards are weakened, the cost is ultimately borne by ordinary Filipinos,” she said.

Legarda called on the government to stop treating social protection reserves as general-purpose funds and urged Congress to decisively review and correct policies that weaken trust funds essential to public confidence in the financial system.

“Our responsibility is not just to manage public finances, but to protect funds that people rely on in moments of crisis. These reserves exist to provide security when it is most needed, and they must be preserved for that purpose,” she added.