FIN 100: Philippine Deposit Insurance Corporation
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Questions and Answers

Which of the following types of deposits are NOT covered by PDIC insurance?

  • Savings account in a commercial bank
  • Investments in stocks
  • Foreign currency deposits
  • Fictitious deposit accounts (correct)

    • What must banks do in relation to PDIC membership?

  • Membership is mandatory for all operating banks (correct)
  • Membership is optional for commercial banks
  • Only rural banks must join PDIC
  • Membership requires annual fees

    • Which of the following is a valid reason for PDIC to deny deposit insurance?

  • Deposits made by a foreign national
  • Deposits under a certain amount
  • Deposits from an unsafe banking practice (correct)
  • Deposits in multiple currencies

    • Which statement about foreign currency deposits is correct?

    <p>They may be paid in the same currency as the deposit.</p> Signup and view all the answers

    What defines an unlawful activity under the Anti-Money Laundering Law with respect to PDIC insurance?

    <p>Proceeds from a criminal activity</p> Signup and view all the answers

    Which types of banking institutions are specifically mentioned as insured by PDIC?

    <p>All types of banks and authorized corporations</p> Signup and view all the answers

    For a bank with branches outside the Philippines, what must it do to insure deposits at those branches?

    <p>Obtain approval from the Board of Directors</p> Signup and view all the answers

    Which account type is backed by PDIC insurance?

    <p>Deposit products of banks</p> Signup and view all the answers

    What is one function of insurance applicable to every company?

    <p>To provide financial security against uncertain events</p> Signup and view all the answers

    Which of the following is a type of insurance offered in the Philippines?

    <p>All of the above</p> Signup and view all the answers

    What is a primary objective for investing?

    <p>To earn returns on idle resources</p> Signup and view all the answers

    Which of the following is considered a financial asset?

    <p>Fixed deposit</p> Signup and view all the answers

    Which step is NOT part of important steps to investing?

    <p>Ignore the costs associated with the investment</p> Signup and view all the answers

    Inflation primarily affects which aspect of investment?

    <p>The interest rates</p> Signup and view all the answers

    How often should one ideally invest, according to best practices?

    <p>Regularly for consistent growth</p> Signup and view all the answers

    What factor does NOT determine interest rates?

    <p>Capital gains tax</p> Signup and view all the answers

    What is the maximum imprisonment term for agency officials who fail to remit loan amortizations?

    <p>Five years</p> Signup and view all the answers

    What is the penalty interest rate per month for unremitted collections by an agency?

    <p>Two percent</p> Signup and view all the answers

    What will happen to a member's unpaid loans upon their retirement?

    <p>They will be deducted from their retirement claims</p> Signup and view all the answers

    For members with at least 15 years of service, what is the monthly pension benefit upon reaching age 60?

    <p>Equal to the BMP</p> Signup and view all the answers

    If contributions are made for a period of more than 1 year but less than 3 years, how long is the unemployment benefit duration?

    <p>2 months</p> Signup and view all the answers

    What is the penalty for agency officials convicted of failing to remit loan amortizations besides imprisonment?

    <p>A fine between P10,000 to P20,000</p> Signup and view all the answers

    What happens to the annual dividend privileges for members who have unpaid loans?

    <p>They are cancelled</p> Signup and view all the answers

    What is generally required to accompany remittances to GSIS?

    <p>Supporting lists in the prescribed form</p> Signup and view all the answers

    What is the minimum age for a child to qualify as a dependent under survivorship benefits?

    <p>18 years old</p> Signup and view all the answers

    Under what condition will the survivorship pension payment for a dependent spouse discontinue?

    <p>When the spouse remarries or engages in a common-law relationship</p> Signup and view all the answers

    Which of the following is NOT a requirement for secondary beneficiaries to receive benefits?

    <p>Engaged in a gainful occupation</p> Signup and view all the answers

    How is the basic survivorship pension calculated for a primary beneficiary?

    <p>50% of the Basic Monthly Pension (BMP)</p> Signup and view all the answers

    What is the cash payment equivalent provided for each dependent child under survivorship benefits?

    <p>10% of the BMP</p> Signup and view all the answers

    Which condition must a child meet to be considered a dependent under survivorship benefits regarding employment?

    <p>Must not be gainfully employed</p> Signup and view all the answers

    What is the maximum amount a primary beneficiary can receive in cash payments equivalent under survivorship benefits?

    <p>18 times the BMP</p> Signup and view all the answers

    To whom are cash payments equivalent to 18 months of the BMP distributed when there are no primary beneficiaries?

    <p>To secondary beneficiaries</p> Signup and view all the answers

    What is the maximum amount of deposit insurance provided by the PDIC?

    <p>P500,000</p> Signup and view all the answers

    Which type of bank closure is insured by the PDIC?

    <p>Closure ordered by the Monetary Board</p> Signup and view all the answers

    Who is responsible for paying the insurance premium to the PDIC?

    <p>Banks</p> Signup and view all the answers

    Which of the following accounts does not qualify for PDIC insurance?

    <p>Unfunded deposit accounts</p> Signup and view all the answers

    What action should a depositor take to verify deposit insurance coverage in foreign branches?

    <p>Inquire with the account officer of the branch</p> Signup and view all the answers

    What happens to a Philippine bank's deposits in foreign branches regarding PDIC insurance?

    <p>They may be insured if the bank elects to do so</p> Signup and view all the answers

    Which of the following is a requirement for determining insured amounts by PDIC?

    <p>Updating accounts to reflect taxation</p> Signup and view all the answers

    What type of activities does the PDIC not cover under its insurance policy?

    <p>Proceeds of unlawful activities</p> Signup and view all the answers

    Which of the following are eligibility requirements for sickness benefits?

    <p>Notified the employer</p> Signup and view all the answers

    What is a requirement for receiving the monthly pension disability benefit?

    <p>At least 36 monthly contributions paid</p> Signup and view all the answers

    What age must a member be to qualify for retirement benefits if unemployed?

    <p>60 years old</p> Signup and view all the answers

    Which of the following conditions qualifies for maternity disability?

    <p>Complete loss of sight in both eyes</p> Signup and view all the answers

    What is NOT a requirement for receiving death benefits?

    <p>Minimum age of deceased must be 60</p> Signup and view all the answers

    Which of the following is true regarding the lump sum amount for disabled members?

    <p>It is available for those with less than 36 contributions</p> Signup and view all the answers

    Who is mandatorily covered by the Government Service Insurance System (GSIS)?

    <p>Appointive officials under 65</p> Signup and view all the answers

    What is the minimum age for elective officials to be covered under GSIS upon election?

    <p>60 years old</p> Signup and view all the answers

    Study Notes

    Reporting Materials for FIN 100

    • The course covers materials related to Philippine Deposit Insurance Corporation (PDIC)

    Topic: Philippine Deposit Insurance Corporation (PDIC)

    • PDIC stabilizes the banking system by ensuring depositors' funds
    • PDIC was created in the Philippines due to bank runs, similar to the U.S. FDIC
    • The U.S. FDIC was established in 1933 to restore confidence in banks after a crisis
    • PDIC was established in the Philippines in 1963, under Republic Act 3591
    • PDIC's initial membership by banks was voluntary, unlike the U.S. system

    History of PDIC

    • Philippines experienced a banking crisis in the 1960s
    • The PDIC's initial insurance coverage was Php5 million per depositor
    • Subsequent government actions led to increases in deposit insurance, beginning with Php10,000 in 1963
    • The PDIC charter was amended in 2009, doubling the maximum deposit insurance coverage to PHP500,000
    • The latest amendments strengthened the PDIC and co-regulatory powers, including overseeing insured deposits
    • The PDIC now plays a crucial role in financial stability

    What is PDIC?

    • PDIC is a government instrumentality (created in 1963) responsible for protecting depositors' equity
    • PDIC is empowered to support public confidence in the economy
    • It executes complementary supervision of banks
    • It has the authority to help depositors access their insured deposits if a bank closes
    • It can hasten liquidation of closed banks, and penalize those who engage in unsound practices

    Functions of PDIC

    • Deposit Insurer
    • Co-regulator of Banks
    • Receiver and Liquidator of Closed Banks

    PDIC's Maximum Deposit Insurance Coverage

    • Effective June 1, 2009, the maximum deposit insurance coverage is P500,000 per depositor
    • All accounts by a single depositor are combined for insurance purposes

    Insured Deposits

    • The amount due to a depositor in an insured bank
    • Excludes certain accounts and transactions, including investment products and unfunded, fictitious or fraudulent accounts
    • Amounts do not exceed P500,000

    Bank Membership

    • Membership in PDIC is mandatory for all operating banks in the Philippines

    Types of Deposits Insured by PDIC

    • Commercial banks, savings and mortgage banks, rural banks, private development banks, cooperative banks, and their branches and offices in the Philippines
    • Foreign banks operating with a branch in the Philippines, are also covered

    Maximum Deposit Insurance Coverage Over Time

    • Detailed table of the maximum deposit insurance coverage in PHP (PHP millions) for each year covered. (Table not created)

    Frequently Asked Questions (FAQ)

    • Details of frequently asked questions and answers related to PDIC and its functions, mandates and coverage etc.
    • Important FAQ about PDIC, its role and mandated functions

    Topic: Non-banking Institutions/Insurance Companies

    • The objective is to classify insurance companies based on their function
    • Discussing non-bank functions and insurance company products and their services

    Life Insurance

    • A contract between an insurance company and a policyholder covering loss of life

    Non-Life Insurance

    • Covers damages other than death from losses e.g. property damage, liability arising from injuries or accidental death
    • Some types are property, marine and casualty insurance

    Topic: Investment Companies

    • The lecture discusses investment company functions and services

    Needs of Investment

    • Returning on idle funds
    • Future-oriented goals for the creation of money

    Inflation

    • A general increase in prices of goods and services within an economy

    Returns

    • Return above inflation to secure investment's value

    Topic: Investment Houses, Securities Dealers, and Brokers

    • The role of intermediaries in securities trading
    • A stock broker arranges securities buying and selling
    • Types of Brokers include Full-Service Brokers, Discount Brokers, and Advisory Brokers based on services offered (e.g., financial advice)

    Broker Regulation

    • SEBI regulations for broker admission, infrastructure, experience and fees

    Topic: Pawnshops

    • Discusses the functions and offerings of pawnshops and their regulation

    Topic: GSIS and SSS

    • Discusses the functions and products/services of these government owned insurance entities
    • Benefits provided and qualifying requirements for them

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    Reporting Materials For FIN 100 PDF

    Description

    This quiz explores the role and history of the Philippine Deposit Insurance Corporation (PDIC) in ensuring the stability of the banking system. It discusses PDIC's foundation, its voluntary membership for banks, and the evolution of deposit insurance coverage over the years. Test your knowledge on this essential financial institution in the Philippines.

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