Jan. 20--The Philippine Deposit Insurance Corp. (PDIC) will begin servicing the deposit insurance claims of the 12 rural banks of the Legacy Group in mid-February, a statement said Monday.

"Our priority is to service the claims of small depositors with deposits of P100,000 and below," PDIC President Jose Nograles said in the statement.

Officials estimate that the 12 rural banks have 130,000 deposit accounts in 50 locations across the Philippines.

Based on available data, small depositors represent about 62 percent of the deposit accounts in the closed banks, which are the Rural Bank of Paranaque, Pilipino Rural Bank, Rural Bank of Bais (Negros Oriental), Rural Bank of San Jose (Batangas), Bank of East Asia, First Interstate Bank, Philippine Countryside Rural Bank, Dynamic Rural Bank, Nation Bank, Rural Bank of Carmen (Cebu), Rural Bank of DARBCI and San Pablo City Development Bank.

Nograles said the accounts have to be examined prior to payout, specifically by reviewing bank records and verifying their validity, in order to safeguard the Deposit Insurance Fund -- the source of payout for claims -- and to protect depositors by ensuring that payments are made to the right people.

Nograles added that there is sufficient money to pay all valid claims.

"The pre-settlement examination is a prerequisite to claims payout," he explained. "PDIC's paramount concern is to pay valid claims of depositors at the soonest possible time to provide them immediate relief."

Working quickly

The PDIC reported that it is fast tracking the examination and payout process. To accomplish this, it has deployed more than half of the insurer's personnel complement in the field to this task. Another measure is the engagement of a central bank-accredited external auditor to assist in the pre-settlement examination.

The PDIC is also outsourcing the pre-settlement examination to speed up the process and enable insurer to start the payout by next month.

Several audit firms have signified interest to undertake the outsourcing job, including Manabat, Delgado, Amper & Co. (Deloitte Touche Tohmatsu), Isla Lipana & Co. (Price Waterhouse Coopers), Manabat San Agustin & Co. (KPMG), SGV (Ernst & Young) and Punongbayan & Araullo (Grant Thornton International).

The rural banks of Legacy were placed under PDIC receivership late last year, after those institutions declared a bank holiday. There was no word yet about settling the claims in the other closed rural banks that are not affiliated with the Legacy.

Also on Monday, The Manila Times reported that the Securities and Exchange Commission (SEC) shut down the Legacy Consolidated Plans Inc., along with two other pre-need firms, Scholarship Plan Philippines Inc. and All Asia Plans Corp.

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