MikeLigalig.com

By Leonard Acosta
Philippine News Agency

Albay Governor and presidential economic adviser Joey Salceda has proposed a P50-billion financial package increasing the capitalization of Bangko Sentral ng Pilipinas (BSP) and Philippine Deposit and Insurance Corp. (PDIC).

Salceda’s proposal calls for an increased capitalization of BSP by P40 billion and PDIC by P10 billion through the national government Multi-Year Obligatory Authority (MYOA).

Salceda said this measure would boost the real economy by protecting bank depositors who invested their hard earned money in their choice banks, thereby also assisting these banks.

In his proposal, the BSP, the Securities and Exchange Commission (SEC) and the Insurance Commission (IC) shall have an integrated financial oversight and supervision to close regulatory gaps versus current banks, investment houses under these regulatory bodies.

He said the BSP and PDIC should not engage in bailing out financially distressed banks and investment institutions but rather initiate measures to protect depositors by increasing their deposit insurance coverage.

The proposal calls for a gradual increase in the deposit insurance coverage to P500,000 from the current P250,000.

According to records, 95 percent of savings and current accounts are under the P250,000 insurable coverage of bank deposit accounts, which ”represents only 14 percent of the insurable amount” Salceda said.

“This is a pre-emptive rather than responding measure to counter this crisis triggered by the United States’ financial crash which would surely affect the country,” he noted.

He also stressed, “we can run but we can’t hide from the impact of an imminent global recession which is being conveyed by the crash in global markets.”

Salceda, one of the top economic advisers of President Arroyo, averred that “If we must assist banks, then we have to protect depositors, neither the lenders nor borrowers.”

He also recommended the setting up of an economic stimulus package up to P75 billion to strengthen the country’s real economy.

The Eco-package would shield the poor thru direct income transfer, increase food production thru DA interventions and expand productive capacity thru infrastructure acceleration.

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