PDIC Does Not Know When Filipino Will Get Their Money
The Philippine Depositor Insurance Corporation (PDIC) is assuring clients of the banks that declared a bank holiday on Monday and shut down by the PDIC soon afterwards say people will get their money back. Exactly when that will happen, they don’t know.
That has to be a real hardship for some people, especially at Christmas time. The PDIC explained they to examine the records of the bank before making payouts. The Pilipino Rural Bank Incorporated was taken over on December 12th and the Philippine Countryside Rural Bank was also taken over on December 15th.
I’m just learning of this news, I would think this would put downward pressure on the Peso but it has been rising significantly against the American dollar over the last week or so. As I understand it though, part of the downward pressure on the dollar in the Philippines is caused by overseas workers sending cash to the Philippines. Also, Philippine Central Bank is protecting the value of the peso by buying the Peso. The dollar fell to P46.9 per 1 USD. A week ago the dollar was about P49 to 1 USD. That is a significant fall. I certainly hope that pattern reverses itself before the first of next month!
Now that I think about it, bank failures can cause the value of the peso to rise. That is exactly what happened in the US. When banks fail it sometimes causes banks to resist loaning to other banks. But I don’t know much about the banking system in the Philippines. I don’t know if it works similar to the US system or not. So I’m uncertain toward how this would affect the value of the Philippine Peso.
Filed under: Banking in Cebu Philippines
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