DOF defends use of P107B idle remittances
The Department of Finance (DOF) said the excess funds of P107.23 billion remitted by the Philippine Deposit Insurance Corp. (PDIC) to the National Treasury are “unrestricted” and may be used for other purposes.
Reacting to previous reports about concerns raised by some sectors over the DOF’s intention to use the idle funds to support priority government projects, the DOF said the amount is composed of cash and investment balances, and are net of restricted funds.
Based on a DOF circular, the unrestricted funds, also called fund balance, was computed by deriving the reasonable level of reserve funds that must be maintained by the government-owned and -controlled corporations (GOCCs), considering the disbursements from years 2020 to 2023.
The DOF said the remaining funds in the Deposit Insurance Fund (DIF) is equivalent to 5.8 percent of the country’s estimated insured deposits, which is well within the PDIC Board’s target range of five to eight percent, and which Finance Secretary Ralph Recto said is actually way above international standards.
“They have sufficient DIF, roughly at P250 billion, if I’m not mistaken. Second, in the last five years, if I recall, they only spent P1 billion,” Recto said.
The DOF said that historically, there is a very minimal chance of fully utilizing the DIF.
Data as of November 2024 showed PDIC has paid P282.31 million for claims for deposit insurance liabilities.
The finance department said PDIC’s remittances, along with efforts to maximize non-tax revenues, allowed the government to raise more funds to meet the needs of Filipinos without imposing new taxes or resorting to more borrowings.
“Utilizing GOCCs’ excess funds is a necessary step to help the country recover from the pandemic that dealt it the hardest economic blow since post-World War II,” the DOF said in the statement. “On top of this, the Philippines navigates an ocean of global uncertainties due to geopolitical tensions—two hot wars, a trade war and a looming cold war. These uncertainties disrupt the world’s recovery from the pandemic, with inflation skyrocketing in almost all economies due to higher commodity prices. Just as we did during the pandemic, we are engaging in the effort of Bayanihan by efficiently using all our available resources—this means mobilizing idle, excess and sleeping funds to benefit the Filipino people,” it added.