QuestionsQuestions (MEMORANDUM ORDER NO. 77)
PDIC was created under Republic Act (RA) No. 3591, as amended. It is mandated to provide insurance protection to bank depositors, promote safe and sound banking practices with the Bangko Sentral ng Pilipinas (BSP), provide financial assistance to distressed banks, and act as mandatory receiver and liquidator of closed banks.
Section 2-A authorizes the President to fix the salary of the President of PDIC at a sum commensurate to the position’s importance and responsibilities. It further provides that the total salary of the PDIC President (including allowances and other emoluments granted by the PDIC Board) becomes the ceiling for fixing the salary, allowances, and other emoluments of all other PDIC personnel.
It fixes the basic salary of the PDIC President at an amount equal to the BSP Governor’s basic salary (stated as P150,000) effective January 1, 1999.
No. The Memorandum Order states that the basic salary of the PDIC President is equal to the BSP Governor’s salary “exclusive of allowances and other emoluments” granted or to be granted by the PDIC Board of Directors.
It delegates authority to the PDIC Board to adjust the basic salary of the PDIC President with each change in the salary of the BSP Governor.
Section 2 provides that the PDIC President’s salary (as fixed by the Memorandum Order, plus allowances and other emoluments reviewed by the Board) shall be the ceiling for fixing the salary, allowances, and other emoluments of all other PDIC personnel.
It indicates that the ceiling mechanism and the Board’s fixing/review of allowances and emoluments for PDIC personnel (as implemented under this Memorandum Order) apply to compensation items not covered by RA 6758.
PDIC provides deposit insurance, financial assistance to distressed banks, and serves as mandatory receiver and liquidator of closed banks, especially during banking system stress.
It states that PDIC is fully capable of funding incremental compensation adjustments of its personnel solely from PDIC resources, without recourse to the national government—supporting the propriety of compensation adjustments.
It states PDIC and BSP perform complementary roles in maintaining a strong and stable banking system, with PDIC primarily responsible for deposit insurance, financial assistance to distressed banks, and bank receivership and liquidation.
It specifies that the basic salary is effective January 1, 1999.
The PDIC Board of Directors is authorized to adjust (increase or otherwise modify) the PDIC President’s basic salary with each change in the BSP Governor’s salary.
The order is issued by President Joseph Ejercito Estrada, with the Executive Secretary (Ronaldo B. Zamora) signing as reflected in the provided excerpt.
It clarifies that the subject of the salary fixing is the PDIC President specifically, and that this fixed salary and related emoluments serve as the benchmark/ceiling for other PDIC personnel.
The linkage suggests comparability in importance, responsibilities, and competitive remuneration needed to attract highly competent professionals in roles closely related to banking stability and regulation/oversight functions.
The Board must review the allowances and other emoluments together with the PDIC President’s salary established by the order, because the combined amount functions as the ceiling for fixing compensation for other PDIC personnel.