MANILA, Philippines – The state-owned Philippine Deposit Insurance Corp.
 said it would shell out P10.7 billion to settle the valid deposit claims
 filed by clients of the defunct rural banks under the controversial
 Legacy group.
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 PDIC president Jose Nograles said his office was committed to settling
 all the valid deposit claims, noting it had sufficient funds to do so.
The deposit insurer targets to make all the checks available for release
 before the end of October.
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 “From day one, we have been straightforward in saying that funding for
 the Legacy payout of valid claims was more than sufficient. The problem
 laid in distinguishing between what were valid and invalid deposit
 accounts. We have resolved that,” Nograles said.
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 Deposits placed in the Legacy-owned rural banks were estimated at P14
 billion. PDIC, however, said that following the process of validating
 all deposit claims, only P10.7 billion of these were found valid.
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 The balance included denied deposit claims (P374 million), claims with
 incomplete supporting documents (P1.15 billion), and claims that were
 referred to PDIC’s legal department for further verification (P1.78
 billion).
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 PDIC said the 12 Legacy-owned banks placed under its receivership late
 last year had a capital deficiency of P16.64 billion. This represented
 the difference between the banks’ combined assets and liabilities.
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 Imelda Singson, PDIC executive vice president, said PDIC would only
 shoulder the payment of insured deposits. Given that the Legacy-owned
 banks had a capital deficiency, clients with uninsured deposits—those in
 excess of the maximum deposit insurance coverage of P250,000 per person
 per bank—and creditors would not get paid.
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 PDIC’s audit showed that the Legacy banks had combined assets of only
 P856.14 million as against the P19.82 billion in assets stated in the
banks’ books.
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 “Clearly, there had been an overvaluation of the assets of the banks,”
 Singson said.
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 Total liabilities of the banks as estimated by PDIC–both deposit
 liabilities and liabilities to creditors–amount to P17.49 billion.
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“Because of the capital deficiency of the banks, other claimants
 [creditors and owners of uninsured deposits] would not be able to get
 paid,” Singson said, noting that even PDIC would not be able to get
 compensation from the payment of deposit claims.