PDIC shifts to bulk sale approach in asset auction

State-run Philippine Deposit Insurance Corp. (PDIC) is venturing into the bulk sale approach of foreclosed real estate properties of shuttered banks due to strong interest from property developers.

On Monday, PDIC is set to conduct a bulk sale covering 438 residential lots with a total area of 94,514 square meters in Green Farm Royale Subdivision in Bgy. Pulong Bunga Silang, Cavite.

PDIC president Roberto Tan said this is the first time the agency will conduct a bulk sale that will engage other markets for asset disposal and at the same time reduce administrative cost in liquidation.

“A number of real estate developers have shown interest in the bulk sale of properties. There are also prospects for partnerships between former owners of the properties and those who will finance the bulk acquisition,” he said.

Tan said this is a welcome development as the agency hopes to tap into other markets to hasten the liquidation of similarly situated closed banks assets.

The lots to be auctioned on Monday comprise about 70 percent of the entire real and other properties acquired (ROPA) portfolio of the closed Accord Savings Bank.

The Bangko Sentral ng Pilipinas (BSP) ordered the closure of Accord Savings Bank in April 2009.

It pointed out proceeds from the sale of the residential lots as well as the bank’s other assets would be added to the pool of liquid assets of the closed bank for distribution to its uninsured depositors and creditors.

“The disposal of these assets increases the chances of recovery of uninsured depositors and creditors of their trapped funds,” PDIC said.

Last Feb. 9, the BSP’s Monetary Board issued a resolution, prohibiting the Rural Bank of Loreto (Surigao del Norte) Inc. from doing business in the country. It was the first bank to be ordered closed by the BSP this year.

Latest available records showed the Rural Bank of Loreto had 2,264 deposit accounts with total deposit liabilities of P5.95 million. Total insured deposits amounted to P5.94 million equivalent to 99.9 percent of total deposits.

Last year, the central bank ordered the closure of seven banks as it continued to weed out weak players in the industry.