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Are T-bills bought from banks covered by PDIC?

bauer · 12 · 5486

bauer

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We are always buying treasury bills from local banks.  As proof, we get a confirmation note of our transaction using the banks' letterhead.  Has anyone know for certain if our t-bills placement covered by PDIC separately from our time deposit account with them?

Based on my understanding, the time deposit is a direct liability of the bank.  Hence, it is covered by PDIC.

While t-bills are a direct liability of the government and the bank is just an issuer (or agent of the government).

Example, if the bank suddenly closed and you have a 250,000 placement on t-bills and another 250,000 placement on time deposit.  Can you claim the total of P500,000 for both transaction?


workoshore

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Reply #1 on: Apr 17, 2009, 07:16 PM
^from the vaults of BTr... :hihi:

Treasury Bills

Treasury Bills are government securities
which mature in less than a year. There are three tenors of Treasury Bills: (1) 91 day (2) 182-day (3) 364-day Bills. The number of days are based on the universal practice around the world of ensuring that the bills mature on a business day. Treasury Bills are quoted either by their yield rate, which is the discount, or by their price based on 100 points per unit. Treasury Bills which mature in less than 91-days are called Cash Management Bills (e.g. 35-day, 42-day).

Treasury Bonds

Treasury Bonds are government securities
which mature beyond one year. At present there are five maturities of bonds (1) 2- year (2) 5 - year (3) 7 - year 4) 10 - year and (5) 20-year. These are sold at its face value on origination. The yield is represented by the coupons, expressed as a percentage of the face value on per annum basis, payable semi-annually.

Government Securities

Government Securities are unconditional obligations of the sovereign state. It is backed by the full taxing power of the sovereignty. Therefore, government securities are practically free from default.

The Philippine Government issues two kinds of government securities (GS): Treasury Bills and Treasury Bonds, so-called because it is the Bureau of the Treasury which originates their sale to the investing public through a network of licensed dealers. Government agencies, Local Governments and government-owned or controlled corporations may float securities but these are not labeled as Treasuries. Government securities are no longer certificated, they are known as "scripless", just like in USA, Canada, China and Korea. GS discount or coupons are subject to twenty percent final income tax which is withheld upon floatation of Treasury Bills or upon payment of the coupon for Treasury Bonds. No other tax is imposed on the secondary market buyer.

***

Answer: Technically, Yes... :book:

cheers... :cool2:


bauer

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Reply #2 on: Apr 20, 2009, 12:46 PM
di kasi clear sa present PDIC charter.  It looks like it is not clear also sa new PDIC law which remains to be enacted.  If ever some small banks offer it to the public, it mght turn out that PDIC will not honor the t-bills purchases on top of the guaranteed P250k insurance.


kiplinger

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Reply #3 on: Apr 28, 2009, 08:01 PM
Hi guys. By the same token, are ROP $ denominated Bonds guaranteed in case the retailing bank closes? e.g., if i have, say $20K worth of ROP 2015 bonds placed with Citi and they fail the stress test and closed shop here, I can still claim my ROP bonds right?


AbysmalSpecter

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Reply #4 on: Apr 28, 2009, 09:32 PM
Your ROP bonds will be paid by the Government of the Republic of the Phils.  Kahit magsara lahat ng bangko, you'll still get paid by the national government.


AbysmalSpecter

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Reply #5 on: Apr 28, 2009, 09:35 PM

We are always buying treasury bills from local banks.  As proof, we get a confirmation note of our transaction using the banks' letterhead.  Has anyone know for certain if our t-bills placement covered by PDIC separately from our time deposit account with them?

Based on my understanding, the time deposit is a direct liability of the bank.  Hence, it is covered by PDIC.

While t-bills are a direct liability of the government and the bank is just an issuer (or agent of the government).

Example, if the bank suddenly closed and you have a 250,000 placement on t-bills and another 250,000 placement on time deposit.  Can you claim the total of P500,000 for both transaction?


Yes, you can.  Your t-bill placement is not considered a deposit.  


kiplinger

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Reply #6 on: Apr 28, 2009, 10:25 PM


bauer

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Reply #7 on: Apr 29, 2009, 01:39 PM


Thanks AS! Just wanted to be sure.



did you get the certificate with citi that you have placed a 20k investment at ROP dollar bond?  If not, better get the certificate with them. There's a lot of problems in international banks who went bankrupt about missing records


workoshore

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Reply #8 on: Apr 29, 2009, 03:04 PM

di kasi clear sa present PDIC charter.  It looks like it is not clear also sa new PDIC law which remains to be enacted.  If ever some small banks offer it to the public, it mght turn out that PDIC will not honor the t-bills purchases on top of the guaranteed P250k insurance.


Di po talaga kasama ang t-bills, kasi GS po ito, mga bank deposits lang po ang sa PDIC,,,ang magiging concern lang siguro natin dito ay kung authorize yong dealer o yong nag-issue ng t-bills...http://www.treasury.gov.ph/govsec/handbill/gsed_list.pdf

cheers... :cool2:


kiplinger

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Reply #9 on: May 05, 2009, 12:01 AM



did you get the certificate with citi that you have placed a 20k investment at ROP dollar bond?  If not, better get the certificate with them. There's a lot of problems in international banks who went bankrupt about missing records
Yes I did. I think I got that and a certificate from another bank that said they (the latter bank of which I'm not sure this time what it was) were the custodian bank. Thanks again Bauer!


joss

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Reply #10 on: Sep 12, 2009, 10:29 AM
hindi nga coverd ng pdic ang t bills (peso) pansin ko lang mas masama ang panahon mas malaki ang rate ng t bills  sa lahat ng transactions ko  mula 1989 hanggang ngayon wala akong naging problema about security di pa payag ang mga creditors ng pinas na magunaw ang pinas  dami utang ng pinas hehehe


Rothschild

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Reply #11 on: Jun 29, 2014, 12:38 PM
T-bills are not covered by PDIC.. But guaranteed by the Bureau of Treasury. Pag nagsara ang bank mo, ita-transfer lang ng bureau of treasury sa ibang banks yung pagrelease ng coupon payments syo


 


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