Philippine Deposit Insurance Corp.’s (PDIC) loans from the central bank is expected to increase to P86 billion this year, up 17.8 percent from P73 billion as of end-2009.

As of end-November last year, BSP’s total loans and advances amounted to P148.4 billion, of which PDIC loans account for almost 50 percent, the rest were rediscounted loans to banks.

Based on PDIC’s latest audited financial statement, it has unpaid loans amounting to P72.48 billion to the central bank as of the end of 2008, from P69.53 billion in 2007. These are financial assistance extended by PDIC to problematic banks to avoid the closure of these banks.

Under its charter, PDIC will approve a loan, in coordination with the BSP, to a financially-stressed bank to rescue the finances of said bank and to ensure its operations will not stop.