ROXAS: P1M DEPOSIT INSURANCE AN OVER-REACTION

Liberal President Senator Mar Roxas today ridiculed Malacanang's proposed P1-million increase in bank deposit insurance as another "photo-op" tactic based not on a real concern for the impact of the global financial crisis on Filipinos, but more on scoring "pogi" points for President Gloria Macapagal-Arroyo.

Roxas said Malacanang should instead focus on working out a strategy that includes recasting the proposed 2009 national budget so that more funds could be allocated to safety nets for food security, job security and education reform that would blunt the negative effects of the ongoing global financial crisis.

"Gaya ng lagi nating nakikita sa Malacanang, pa-'pogi points' lang ang hanap ng Palasyo sa panukalang ito. Imbes na siguraduhing aayusin ng ating mga bangko ang kanilang palakad sa sistemang pampinansiyal ay lalo lang silang mae-engganyong paglaruan ang mga deposito ng taumbayan (Like what we have always seen from Malacanang, the Palace only wants to project good image with this proposal. Instead of strengthening financial responsibility among banks, it would encourage them to play with the hard-earned deposits of the people)," he said.

Roxas stuck with his original proposal that bank deposit insurance coverage be doubled from the current P250,000 to P500,000 to be implemented only for three years when the global economy has stabilized anew.

"Sa tingin ko, sapat na ang P500,000 dahil nubenta'y siyete porsyento ng mga deposito ay sakop na nito (I believe P500,000 is enough because it covers already 97% of all deposits)," he said.

He cautioned Malacanang and Congress against rushing head-on to pass the measure without weighing carefully its financial implications, especially in its effects on investing and spending behavior of banks, which may decide to engage in riskier financial transaction due to the increased insurance coverage.

"Increasing the coverage of deposit insurance would naturally encourage banks to engage in riskier behavior than they normally would. Baka imbes na solusyon ang ibibigay natin sa taumbayan ay isa palang mas malaking batong ipupukpok sa ulo nila (We may be giving the citizens a heavy stone to bang their heads with instead of a solution to this crisis of confidence)," Roxas said,