Last Monday LBC Bank failed, and billions of Pesos in depositor’s money is gone forever. Although the the Bank Regulators discovered something wrong with LBC Bank’s operations a year ago and gave it time to correct the situation; it still failed. The depositors found out Monday morning when the LBC bank didn’t open.
The personal side to this news is that it affects many members of my family, who were account holders with this bank. My Daughter Ymir in Singapore lost over P 200,000, my sister-in-law from Las Vegas is out P 800,000, My Daughter Hanna is out P 5,000 and my granddaughter had an account for P 3,000.
We have spent the week at meetings with the state-owned Philippine Deposit Insurance Corp PDIC and I have found out some interesting things. The P 500,000 insurance is the total amount you will receive no matter how much money you had in the bank and even if you had your money in multiple accounts, as proved by one American I was talking to, had Five Million Pesos in ten different accounts; he’ll receive in total P 500,000 and not a centavo more. He was one very angry dude!
At the Wednesday meeting I met over 25 foreigners who combined lost forty million pesos. We (Mayang and I) were there acting on our daughters behalf as Mayang has a Power of Attorney on Ymir Thea’s account. Her Sister in Las Vegas will either have to come here or try to settle their claim my mail as they didn’t allow anyone here to handle their accounts.
The people from PDIC told us that after all the paperwork’s were submitted, the wait to receive your money (up to P500, 000) will be seven months to a year and a half. My bet’s on the year and a half, if not longer.
Now I’ll tell you why I feel that if something sounds too good to be true, it is too good to be true, When the Peso to Dollar rate hit 55 to 1, about ten years ago, I was returning from sea and just happened to have $ 15,000.00 in my pocket, did I declare it? Of course, because I’m that kinda guy! I took all those nice Pesos to LBC bank and put them in time deposit accounts at 7% interest. Then I’d go down to the bank every three months and get my interest posted, and each time the bank manager would try to get me to move it all into a million Peso account and they would pay me 9%. My alarms started going off, as the most I could get in the States for a few $20,000.00 IRA’s was 5.4%.
I figured this LBC bank was headed for a fall, and over the next year I slowly closed each account and moved it back to the U.S. of A including the interest they paid. But I did have a good seven year run at some great interest rates. I told the people in Las Vegas what I was doing, but they were much smarter than me and went for that high interest. They showed me!
So my small piece of advice is to keep no more than P 500,000 in any one bank, insure those banks are international. And if you stop by a branch of your bank, and they tell you can only withdraw funds from the one you opened the account in, run, don’t walk to that bank and close the account that day.
Nothing struck me as very funny this week, and no bankers were hurt during the writing of this article, as they were all in hiding!
Be careful, be very, very careful.