The Bangko Sentral ng Pilipinas, the Philippine central bank, has padlocked a Makati-based bank named Bankwise Inc. and put it under receivership of the Philippine Deposit Insurance Corp.
This article from the Philippine Daily Inquirer explains why.
Many times, I have received emails from people who read INQUIRER.net, who say that it is all right to put money in a high-earning savings instrument from a small bank because deposits are insured up to P250,000. That’s foolish reasoning.
I have seen ordinary people get hurt by bank closures, and no amount of deposit insurance helped them deal with their problems. Claiming insurance does not happen overnight. It takes quite some time, although the PDIC has already shortened the process significantly.
The first line of defense against losing your deposits should be to know your bank well. If it’s a commercial bank, you should have an idea about its deposit base and its owners. If its a small rural bank in your area, you should know more than where it stands and which teller handles which area at noontime. Find out who are its owners and what are their track records.
It also happens that banks with reputable owners and board of directors may still close shop. But there are other signs of banks that are in trouble. A red-hot warning sign are abnormally high interest paid out on deposits.
When a bank is willing to pay interest that are suspiciously high, that means it is in grave need of cash to address whatever financial bleeding it is suffering from. I know it can be tempting, but greed can cause trouble!
A conversation with Money Makeover financial planner Joe Ferreria the other day went like this:
My friend said he knew that it is not good to put all your eggs in different baskets, so he deposited his money in different banks — the BPI branch in Binondo, the branch in Makati, and another branch in Quezon City.
Seriously… 
Accounts under one name, even in different branches and different kinds of deposit accounts will be treated as one account and insured only up to P250,000. The PDIC website gives illustrative cases for joint accounts, in trust for accounts, and/or accounts. Very easy to understand and very clearly illustrated. Click here.
Remember, banking is all about trust, more than convenience. Stay away from all those red flags and don’t diversify across branches! 
April 9th, 2008 at 5:55 pm
@Salve (post #14)
quote:
Re qualifications, rural banks have to become a member of PDIC so they can claim that deposits with them are insured. Click on this link to get a list of rural banks that are members of PDIC:
http://www.pdic.gov.ph/memberbanks.asp
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No need to check if a bank is a member of PDIC coz All banks, big and small, are required to be a member of PDIC-it is COMPULSARY.
quote:
do share with us your secret on how to avoid banks as much as we can hehe.
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why avoid in the first place? but if you’re bent on avoiding them, just don’t transact with them. Any problem with that? Sorry if you’ll find it sarcastic, am just trying to get it straight or most probably i just didnt get what you really want to avoid. Remember this, putting your money in a bank nowadays is primarily for safekeeping IMO.
April 9th, 2008 at 11:40 am
chaklie, thanks also for the information on remittance.
April 9th, 2008 at 11:39 am
hi chacklie, i know it’s inconvenient, but i’d rather suffer having to spend one day dealing with MMDA than pay padulas. Bahala sila if they are expecting anything. But here’s a funny (?) experience from a friend: once he got pulled over in SLEX and the officer was asking for padulas. My friend pretended to be really desperate for money and said he only had P140 pesos in his wallet. They split his cash and he ended up paying P70. nakihati pa!
April 8th, 2008 at 11:59 pm
@ Salina
Yeah it’s true that some remittance services take longer than others. Here’s a breakdown of my known services and their speed at transactions.
International:
Western Union - usually in minutes, collecting of money pretty quick depending on where you go to pick up remittance. Good place to go where they don’t usually give you a hassle are M.Lhuiller. Fairly expensive
Xoom - internet only using ATM or credit card, transit time depends on form of payment, using PayPal to remit using Xoom takes shortest amount of time 4-5 hours from time of processing the remittance to availability for collection of funds. Cheap. See website.
PNB Remittance - there’s a lot of people who have problems with the bank itself, but I currently use the remittance, bank to bank only, and have not had problems. Money is available for withdrawal within minutes. Cost starts at $7.00
Local:
ML Kwarta Padala - probably the least hassle. Money available for pickup in minutes. Rates start at Php17.00
I’ve tried LBC, don’t want to advertise it. Bad service. Long delay in delivery. Pick up at LBC location is a joke.
April 8th, 2008 at 11:50 pm
Regardless of who you complain to in the Philippines, it really wouldn’t help much or at least if it does, it takes an absurd amount of time.
For instance, you complain to consumer affairs or the BBB counterpart in the Philippines, what would you expect to happen? That they’ll swiftly investigate your complaint? Ha! Good luck.
Money makes the world go round, and that’s especially true in the Philippines. That includes those services that should be protecting the consumer and helping them get back money they’ve lost from scams, overpricing, etc.. but those who should be helping still require you to give “padulas” so whatever you need done is done faster otherwise if you don’t give some kind of “tip” you can expect your complaint to be put in the bottom of the file cabinet. Literally.