Maximum deposit insurance coverage: PDIC doubles it to P1M

The higher minimum deposit insurance coverage will take effect on March 15

Philippine peso bills (INQUIRER FILE PHOTO)

MANILA, Philippines – The Philippine Deposit Insurance Corp. (PDIC) will double the maximum deposit insurance coverage (MDIC) for bank deposits.

In its Memorandum 2025-01 released on Friday, the PDIC said the MDIC would be increased to P1 million per depositor per bank from the current P500,000.

The higher MDIC will take effect on March 15.

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“The increase in the MDIC was approved by the PDIC Board of Directors to provide enhanced protection and more confidence for the depositing public,” the PDIC said in a separate statement.

Deposit insurance is a government policy and a financial safety net to protect depositors and help promote financial stability.

Depositors do not pay for deposit insurance.

The PDIC said Republic Act 3591, as amended, on the PDIC Charter authorizes the PDIC Board of Directors to adjust the MDIC to an amount indexed to inflation or in consideration of other economic indicators as it deems appropriate.

The PDIC Charter also provides that the MDIC is up for review every three years.

The PDIC said with the new MDIC of P1 million, P136 million in deposit accounts or 98.6 percent of the total deposit accounts of P138 million will be fully insured, compared to 97.6 percent of the deposit accounts under the P500,000 MDIC.

In terms of amount, insured deposits will increase to P4.8 trillion, or 24.5 percent of total deposits of P19.5 trillion, compared with 18.3 percent under the P500,000 MDIC.

The PDIC said that while the adjustment in MDIC increased the estimated insured deposits in the banking system, the Deposit Insurance Fund (DIF) remains adequate to meet the potential insurance risks that may arise.

The ratio of the DIF to estimated insured deposits is expected to reach 5.3 percent in 2025 and grow to meet the new target ratio of 8 percent by 2031, based on a build-up period aligned with international best practices.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the higher deposit insurance coverage would provide the depositing public with greater confidence.

“This would also respond to higher prices to be more attuned to the realities in terms of sufficiency of deposit insurance coverage,” he said.

Ricafort said this would further support greater confidence and the stability of the local banking system. (PNA)