THE INSURANCE FUND FOR THE COUNtry’s deposit insurer is not likely to grow this year because of the string of closures of rural banks over the past months that involve billions of peso worth of claims.

The deposit insurance fund (DIF)—which grew to P60.5 billion last year from P53.4 billion in 2007—is the accumulated premium payments of member-banks to the Philippine Deposit Insurance Corp. The fund is used by PDIC to service claims of depositors of failed banks.

PDIC president Jose Nograles said that since the start of the year, there have been 15 rural banks and two thrift banks placed under receivership. The figure includes the rural banks owned by the Legacy Group.

Nograles said PDIC expects to spend close to P15 billion this year to settle claims of depositors of the closed rural banks. On the other hand, he said, revenues likely to be generated by PDIC from its investments and premium collection will also be around P15 billion.

Banks that are members of PDIC are required to pay insurance premiums, proceeds of which go straight to the DIF. Proceeds from investments of PDIC also revert to the DIF.

“We expect the DIF to remain the same this year because of the amount we have to spend for claims,” Nograles said in an interview.

He said PDIC expects to generate anywhere between P6 billion and P7 billion this year from its investments, which are mostly in government securities, and about P8 billion from premium payments of member-banks.

Earlier, Congress enacted into law the bill raising the minimum deposit insurance coverage from P250,000 to P500,000 per depositor per bank.

PDIC, however, said the increase would not immediately affect the DIF because the law is not retroactive.