MANILA, Philippines--The Philippine Deposit Insurance Corp. will no longer allow depositors to split their accounts worth P250,000 or less so that the cash they have parked in banks will be covered by insurance.

In a regulation it recently issued, PDIC said “split” accounts belonging to the same set of depositors would not be covered by insurance in case a bank were to run into trouble.

Deposit splitting is technically defined as the breaking down of deposits worth more than P250,000 into two or more accounts, to be owned by two or more individuals, within 120 days after a bank declares a holiday.

“[Depositors] shift the risk to PDIC by splitting [their account] ... this is a circumvention of the deposit insurance law and poses undue risk to the [deposit insurance fund],” PDIC president Jose Nograles said in a statement.

The DIF is now worth over P60 billion, Nograles added.

Under the law, the deposit insurance covers a maximum amount of P250,000 per bank, per person. If someone deposits more than P250,000 in a bank, even if it is under different accounts, the depositor will only be paid P250,000 if the bank closes down.