Philippine Deposit Insurance Corp. (PDIC). INQUIRER FILE PHOTO
MANILA, Philippines – Starting today, more bank savings are going to be protected under the expanded insurance coverage for deposits.
The Philippine Deposit Insurance Corp. (PDIC)—which is mandated to safeguard money kept in bank accounts —finally implemented the new maximum deposit insurance coverage (MDIC) of P1 million per depositor per bank, which was double the previous coverage of P500,000.
The expanded MDIC is projected to fully insure over 147 million accounts in 2025, or 98.6 percent of the total deposit accounts in the local banking system.
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In terms of amount, depositor funds amounting to P5.3 trillion will be safeguarded by the PDIC, accounting for 24.1 percent of the total deposits held by the banking sector.
To compare, the ratio of insured accounts under the old MDIC was at 97.6 percent as of December 2024. In terms of amount, the share of insured funds to total deposits was at 18.4 percent before.
It was the amendments to the PDIC charter back in 2022 that allowed the state insurer to adjust the MDIC based on inflation and other relevant economic indicators without the need for a new law.
The law says the MDIC may be adjusted “in case a condition occurs that threatens the monetary and financial stability of the banking system that may have systemic consequences.” Any change in the MDIC must have the PDIC board’s unanimous vote.
Also, the MDIC is up for review every three years and the PDIC board of directors is authorized to increase it, if necessary, with the approval of the President.
Some reminders
At a press conference yesterday, officials of the PDIC explained how the MIDC works.
For one, the MDIC can only be used to reimburse the depositors of banks that had been ordered closed by the Bangko Sentral ng Pilipinas (BSP). This means that funds lost due to other reasons like fraud are not protected by the PDIC.
Moreover, the enhanced protection will have a prospective application, meaning it will only cover deposits maintained in banks that had been shuttered on or after the effectivity date of the new MDIC.
Multiple accounts
Officials of the PDIC also clarified that the P1 million MDIC will be applied per depositor, not per account. So, if a person has several accounts in the same bank, the funds will be consolidated and only up to P1 million will be insured.
In the case of people that have joint accounts, the coverage of P1 million is separate for his or her single accounts and the joint accounts. This means that it’s possible that he or she can be insured up to P2 million.
Finally, PDIC explained that the insurance will only cover bank deposits. Simply put, funds stored in e-wallets like Gcash as well as investment products and securities are not covered.