The Philippine Deposit Insurance coverage Corp. (PDIC) introduced that it’ll double the most deposit insurance coverage protection (MDIC) for financial institution deposits, rising it from PHP500,000 to PHP1 million per depositor per financial institution.
In its Memorandum 2025-01 launched on Friday, the PDIC confirmed that the brand new MDIC will take impact on March 15.
“The rise within the MDIC was permitted by the PDIC Board of Administrators to supply enhanced safety and extra confidence for the depositing public,” the PDIC stated in a separate assertion.
Deposit insurance coverage serves as a authorities coverage and monetary security web designed to guard depositors and promote monetary stability. Depositors usually are not required to pay for this insurance coverage.
Below Republic Act 3591, as amended, the PDIC Board of Administrators has the authority to regulate the MDIC based mostly on inflation or different related financial indicators. The PDIC Constitution mandates that the MDIC undergoes evaluation each three years.
With the brand new MDIC of PHP1 million, 136 million deposit accounts, or 98.6 p.c of the entire 138 million deposit accounts within the nation, can be absolutely insured. This marks an enchancment from the present 97.6 p.c protection below the PHP500,000 MDIC.
By way of insured deposits, the entire will improve to PHP4.8 trillion, representing 24.5 p.c of the PHP19.5 trillion in complete deposits, in comparison with the earlier 18.3 p.c protection.
Regardless of the rise in protection, the PDIC assured that the Deposit Insurance coverage Fund (DIF) stays adequate to deal with potential insurance coverage dangers. The DIF-to-estimated insured deposits ratio is predicted to succeed in 5.3 p.c in 2025 and is projected to develop to the goal ratio of 8 p.c by 2031, consistent with worldwide finest practices.
Rizal Industrial Banking Corp. chief economist Michael Ricafort welcomed the transfer, stating that the upper deposit insurance coverage protection would supply larger confidence to the depositing public.
“This is able to additionally reply to larger costs to be extra attuned to the realities when it comes to sufficiency of deposit insurance coverage protection,” Ricafort stated.
He additional famous that the adjustment would improve stability and belief within the native banking system.
