THE PHILIPPINE DEPOSIT Insurance Corp. (PDIC) is looking to raise the maximum insurance coverage amount from the current P500,000 to account for inflation, its top official said.
“We’ll probably announce it within the first half. The implementation, that will have to be studied in detail,” PDIC President and Chief Executive Officer Roberto B. Tan told reporters on the sidelines of the Bangko Sentral ng Pilipinas’ (BSP) annual reception for the banking community held on Friday.
“The study is done. The board is now in discussions on the results of the study. The recommendation is to increase it,” he added, noting that they have yet to decide on the new amount.
Mr. Tan said higher deposit coverage is needed as the current value of P500,000 “has been eroded by inflation.”
The PDIC provides a maximum insurance coverage of P500,000 per depositor per bank. This amount was increased from the P250,000 ceiling in April 2009.
Under the amended PDIC charter passed in 2022, the agency may adjust the deposit insurance ceiling based on inflation and other economic indicators without legislation. The PDIC board must review the maximum deposit insurance coverage every three years.
Bankers Association of the Philippines President Jose Teodoro K. Limcaoco likewise said there is a need to adjust the deposit insurance coverage as the current amount is outdated.
“I think you have to calibrate your deposit coverage. It must grow with inflation as well… because the value of P500,000 whenever it was first set is clearly much lower than what P500,000 is today. So, it’s just appropriate to adjust with the real value,” Mr. Limcaoco told reporters on the sidelines of the same BSP event on Friday.
Meanwhile, Mr. Tan assured that the PDIC still has adequate funds even as it remitted P107.23 billion to the Bureau of the Treasury.
The PDIC’s Deposit Insurance Fund (DIF) is at around P250 billion, which Mr. Tan said is “more than enough.”
“The DIF continues to be maintained within the target level set by its Board of Directors based on international best practices,” he said.
“The banking system right now is very healthy based on financial indicators. So, I don’t think there’s anything to worry about,” Mr. Tan added.
The Department of Finance (DoF) said in a statement on Sunday that the remittance was made “in compliance with the Congressional mandate under the General Appropriations Act of 2024 and strictly in accordance with the Opinion rendered by the Office of the Government Corporate Counsel.”
The funds were used to finance various government infrastructure and social programs, it said.
“These projects are envisioned to drive economic growth by generating employment, boosting incomes, and reducing poverty, creating a positive multiplier for society,” the DoF said.
“The National Government assures the depositors and other stakeholders of the PDIC that this remittance does not compromise the soundness of the DIF which the corporation prudently manages,” it added. “The PDIC remains steadfast in its commitment to safeguarding the trust and confidence of the depositing public.” — A.M.C. Sy
