MANILA, Philippines — The Philippine Deposit Insurance Corporation (PDIC) has announced an increase in the Maximum Deposit Insurance Coverage (MDIC) for bank deposits from P500,000 to P1 million per depositor, per bank, effective March 15, 2025.
Despite the increase, PDIC confirmed that there will be no rise in the assessment levied on banks.
The PDIC Board of Directors approved the adjustment to provide enhanced protection to depositors, reinforce confidence in the banking system, and contribute to overall financial stability.
The move is expected to help secure more depositors’ savings, stabilize deposit movements, maintain liquidity in the banking system, and prevent panic-based runs.
With the new MDIC of P1 million, the number of fully insured deposit accounts will increase to 136 million, or 98.6% of the total 138 million deposit accounts, compared to 97.6% at the previous P500,000 MDIC, based on data as of September 30, 2024.
In terms of value, insured deposits will rise to P4.8 trillion, representing 24.5% of the total P19.5 trillion in deposits, compared to 18.3% under the prior coverage limit.
PDIC assured that despite the increased insured deposits, the Deposit Insurance Fund (DIF) remains adequate to address potential insurance risks.
The DIF-to-estimated insured deposits ratio is projected to reach 5.3% in 2025, with a target ratio of 8.0% by 2031, in line with international best practices.
Under Republic Act No. 3591, as amended, or the PDIC Charter, the PDIC Board of Directors is authorized to adjust the MDIC based on inflation and other economic indicators.
The decision to double the MDIC follows a methodology recommended by the World Bank to restore the real value of the MDIC set in 2009, which has been eroded by inflation.
The last adjustment to the MDIC was made in 2009, when it was raised to P500,000 in response to the 2008 global financial crisis.
Prior to that, the MDIC had been adjusted five times: P10,000 in 1963, P15,000 in 1978, P40,000 in 1984, P100,000 in 1992, P250,000 in 2004, and P500,000 in 2009.
The PDIC emphasized that deposit insurance plays a crucial role in financial stability by ensuring depositor confidence in banks.
PDIC President and CEO Roberto B. Tan highlighted the importance of the move, stating, “Deposit insurance is a key pillar of financial stability. By guaranteeing the protection of bank deposits up to the MDIC, deposit insurance bolsters depositor confidence in banks and safeguards the depositing public to a larger extent. Aligned with current economic conditions, the new MDIC amount gives Filipinos greater confidence to continue saving in banks to secure their future. This also signifies good prospects for the development of the broader economy.”
The adjustment underscores the government’s commitment to strengthening the financial safety net system, fostering trust in banking institutions, and ensuring a resilient financial environment for depositors and the broader economy.
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