PDIC Doubles Deposit Insurance Coverage to PHP1 Million

The Philippine Deposit Insurance Corp. (PDIC) announced that it will double the maximum deposit insurance coverage (MDIC) for bank deposits, increasing it from PHP500,000 to PHP1 million per depositor per bank.

In its Memorandum 2025-01 released on Friday, the PDIC confirmed that the new MDIC will take effect on March 15.

"The increase in the MDIC was approved by the PDIC Board of Directors to provide enhanced protection and more confidence for the depositing public," the PDIC said in a separate statement.

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Deposit insurance serves as a government policy and financial safety net designed to protect depositors and promote financial stability. Depositors are not required to pay for this insurance.

Under Republic Act 3591, as amended, the PDIC Board of Directors has the authority to adjust the MDIC based on inflation or other relevant economic indicators. The PDIC Charter mandates that the MDIC undergoes review every three years.

With the new MDIC of PHP1 million, 136 million deposit accounts, or 98.6 percent of the total 138 million deposit accounts in the country, will be fully insured. This marks an improvement from the current 97.6 percent coverage under the PHP500,000 MDIC.

In terms of insured deposits, the total will increase to PHP4.8 trillion, representing 24.5 percent of the PHP19.5 trillion in total deposits, compared to the previous 18.3 percent coverage.

Despite the increase in coverage, the PDIC assured that the Deposit Insurance Fund (DIF) remains sufficient to address potential insurance risks. The DIF-to-estimated insured deposits ratio is expected to reach 5.3 percent in 2025 and is projected to grow to the target ratio of 8 percent by 2031, in line with international best practices.

Rizal Commercial Banking Corp. chief economist Michael Ricafort welcomed the move, stating that the higher deposit insurance coverage would provide greater confidence to the depositing public.

"This would also respond to higher prices to be more attuned to the realities in terms of sufficiency of deposit insurance coverage," Ricafort said.

He further noted that the adjustment would enhance stability and trust in the local banking system.

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