Orlando Harmon
The Philippines has a deposit insurance fund called the Philippine Deposit Insurance Corporation (PDIC). It was established in 1963 to protect small investors and depositors and promote financial stability and confidence in the country's banking system. The fund guarantees deposits of up to PHP 500,000 per depositor in the event that a bank cannot fulfil its obligations.
| Characteristics | Values |
|---|---|
| Name of the insurance | Philippine Deposit Insurance Corporation (PDIC) |
| Type of insurance | Deposit insurance |
| Maximum deposit insurance coverage | P500,000 per depositor |
| Account types | Single accounts, Joint accounts |
| Year of establishment | 1963 |
| Owner | Philippine government |
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What You'll Learn
The Philippine Deposit Insurance Corporation (PDIC)
The PDIC insures deposits up to a certain amount, which has increased over the years. In 1984, the maximum deposit insurance coverage was P40,000 per depositor, as per Presidential Decree 1897. In 2020, the maximum coverage was P500,000 per depositor of a closed bank, including accounts maintained in the same right and capacity for a depositor's benefit, whether under their name or others. As of 15 March 2025, the maximum deposit insurance coverage provided by the PDIC has been increased to PHP1,000,000 per depositor per bank.
The PDIC has implemented various initiatives to strengthen the banking sector, particularly rural banks, through funding and support programs. They also promote the importance of saving in banks and provide guidance to depositors of closed banks on filing deposit insurance claims.
The PDIC is governed by the Department of Finance and receives guidance from the International Association of Deposit Insurers. It is a crucial component of the Philippines' financial system, working to protect depositors and maintain stability and confidence in the banking sector.
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Deposit insurance coverage
In the Philippines, deposit insurance is governed by the PDIC (Philippine Deposit Insurance Corporation), a government-run insurance fund under the Department of Finance. The PDIC was established on 22 June 1963 by Republic Act No. 3591, which was later amended by Republic Act 6037 in 1969, making membership to the PDIC compulsory for all banks. The primary function of the PDIC is to protect depositors by providing deposit insurance coverage for the depositing public and help promote financial stability.
Deposit insurance is the assured amount a bank depositor gets in the case that the bank cannot fulfil its obligations. It is mandatory by law and is designed to maintain financial stability. The PDIC pays deposit insurance on all valid deposits up to a Maximum Deposit Insurance Coverage (MDIC) of PHP 500,000 per depositor of a closed bank. This amount includes accounts maintained in the same right and capacity for a depositor's benefit, whether it is under their name or the name of others. The total share of a co-owner in several joint accounts may exceed PHP 500,000, but they will only be insured up to the maximum deposit insurance amount.
The PDIC determines if these deposits are valid by checking banking records evidenced by an inflow of cash. Investment products such as bonds and securities, trust accounts, and other similar instruments are excluded from PDIC deposit insurance. The PDIC is also granted the flexibility to adjust the maximum deposit insurance coverage in the case of a condition that threatens the monetary and financial stability of the banking system, subject to the approval of the President of the Philippines.
Over the years, the maximum deposit insurance coverage has been increased several times. In 1978, it was increased to 15,000 pesos per depositor, and in 1984, it was increased to PHP 40,000 per depositor. In 1992, it was further increased to PHP 100,000, and in 2025, the maximum deposit insurance coverage was increased to PHP 1,000,000 per depositor per bank.
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Single and joint accounts
In the Philippines, single accounts are individually-owned accounts or accounts held under one name, either as a natural person (any individual) or juridical entity (corporation, partnership, cooperative, etc). Single accounts are insured by the Philippine Deposit Insurance Corporation (PDIC) up to a maximum of Five Hundred Thousand Pesos (P500,000) per depositor.
Joint accounts, on the other hand, are accounts held under more than one name. Joint accounts can be savings accounts, checking accounts, or time deposits, and are commonly used by business partners, associations, and couples (married or unmarried) for convenience and transparency in managing their shared income and expenses.
The PDIC also insures joint accounts separately from single accounts. Each depositor's total shares in all their joint accounts are insured up to P500,000. This means that even if a depositor has multiple joint accounts, their insured amount is still limited to the maximum deposit insurance coverage of P500,000. It's important to note that joint account holders have the authority to deposit money into the account individually, without the need for authorisation from the other depositor(s).
Additionally, in the case of a deceased joint account holder, each surviving co-depositor can withdraw their proportionate share of the account upon submission of a certified true copy of the death certificate.
While the PDIC insures deposits of up to P500,000 per depositor, some sources mention that deposits are insured up to P1 million per depositor.
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Maximum deposit insurance coverage
In the Philippines, deposit insurance is governed by the PDIC (Philippine Deposit Insurance Corporation), a government-run insurance fund under the Department of Finance. The PDIC was established in 1963 by Republic Act 3591, which was later amended by Republic Act 6037 in 1969, making membership to the PDIC compulsory for all banks. The primary function of the PDIC is to protect small investors/depositors and promote financial stability. The PDIC achieves this by providing deposit insurance coverage for the depositing public.
The maximum deposit insurance coverage (MDIC) provided by the PDIC has changed over time. In 1969, the PDIC started collecting the maximum assessment rate of 1/18 of 1% of net assessable deposits per annum. In 1978, the maximum deposit insurance coverage was increased to 15,000 pesos per depositor, according to Presidential Decree 1451. In 1984, the maximum coverage was increased to 40,000 pesos per depositor by Presidential Decree 1897. In 1992, Republic Act 7400 was enacted, which further increased the maximum coverage to 100,000 pesos. In 2009, the PDIC Charter was amended by the passage of Republic Act 9576.
As of March 15, 2025, the PDIC has doubled the MDIC to PHP1 million per depositor per bank from the previous amount of PHP500,000. This increase was approved by the PDIC Board of Directors to enhance protection and promote confidence in the depositing public. With this increase, the PDIC estimates that 98.6% of total deposit accounts will be fully insured. The adjustment in MDIC also increases the estimated insured deposits in the banking system, while the Deposit Insurance Fund (DIF) remains adequate to meet potential insurance risks.
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The role of the World Bank
In the Philippines, deposit insurance is governed by the PDIC (Philippine Deposit Insurance Corporation), a government-run insurance fund under the Department of Finance. The PDIC exists to protect depositors by providing deposit insurance coverage and promoting financial stability.
The World Bank is an international development organisation owned by 187 countries. Its role is to reduce poverty by lending money to the governments of its poorer members to improve their economies and the standard of living of their citizens. The World Bank has funded more than 12,000 projects and expanded its reach into nearly all of the world's developing countries. It is one of the world's largest research centres in development, with specialised departments that advise countries in areas like health, education, nutrition, finance, justice, law, and the environment.
The World Bank is a group of five multilateral institutions that aim to eradicate global poverty. It is devoted to international investment dispute settlement and promoting global health, inclusive education, and social protection. The Bank invests in projects, policies, governance, and systems that create opportunity and prosperity. It also provides sustainable food systems, water, and economies for a healthy planet.
The World Bank works with all clients as one World Bank Group, in close partnership with other multilateral institutions, the private sector, and civil society. The Bank's financial reserves come from funds raised in financial markets, earnings on investments, fees paid by member countries, contributions made by members, and from borrowing countries themselves when they pay back their loans. The Bank lends only a portion of the money needed for a project, with the borrowing country making up the rest from other sources or its own funds.
The World Bank's mission is to end extreme poverty and boost shared prosperity on a livable planet. It aims to achieve this through inclusive development, resilience to shocks, and sustainability.
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Frequently asked questions
The PDIC is a government-run deposit insurance fund that was established on 22 June 1963. Its primary function is to protect small investors/depositors and promote financial stability.
The PDIC insures deposits of up to ₱1,000,000. It also works to strengthen the mandatory deposit insurance coverage system to generate, preserve, maintain faith and confidence in the country’s banking system, and protect it from illegal schemes.
Deposit insurance is the assured amount a bank depositor gets in the case that the bank cannot fulfil its obligations. It is mandatory by law and is designed to maintain financial stability.
The MDIC is the maximum amount of money that the PDIC will insure per depositor of a closed bank. The amount has changed over time and currently stands at P500,000.
The PDIC insures both single accounts, which are held under one name, and joint accounts, which are held under more than one name.
