State-run Philippine Deposit Insurance Corp. said Friday it will raise the maximum deposit insurance coverage to P1 million.
“Effective March 15, 2025, the maximum deposit insurance coverage for deposits in banks will be doubled from P500,000 to P1 million per depositor, per bank,” the PDIC said in a statement.
PDIC said despite the increase, it would not raise the assessment levied on banks.
PDIC said its board of directors approved the increase to provide enhanced protection to depositors and reinforce confidence in the Philippine banking system and contribute to financial stability.
The higher coverage will protect more depositors’ savings, stabilize deposit movements, maintain liquidity and prevent panic-based runs, it said.
“At the new P1 million coverage, more deposits will be fully insured, covering 136 million deposit accounts, or 98.6 percent of the total 138 million deposit accounts, compared with 97.6 percent at the P500,000 coverage, based on data as of Sept. 30, 2024,” it said.
PDIC said that in terms of amount, insured deposits would increase to P4.8 trillion, or 24.5 percent of total deposits of P19.5 trillion, compared with 18.3 percent at the P500,000 coverage.
While the increase has raised the estimated insured deposits, the Deposit Insurance Fund remains adequate to meet potential insurance risks, it said.
The ratio of the fund to estimated insured deposits is expected to reach 5.3 percent in 2025 and grow to meet the new target ratio of 8.0 percent by 2031.
PDIC said its board, under Republic Act 3591, as amended, is authorized to adjust the coverage to an amount indexed to inflation or in consideration of other economic indicators.
The decision to double the coverage was based on a World Bank methodology to restore the value of the coverage set in 2009, which has been diminished by inflation, it said.
The coverage was last adjusted in 2009 to P500,000 as a response to the 2008 global financial crisis, remaining at that level for 16 years.
The coverage was set at P10,000 pesos per depositor per bank in 1963 and has since been adjusted five times: P15,000 in 1978, P40,000 in 1984, P100,000 in 1992, P250,000 in 2004 and P500,000 in 2009.
PDIC was established June 22, 1963, by Republic Act 3591 to protect depositors and help maintain stability in the financial system. It is an attached agency of the Bangko Sentral ng Pilipinas and a member of the Financial Sector Forum, the Financial Stability Coordination Council and the Financial Inclusion Steering Committee.