The House of Representatives’ committee on banks and financial intermediaries has approved a bill that shall empower the Philippine Deposit Insurance Corp. to increase the maximum deposit insurance coverage (MDIC).
The MDIC has stood at only up to P500,000 per depositor per bank for the last 12 years without any adjustment for inflation.
Makati City Rep. Luis Jose Angel Campos originally sought to double to P1 million the MDIC of the country’s 73.7 million bank depositors through House Bill 5812, which he filed in 2019.
Acting on the Campos bill, the House panel chaired by Quirino Rep. Junie Cua opted to authorize the PDIC’s governing board to increase the MDIC “to an amount indexed to inflation and other economic indicators, subject to review and/or adjustment every three years.”
“The committee’s proposal, as contained in substitute HB 8818, is even better because the PDIC will now be allowed not just to initially raise the MDIC, but also periodically thereafter,” Campos said.
“This relieves Congress of having to worry about adjusting upward the MDIC every now and then to account for the general increase in prices,” he added.
“We are confident that once empowered, the PDIC will promptly enlarge and restore the MDIC’s full value of protection, considering the erosion of the peso’s purchasing power over the years,” the solon
Through a series of acts of Congress, the MDIC, which stood at P40,000 in 1984, has been increased three times to P100,000 in 1992, P250,000 in 2004 and P500,000 in 2009.
Banks pay for the compulsory insurance premiums to guarantee the MDIC.
Under HB 8818, or the proposed Act Further Strengthening the Regulatory Framework for the PDIC, the state-run deposit insurer would become an attached agency of the Bangko Sentral ng Pilipinas.