BUSINESS
Advocates Philippines
Big Win For Depositors! PDIC Doubles Deposit Insurance To P1M Starting March 2025
Photo credit: PDIC
Good news for Filipino bank depositors. Starting March 15, 2025, the Philippine Deposit Insurance Corporation (PDIC) will double the Maximum Deposit Insurance Coverage (MDIC) from P500,000 to P1 million per depositor, per bank. That means more of your hard-earned savings will be protected in case something goes wrong with your bank.
What This Means for You
With the higher coverage, 98.6% of all deposit accounts in the country—equivalent to 136 million accounts—will now be fully insured, up from 97.6% under the previous limit. This move not only safeguards more depositors but also helps keep the banking system stable, prevent panic withdrawals, and maintain liquidity.
No Extra Costs for Banks
Despite the increase in coverage, the PDIC will not raise the assessment fees charged to banks. This ensures that banks won’t pass on additional costs to depositors in the form of higher fees or lower interest rates.
Why the Increase?
The last time PDIC adjusted the MDIC was in 2009, when it was raised to P500,000 following the 2008 global financial crisis. Since then, inflation has eroded the real value of that coverage. The decision to double the MDIC follows a World Bank-recommended methodology to keep deposit insurance aligned with economic conditions.
Will PDIC Have Enough Funds to Cover This?
The PDIC’s Deposit Insurance Fund (DIF) remains adequate to cover potential risks. Even with the higher insurance coverage, the DIF is projected to reach a ratio of 5.3% in 2025 and increase to 8.0% by 2031, aligning with global best practices.
A Brief History of MDIC Increases
The MDIC has been raised five times before:
• 1963 – P10,000
• 1978 – P15,000
• 1984 – P40,000
• 1992 – P100,000
• 2004 – P250,000
• 2009 – P500,000
Now, after 16 years at P500,000, it's finally being doubled to P1 million.
Final Thoughts
This move is a huge win for depositors, giving them more peace of mind that their savings are protected. It also reinforces confidence in the Philippine banking system, ensuring financial stability for everyone. So, whether you have a small savings account or a bigger deposit, this change is definitely in your favor.
What This Means for You
With the higher coverage, 98.6% of all deposit accounts in the country—equivalent to 136 million accounts—will now be fully insured, up from 97.6% under the previous limit. This move not only safeguards more depositors but also helps keep the banking system stable, prevent panic withdrawals, and maintain liquidity.
No Extra Costs for Banks
Despite the increase in coverage, the PDIC will not raise the assessment fees charged to banks. This ensures that banks won’t pass on additional costs to depositors in the form of higher fees or lower interest rates.
Why the Increase?
The last time PDIC adjusted the MDIC was in 2009, when it was raised to P500,000 following the 2008 global financial crisis. Since then, inflation has eroded the real value of that coverage. The decision to double the MDIC follows a World Bank-recommended methodology to keep deposit insurance aligned with economic conditions.
Will PDIC Have Enough Funds to Cover This?
The PDIC’s Deposit Insurance Fund (DIF) remains adequate to cover potential risks. Even with the higher insurance coverage, the DIF is projected to reach a ratio of 5.3% in 2025 and increase to 8.0% by 2031, aligning with global best practices.
A Brief History of MDIC Increases
The MDIC has been raised five times before:
• 1963 – P10,000
• 1978 – P15,000
• 1984 – P40,000
• 1992 – P100,000
• 2004 – P250,000
• 2009 – P500,000
Now, after 16 years at P500,000, it's finally being doubled to P1 million.
Final Thoughts
This move is a huge win for depositors, giving them more peace of mind that their savings are protected. It also reinforces confidence in the Philippine banking system, ensuring financial stability for everyone. So, whether you have a small savings account or a bigger deposit, this change is definitely in your favor.
Feb 28, 2025
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