PDIC to review deposit insurance cap every 3 years

March 15, 2025 | 12:00am

MANILA, Philippines — The Philippine Deposit Insurance Corp. (PDIC) will review the maximum deposit insurance coverage (MDIC) every three years, with the next evaluation set for 2028, making adjustments possible if warranted by economic conditions.

In a press conference, PDIC general counsel Maria Antonette Brillantes-Bolivar said the regular review process ensures deposit insurance coverage remains adequate and responsive to financial shifts.

“The review that’s required is every three years, and if an adjustment is warranted, then the adjustment will happen in the third year,” she said.

“It’s possible (for an adjustment every three years), especially now that the authority is delegated to the PDIC board. But only if warranted as a result of the review,” she added.

While PDIC will regularly monitor deposit insurance levels, Bolivar clarified that adjustments would not necessarily be automatic every three years.

The shift marks a departure from past practices, where deposit insurance adjustments were infrequent and required congressional approval. The last increase in 2009 raised the MDIC to P500,000 from P250,000.

Last month, the PDIC doubled the MDIC to P1 million from P500,000. The change will take effect today.

PDIC vice president Jose Villaret Jr. said the adjustment was long overdue and had been under study for years.

While there were proposals for an increase earlier, it was the 2022 review of the PDIC charter that ultimately paved the way for the adjustment.

He said that the need for an increase was evident given that the real value of P500,000 has significantly declined over the years and the average deposit size has increased.

PDIC president and CEO Roberto Tan said the delay in increasing the MDIC was largely due to the previous requirement for congressional approval, making it difficult to make the necessary adjustments.

“You can just imagine how difficult it was to increase deposit insurance before. Now, with the charter changes, the PDIC board has the authority to approve adjustments, making the system more responsive,” Tan said.

The PDIC projects that with the increase in MDIC, around 147 million accounts  or 98.6 percent of total accounts will now be fully insured. This will cover P5.3 trillion or 24.1 percent of total deposits.

In contrast, under the P500,000 coverage, fully insured accounts made up 97.6 percent of all accounts as of December 2024. The insured amount stood at P3.73 trillion, or 18.4 percent of total deposits.

Tan also assured the public that the Deposit Insurance Fund (DIF) remains sufficient to cover the increased insurance, backed by sound financial management and government support.

The DIF stood at P236.95 billion as of December last year. The ratio of the DIF to estimated insured deposits is expected to reach five percent in 2025, which remains adequate to meet any potential risks.

“The regular review process ensures deposit insurance coverage remains adequate and responsive to financial shifts.”