PDIC is a government instrumentality created in 1963 by virtue of Republic Act 3591 to insure the deposits of all banks which are entitled to the benefits of insurance. The latest amendments to RA 3591 are contained in RA 9576 signed into law on April 29, 2009. RA 9576 increased the maximum deposit insurance coverage to P500,000.00. The new law also includes important provisions to ensure that the PDIC remains financially and institutionally strong to fulfill its mandate under its Charter.

The PDIC now has the authority to determine which deposit products are covered by insurance. The PDIC is also authorized to conduct independent special examination of banks and may inquire into or examine deposit accounts of ailing banks in the event there is a finding of unsafe and unsound banking practices.

Part of the financial strengthening measures for the PDIC, on the other hand, include exemption from taxes and the authority to issue sovereign bonds, debentures and other debt issuances.

The PDIC is an attached agency of the Department of Finance.