The PDIC is a government instrumentality created in 1963 by virtue of Republic Act No. 3591 to insure the deposits of all banks. The PDIC exists to protect depositors by providing deposit insurance coverage for the depositing public and to help promote financial stability.

Consistent with its public policy objectives, the PDIC has the following roles:

I. Deposit Insurer. PDIC provides a maximum deposit insurance coverage of PhP500,000 per depositor per bank. To pay claims on insured deposits, PDIC builds up the Deposit Insurance Fund (DIF) primarily through assessments of banks at an annual flat rate of 1/5 of 1% of their total deposit liabilities.

II. Co-Regulator of Banks. PDIC works closely with the country's financial regulators such as the Bangko Sentral ng Pilipinas (BSP) to ensure the stability of the banking system. Jointly with the BSP, the PDIC conducts examination of banks. The PDIC also issues rules and regulations for compliance of banks to protect the deposit insurance system and the depositing public.

III. Receiver of Closed Banks. PDIC proceeds with the liquidation process upon order of the Monetary Board of the Bangko Sentral ng Pilipinas. The assets of closed banks are managed and eventually disposed of to settle claims of creditors in accordance with the preference and concurrence of credits as provided by the Civil Code of the Philippines.