The Philippine Deposit Insurance Corporation (PDIC) is a government instrumentality created on 22 June 1963 by Republic Act 3591 entitled, An Act Establishing the Philippine Deposit Insurance Corporation (PDIC), Defining Its Powers and Duties and for Other Purposes.
Public Policy Objectives
PDIC was established to promote and safeguard the interests of the depositing public by way of providing insurance coverage on all insured deposits. PDIC also aims to strengthen the mandatory deposit insurance coverage system to generate, preserve, and maintain faith and confidence in the country's banking system, and protect it from illegal schemes and machinations.Mandates
Consistent with its public policy objectives, the PDIC has the following mandates:
- Deposit Insurance. 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.
Receivership of Closed Banks.
PDIC proceeds with the liquidation process upon order of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP). The assets of the closed bank 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.
Membership with PDIC is mandatory for all banks licensed by the BSP to operate in the Philippines:
- Banks incorporated under Philippine laws, such as commercial banks, savings banks, mortgage banks, stock savings and loan associations, development banks, cooperative banks, and rural banks
Domestic branches of foreign banks
As of 31 December 2020, there are 535 banks in the Philippine banking system. These consist of 46 commercial banks (including branches of foreign banks), 48 thrift banks (savings banks, mortgage banks, stock savings and loan associations, and development banks), and 441 rural banks (including cooperative banks).
Scope of Deposit Insurance Protection
PDIC provides a maximum deposit insurance coverage of PhP500,000 per depositor per bank. It covers all types of bank deposits in banks whether denominated in local or foreign currencies. All deposit accounts of a depositor in a closed bank maintained in the same right and capacity shall be added together. A joint account shall be insured separately from any individually-owned deposit account.
As of 31 December 2020, around 80.1 million accounts in 535 banks are covered by deposit insurance. Of the total number of accounts, 96.7% are with balances not exceeding the maximum deposit insurance coverage of PhP500,000 per depositor per bank. For the same period, total deposits in the Philippine banking system amounted to PhP14.87 trillion, of which 20.6% is covered by deposit insurance.