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.Consistent with its public policy objectives, the PDIC has the following roles:
- 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.
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.
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 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 2021, there are 506 banks in the Philippine banking system. These consist of 46 commercial banks (including universal banks and branches of foreign banks), 47 thrift banks (savings banks, mortgage banks, stock savings and loan associations, and development banks), and 413 rural banks (including cooperative banks).
SCOPE OF DEPOSIT INSURANCE PROTECTION
The PDIC provides a maximum deposit insurance coverage of PhP500,000 per depositor per bank. It covers all types of bank deposits in banks. For insurance purposes, all deposit accounts of a depositor in a closed bank maintained in the same right and capacity shall be added together. Joint accounts shall be insured separately from any individually-owned deposit accounts.
As of 31 December 2021, 87.1 million accounts in 506 banks are covered by deposit insurance. Of this total number of accounts, 96.8 percent are with balances not exceeding the maximum deposit insurance coverage. For the same period, total deposits in the Philippine banking system amounted to PhP16.2 trillion, of which 19.5 percent is covered by deposit insurance.