House committee OKs bill raising deposit insurance

MANILA, Philippines — A proposed measure that seeks to double the current P500,000 Philippine Deposit Insurance Corp. insurance per bank deposit has been approved by the House Committee on Banks and Financial Intermediaries.

House Bill 8818 will increase the maximum deposit insurance coverage (MDIC) per depositor per bank to P1 million once it is passed by the House of Representatives and the Senate, and is signed into law by President Duterte.

Makati City Rep. Luis Campos Jr. said the bill would benefit the country’s 73.7 million bank depositors.

“This relieves Congress of having to worry about adjusting upward the MDIC every now and then to account for the general increase in prices,” said Campos, a committee member.

The committee opted to authorize the PDIC’s governing board to increase the MDIC “to an amount indexed to inflation and other economic indicators, subject to review and/or adjustment every three years.”

“We are confident that once empowered, the PDIC will promptly enlarge and restore the MDIC’s full value of protection, considering the erosion of the peso’s purchasing power over the years,” Campos said.

Through a series of acts of Congress, the MDIC, which stood at P40,000 in 1984, has been increased three times to P100,000 in 1992, P250,000 in 2004, and P500,000 in 2009.

Banks pay for the compulsory insurance premiums to guarantee the MDIC.

Under HB 8818, or the proposed Act Further Strengthening the Regulatory Framework for the PDIC, the state-run deposit insurer will become an attached agency of the Bangko Sentral ng Pilipinas.