Solon urges hike in bank deposit coverage

Senate Minority Leader Renato Cayetano (Lakas) has urged the new Congress to pass a bill seeking to enlarge the insurance coverage of bank deposits, saying the measure has become imperative to protect depositors amid the lingering financial crisis.

"We must promptly increase the insurance coverage of deposits in order to restore public confidence in the banking system and revitalize the national savings mobilization effort at this difficult time," Cayetano pointed out.

Cayetano’s call came shortly after the Philippine Deposit Insurance Corp. (PDIC) released a report showing that 53,869 account holders with a total of P2.2-billion worth of deposits were disenfranchised by the downfall of 16 banks last year.

The figures do not include thousands of depositors in eight other collapsed banks whose deposit accounts have yet to be inventoried.

Cayetano authored a bill seeking to increase the insurance coverage of bank deposits to higher range of P100,000 to P175,000.

Under the bill, the insurance coverage would be 100 percent of the amount deposited if it is less than P100,000.

For deposits of P100,000 or more but less than P250,000, the coverage would be increased to 75 percent of the amount deposited, provided the account would receive no less than P100,000.

For deposits of P250,000 or more, the coverage would be expanded to 50 percent of the deposit, provided the account holder would no less than P175,000.

At present, each deposit account – regardless of the amount – is insured up to P100,000.

Cayetano also wants the deposit insurance paid within 60 days from the closure of a bank.