PDIC Increases Maximum Deposit Insurance Coverage to Php 1 Million

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PDIC Increases Maximum Deposit Insurance Coverage to Php 1 Million

Submitted by 03946-2 on 27 March, 2025
PDIC Increases Maximum Deposit Insurance Coverage to Php 1 Million

The Philippine Deposit Insurance Corporation (PDIC) has announced an increase in the Maximum Deposit Insurance Coverage (MDIC). Starting March 15, 2025, the MDIC will rise from Five Hundred Thousand Pesos (Php 500,000) to One Million Pesos (Php 1,000,000) per depositor, per bank. This adjustment aims to enhance protection for all banking depositors.

With the higher deposit insurance coverage, you can grow your savings with greater confidence, knowing that your hard-earned money is well protected.

Frequently Asked Questions

Source: Philippine Deposit Insurance Corporation

1. What is deposit insurance?
Deposit insurance is a government policy and financial safety net designed to protect depositors and promote financial stability. It guarantees that depositors will receive their insured savings in the event of a bank failure. The PDIC provides this protection, ensuring public confidence in the banking system and preventing potential bank runs during financial crises.

2. What is MDIC?
MDIC stands for Maximum Deposit Insurance Coverage, which is the limit of deposit protection provided by PDIC per depositor, per bank. Starting March 15, 2025, deposits will be insured up to Php 1 million. This new MDIC applies prospectively, covering deposits in banks ordered closed on or after March 15, 2025. Deposits in banks closed before this date will still be insured up to Php 500,000.

3. How was the new MDIC determined?
The increase to Php 1 million was based on two key factors:

  • Inflation adjustments since the last increase in 2009

  • The ratio of MDIC to the gross domestic product (GDP) per capita of comparable economies

4. How does the new MDIC benefit depositors?
The higher MDIC provides depositors with greater confidence in the banking system, encouraging savings and reducing the likelihood of panic withdrawals during financial instability.

5. What authority does PDIC have to adjust the MDIC?
Under Republic Act No. 3591, as amended (PDIC Charter), the PDIC Board of Directors reviews and may increase the MDIC every three years, based on inflation and other economic indicators.

6. How will the increase in MDIC be funded?
The increase will be funded by the Deposit Insurance Fund (DIF), which is primarily sourced from member bank assessments, reserves for insurance losses, and retained earnings.

7. Do depositors need to pay for deposit insurance?
No. Depositors are automatically covered by deposit insurance at no cost. The insurance assessment is paid by banks, not by depositors.

8. What types of deposits are covered under the MDIC?
The deposit insurance system covers the following deposit accounts in banking institutions:

  • Savings / Special Savings Accounts

  • Demand / Checking Accounts

  • Negotiable Orders of Withdrawal (NOW)

  • Long-Term Negotiable Certificates of Deposit (LTNCD)

  • Time Deposits

  • Islamic Deposits (as defined in BSP Circular No. 1139, dated March 23, 2022)

9. What types of accounts are NOT covered by deposit insurance?
The following are excluded from coverage:

  • Investment products (e.g., bonds, securities, trust accounts)

  • Fictitious or fraudulent deposit accounts

  • Deposits arising from unsafe or unsound banking practices

  • Deposits linked to unlawful activities (as defined under the Anti-Money Laundering Law)

  • Deposits in non-bank entities such as cooperatives and non-stock savings and loan associations

10. Are foreign currency deposits covered?
Yes. Foreign currency deposits are covered under Republic Act No. 6426 and Central Bank Circular No. 1389. In the event of a bank closure, depositors may receive their insured deposits in the same currency.

For more information, please visit the PDIC website.