The Philippine Deposit Insurance Corporation (PDIC) supports Senate Bill No. 1667, which was recently filed by Senate President Vicente C. Sotto III. Said Bill seeks to amend Republic Act No. 3591, or the PDIC Charter, to strengthen the state deposit insurer’s institutional capacities to fulfill its mandates of depositor protection and promotion of financial stability.
“The PDIC welcomes the support of the Senate President in championing legislative reforms that would strengthen the country’s financial safety net and better protect the depositing public,” said PDIC President and CEO Roberto B. Tan.
With the higher maximum deposit insurance coverage (MDIC) at P1 million per depositor per bank already in effect as of March 15, 2025, the proposed measures will serve as the legal backbone for a more responsive, resilient, and future-ready deposit insurance system, and enable the PDIC to respond swiftly and decisively during crises.
The Bill contains the following six-point legislative agenda: expanded coverage to non-bank financial institutions (NBFIs) and cooperatives, higher insurance coverage protection for socially and economically critical accounts, faster settlement of deposit insurance claims, exclusive use of the Deposit Insurance Fund (DIF), crisis-driven temporary blanket guarantee, and enhanced liquidation of closed banks and institutional strengthening.
Expanded Coverage Beyond Banks
The PDIC is seeking to extend deposit insurance to deposits offered by NBFIs supervised by the Bangko Sentral ng Pilipinas as well as cooperatives under the supervision of the Cooperative Development Authority. The proposed expansion closes critical gaps and ensures more savers are provided with insurance coverage.
Higher Protection for Accounts with High Social and Economic Value
The reforms also introduce the authority to adopt differential coverage, allowing insurance limits above the MDIC for accounts with high social or economic value such as retirement savings, payroll accounts and settlement accounts. This is seen to minimize the disruption in the community and the payment system in the event of bank closures.
Faster Settlement of Deposit Insurance Claims
To guarantee immediate access to funds when banks fail, the amendments mandate the prompt payment of deposit insurance. Under this proposed measure, banks will be required to maintain comprehensive, accurate electronic deposit records, and the PDIC will be exempted from Bank Secrecy Laws to enable swift verification and payout. More importantly, in order that depositors will not be deprived access to their deposits in contested bank closures, under the proposal, only a Supreme Court-issued temporary restraining order or injunction could prohibit the payment of deposit insurance claims.
Exclusive Use of the Deposit Insurance Fund
The proposed measure ringfences the DIF for payment of deposit insurance claims and grant of financial assistance to distressed banks. This is seen to ensure that the DIF is preserved and deployed exclusively for the purpose for which it was established.
Crisis-driven temporary blanket guarantee
To prevent panic and preserve depositor confidence during periods of crises, the PDIC is likewise seeking authority to implement temporary full deposit insurance coverage, upon determination by the Monetary Board of the BSP of the existence of a systemic crisis that threatens financial stability. This measure aims to sustain public confidence and deter destabilizing bank runs.
Enhanced Liquidation and Institutional Strengthening
The reform agenda also seeks to streamline bank liquidation processes to enable faster recovery for closed bank creditors. In parallel, the institutional strengthening measures will bolster the PDIC’s governance, operational capacity, and workforce that can ensure that the Corporation can effectively execute its expanded mandate.
“These proposed measures are critical to strengthening depositor protection and reinforcing public confidence in the stability of the financial system. These will ensure our deposit insurance system is responsive to changing times and the Deposit Insurer has the much-needed tools and authorities that can be deployed during periods of crisis,” PDIC President and CEO Tan said.
The PDIC emphasized its commitment to closely collaborate with legislators, financial regulators, and industry stakeholders in pushing for the passage of the Bill. Once enacted, the six-point legislative agenda is expected to markedly enhance depositor confidence, further strengthen the banking system and help promote the stability of the country’s financial system.
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