What You Need to Know About Deposit Insurance

What You Need to Know About Deposit Insurance

Jul 05, 2017

Deposit insurance is a measure implemented by the government to protect depositors from losses caused by banks. In the event that a bank is not able to pay its depositor, the deposit insurance will cover it up to a certain amount. The premium for this insurance is not paid by the depositors but by the banks.

In the Philippines this agency is called PDIC, Philippine Deposit Insurance Corporation. Last June 22, 2017 it celebrated its 54th anniversary and I was invited to give a talk on how to raise children to be financially responsible. I took this opportunity to get to know the people in the agency, including their new president Mr. Roberto “Bobby Tan.” Watch out for my one-on-one interview with him at noontime today on FQ Mom page.

An Economics graduate from the Ateneo de Manila University, Bobby also took up masters and doctoral studies in Economics at the Fordham University. He has been in the Finance industry for decades now holding important posts such as Finance Undersecretary, World Bank Executive Director, and our National Treasurer, a post he held twice.

Here are ten things that you need to know about PDIC:

  1. PDIC has three main functions: a.) Deposit insurance; b.) Examination and resolution of banks; and Receivership and liquidation of closed banks.


  1. The maximum amount insured is PhP500,000.00 per depositor per bank. This is an aggregate amount such that if you have several accounts in a closed bank, including “or accounts” and foreign currency deposit accounts, the total coverage is limited to the equivalent of PhP500,000.00. This amount is already an increase from its previous level of PhP250,000.00 in 2009. The maximum coverage is deemed sufficient because 96.5% of all accounts in our system are well within the half million limit.


  1. For account holders with a total deposit amount of not more than P100,000.00, there is an automatic payment by mail. PDIC sends the check to you by mail, in cooperation with the Philippine Postal Office. For account holders of more than PhP100,000.00, the procedure for claiming is disseminated through PDIC’s central and field offices. The agency tries to pay the depositors within two weeks.
  1. The second function of PDIC, which is the examination and resolution of banks to assess financial soundness, is a supplementary supervision conducted with the Bangko Sentral ng Pilipinas (BSP). The two agencies do a team approach in order to minimize disruptions in bank operations.
  1. Bobby Tan warns that depositors should be careful with very high interest rates being offered to them. His Head of Corporate Affairs Group, Jun Villaret, volunteered, “If it’s too good to be true, it is not true!” One may call the PDIC Assistance Center or even the BSP Customer Assistance to report or ask about such deposit/insurance instruments being offered to them.


  1. The third function of PDIC is receivership and liquidation of closed banks. This is the process where PDIC takes control over the bank, gathers all assets and converts them to cash for the benefit of creditors.
  1. Banks closed by the Monetary Board can no longer be re-opened or rehabilitated. This is to avoid disastrous events such as the “close-open-close-open Banco Filipino.” (I asked about how we can bar the proponents of similar bank frauds from entering the financial system again. He answers this in our FQ-wentuhan which will be published this noon.)
  1. PDIC is also involved in various financial literacy programs. You may request the agency to conduct one for your group and they offer the programs for free.
  1. PDIC is in close coordination with other agencies such as the Insurance Commission (IC), Government Service Insurance System (GSIS), Social Security System (SSS), and, as earlier mentioned, BSP. They work together in the financial stability and financial inclusion programs.
  1. The PDIC President has his own childhood money memory that has affected how he handles his (and our) money for that matter. J Find out about it together with his FQ-ripot tips this noon on FQ Mom FB page.

I hope the above will help you forge into your happy FQ journey! For more information on the the agency, you may visit http://www.pdic.gov.ph.

Cheers to High FQ! wallet-icon



  1. Go to FQ Mom FB page to watch FQ-wentuhan with the PDIC President today at noon. kwentuhan-bobby
  1. My son Martin and I will speak at the Investors Forum of SLAMCI (Sun Life Asset Management Company, Inc.) on July 18, 2017. slamci-poster
  1. Want to know your FQ Score. Take it today. Click link to take the test. fq-test

Rose Fres Fausto is a speaker and author of bestselling books Raising Pinoy Boys and The Retelling of The Richest Man in Babylon (English and Filipino versions). Click this link to read samples – Books of FQ Mom Rose Fres Fausto. She is a Behavioral Economist, Certified Gallup Strengths Coach and the grand prize winner of the first Sinag Financial Literacy Digital Journalism Awards. Follow her on Facebook and You Tube as FQ Mom, and Twitter & Instagram as theFQMom.

ATTRIBUTIONS: Images from AN, Clipart Download, Clker, Complete Colorado, Consumer Affairs, Dr. Odd, Lion Trust Property, LiteForex, Live in the Philippines, pinterest.com, Shutterstock, StreetSaw and PDIC official website put together to help deliver the message.