A member of the House Committee on Banks and Financial Intermediaries has filed a bill proposing to double the maximum insurance protection of the country’s 63 million bank depositors.
In House Bill 5812, Makati City Rep. Luis Campos Jr. proposed to increase the maximum deposit insurance coverage (MDIC) from P500,000 to P1 million per-depositor per bank.
According to the state-run Philippine Deposit Insurance Corp., since 2017 alone, tens of thousands of depositors have been affected by the collapse or closure of 41 banks, mostly rural lenders. The bill seeks to amend the PDIC charter.
“We have to restore the full value of protection of the MDIC at today’s prices, if we want to encourage Filipinos to continue to keep their money in banks,” Campos said in a statement.
He said the MDIC’s “full value of protection” has been eroded considerably by the general increase in prices over the last 10 years.
The MDIC was initially fixed at P10,000 in 1963; and then increased to P15,000 in 1978; P40,000 in 1984; P100,000 in 1992; P250,000 in 2004; and P500,000 in 2009.
According to Campos, banks pay for the compulsory insurance premiums that guarantee the MDIC.
The lawmaker, citing PDIC, said the Philippine banking system had P12.745 trillion in total deposits as of December 31, 2018, up 8.8 percent from P11.710 trillion the previous year.
“The deposits were spread over 62.9 million accounts in 2018, up 10.1 percent from 57.1 million accounts the year before,” he added.
Campos cited the growing number of Filipino middle-class families, including those with breadwinners abroad, that now have more than P1 million in liquid assets that may be held in banks.
“We are positive that our bill, once enacted, will also help reinforce public confidence in the banking system that plays an indispensable role in driving national economic growth,” Campos said.