SENATORS are mulling passage of remedial legislation raising the maximum deposit insurance coverage from P500,000 to P1,000,000.
In filing Senate Bill (SB) 1260, Sen. Ramon Revilla said the proposal to amend the insurance coverage to attract more bank depositors is expected to “boost the financial system, as well as the economy.”
Revilla aired confidence its early enactment “will help invite the public to deposit their money in banks and encourage the existing bank clients to increase their deposits.”
“Apart from the benefits that individual depositors will enjoy, it will also redound to advantages in the macro level by invigorating our financial system and the economy as a whole,” the Senator said in a statement over the weekend.
Revilla’s SB 1260, also known as “An Act Further Increasing the Maximum Deposit Insurance Coverage, Amending For This Purpose Republic Act 3591, As Amended, Otherwise Known As The Philippine Deposit Insurance Corp. (PDIC) Charter,” will increase the present P500,000 maximum insured deposits on joint accounts to P1 million.
He noted that under existing laws, joint account shall be insured separately from any individually-owned deposit account.
The PDIC, an attached agency
of the Department of Finance (DOF), is mandated to insure the deposits of all
banks to protect the depositing
public from illegal schemes and promote financial stability.
Revilla recalled that a 2019 PDIC and Kantar Philippines Inc. survey showed that 51 percent of 1,500 respondents, aged 18 and above, had experienced maintaining deposits in banks but only half of them, or 24.5 percent, continued to maintain bank deposits.
At the outset, he assured that the proposed legislation is “in line with the policy of the State to strengthen the deposit insurance coverage system and encourage the public to save and deposit in the formal banking system.”
In a statement, the Senator cited a 2015 Bangko Sentral ng Pilipinas (BSP) data showing four out of 10 Filipino adults or 43 percent had savings, 32.3 percent used to save in the past but stopped saving money while 24.5 percent never experienced saving money.
The same data, he added, showed seven out of 10 adults or 68 percent who saved money kept their savings at home while 32.7 percent of adults with savings placed their money in banks while others saved through cooperatives (7.5 percent), non-stock savings and loans associations (0.8 percent) and informal savings groups (2.6 percent).
Moreover, Revilla adds BSP record showing six out of the 10 adults or 62.8 percent with bank account indicated that the bank’s reputation is their number one consideration in opening a deposit account, recalling a 2017 survey showed the percentage of adults with savings increased to 48 percent from 43 percent in 2015.