Wake Up, Philippines!

Bank deposits insurance hiked

Posted in Banking, Consumer by Erineus on April 30, 2009
New PDIC law increases coverage to P500,000
April 29, 2009, 9:47pm

President Arroyo signed Wednesday the amendments to the charter of the Philippine Deposit Insurance Corp. (PDIC) to raise the insurance coverage of bank deposits from P250,000 to P500,000.

Mrs. Arroyo said the amendments to the PDIC charter are part of reforms designed to increase protection of bank deposits and consequently increase the confidence of the public in the banking system.

In October last year, Mrs. Arroyo approved a proposal to increase the deposit insurance coverage of bank deposits to deter mass withdrawals by depositors amid the global financial crisis.

The original proposal was to increase the maximum deposit insurance coverage from P250,000 to P1 million, but Congress trimmed the new maximum insurance coverage to P500,000.

Mrs. Arroyo led the ceremonial signing of the amendments to the PDIC charter at the sidelines of the Philippine Economic Zone Authority (PEZA) Investors’ Recognition Night at the World Trade Center (WTC) in Pasay City.

Among those who witnessed the signing ceremony were Finance Secretary Margarito Teves, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr., Trade Secretary Peter Favila, PDIC president Jose C. Nograles and the principal sponsors of the amendments Sen. Edgardo Angara and Manila Rep. Jaime Lopez.

The Department of Budget and Management (DBM) earlier said the additional capital requested by PDIC to cover for the increase in the maximum insurance coverage is available.

The Chief Executive said the new legislation is expected to will contribute much to a strong banking system, which is an important requisite if the nation is to weather the global recession.


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