The House Committee on Banks and Financial Intermediaries has recommended passage of a measure granting the Philippine Deposit Insurance Corporation the power to increase the maximum deposit insurance coverage (MDIC) that currently stands at P500,000.
House Bill 8818 proposes to strengthen PDIC’s regulatory framework and provide for measures to promote and safeguard the interests of depositor. The bill places the PDIC under the Bangko Sentral ng Pilipinas as an attached agency.
The bill will amend Republic Act 3591, otherwise known as the PDIC Charter.
It consolidates two legislative proposals filed by Reps. Junie E. Cua of Quirino Province and Luis Jose Angel N. Campos Jr. of Makati City.
Cua, chairman of the banks and financial intermediaries panel, said the bill empowers the PDIC to issue rules and establish separate insurance funds and insurance arrangements, taking into consideration the peculiar characterteristics of Islamic banking and other deposit products.
In granting the PDIC authority to increase the MDIC, the bill stresses that the amount to be approved should be indexed to inflation or other econommic indicators.
The approved MDIC will will be subject to review or adjustment every three years.
Campos said increase in MDIC will no longer be submitted for congressional action once the measure is passed.
He recalled that in 1984, Congress set the MDIC at P40,000. It was then increased to P100,000 in 1992; P250,000 in 2004 and P500,000 in 2009.
Meanwhile, the proposed measure also designates PDIC as statutory receiver of BSP-supervised non-bank institutions with deposits or products covered by deposit insurance.
Cua said HB 8818 also removes from the PDIC the power to issue cease-and-desist orders pertaining to deposit-related unsafe and unsound banking. This power is solely vested on the BSP.