Senator Sonny Angara is pushing for the measure seeking to increase the deposit insurance coverage provided for by the Philippine Deposit Insurance Corp. (PDIC).
(Alexis Nueva España / Senate PRIB / FILE PHOTO)
With more Filipinos now putting their money in banks, Angara said the deposit insurance coverage should be increased from P500,000 to P1 million per depositor.
The Senate Committee on Finance chief said it is necessary to introduce such changes in the PDIC’s charter in order to make it more attuned to the constantly changing financial landscape in the country.
“It is encouraging to note that more and more Filipinos are now saving money by depositing these in our banks,” Angara said in pushing for Senate Bill No. 2089 which seeks to amend certain sections of the PDIC Charter.
“In order to further boost their confidence in the banking system, especially during these very challenging times, we are proposing to increase by 100 percent the deposit insurance coverage,” the senator said.
Citing data from the PDIC as of September 30, 2020, Angara said 96.7 percent or 76.1 million of the 78.7 million total deposit accounts maintained in 537 banks nationwide are now fully insured.
This shows an increase of 11.8 percent from the 68.1 million recorded over the same period in 2019.
PDIC also reported a double-digit growth of 11.7 percent in the number of total deposit accounts in banks nationwide, as total deposit amount posted a 9.5 percent growth year-on-year from P13.1-trillion to P14.3-trillion.
“It is encouraging to note that more and more Filipinos are now saving money by depositing these in our banks. In order to further boost their confidence in the banking system, especially during these very challenging times, we are proposing to increase by 100 percent the deposit insurance coverage,” Angara said.
Under the bill, the maximum deposit insurance coverage is subject to review by the PDIC Board of Directors every three years and may be increased to an amount indexed to inflation or other economic indicators as may be deemed appropriate by the Board.
To avoid an overlap in functions between the PDIC and the Bangko Sentral ng Pilipinas (BSP), as the regulator of the country’s banking system, the bill will modify certain powers of the state deposit insurer.
In particular, the bill seeks to integrate the powers of the PDIC on bank resolution, including the grant of consent to mergers and acquisitions, and the issuance of cease and desist orders pertaining to deposit-related unsafe and/or unsound banking with the BSP.
The bill also seeks to make the PDIC an attached corporation of the Department of Finance (DOF) to the BSP.
To ensure that the compensation scheme of PDIC is aligned with the other government owned and controlled corporations (GOCCs) and government institutions, the bill also seeks to remove the exemption from the salary standardization laws (SSL) that was granted to the corporation.
“There is so much uncertainty in the lives of almost all Filipinos at this time and keeping their savings secured is all the more important to them,” Angara said.
“We want to reinforce the people’s trust in the banking system with this measure and further strengthen the mandate of PDIC, not only as the insurer of deposits but as liquidator of troubled banks,” he stressed.