State deposit insurer Philippine Deposit Insurance Corporation (PDIC) announced on Friday, Feb. 28, that it will raise its insurance coverage for bank deposits, increasing the protection for depositors’ savings.

As per the insurer’s first memorandum this year, released on Friday, Feb. 28, the maximum deposit insurance coverage (MDIC) provided by the PDIC will be increased from ₱500,000 previously to ₱1 million per depositor per bank, effective on March 15, over two weeks as of writing.

According to the PDIC, the maximum coverage hike was approved by its board of directors “to provide enhanced protection and more confidence for the depositing public.”

As clarified, the PDIC will not charge banks higher fees for deposit insurance despite the increase.

With the new ₱1 million MDIC, 98.6 percent of deposit accounts—or 136 million—will be fully insured, increasing from 97.6 percent under the ₱500,000 limit.

Total insured deposits will rise to ₱4.8 trillion, covering 24.5 percent of all deposits, compared to 18.3 percent previously.

The PDIC said the upward adjustment in the MDIC is “a proactive measure to reinforce confidence in the Philippine banking system and contribute to financial stability.”

It explained that the increased MDIC “will not only protect and secure more depositors’ savings,” but it will likewise help keep banks stable by preventing sudden withdrawals due to panic, which could ensure banks have enough cash to operate smoothly.

“While the adjustment in the MDIC has increased the estimated insured deposits in the banking system, the Deposit Insurance Fund (DIF) of the PDIC remains adequate to meet the potential insurance risks that may arise,” it assured the public.

For 2025, the PDIC expects the DIF-to-insured deposits ratio to clock in at 5.3 percent and gradually increase to the eight-percent target by 2031, “aligning with international best practices.”

Under the PDIC’s amended charter, it has the authority to adjust the MDIC based on inflation trends or other economic indicators.

The MDIC is reviewed every three years, with the last increase in 2009, when it doubled from ₱250,000 to ₱500,000 under a previous amendment to the PDIC charter.

Deposit insurance is a government policy that protects depositors and supports financial stability at no cost to account holders.