Frequently Asked Questions  

Source: Philippine Deposit Insurance Corporation 

1. What is deposit insurance? 
   Deposit insurance is a government policy and a financial safety net to protect depositors and help promote financial stability. It guarantees that depositors will receive their hard-earned savings in banks up to the maximum deposit insurance coverage (MDIC) if their bank fails. Deposit insurance, provided by the Philippine Deposit Insurance Corporation (PDIC), not only protects depositors but also prevents bank runs during financial crises, and helps maintain public confidence in the banking system. 
2. What is MDIC? 
   MDIC stands for Maximum Deposit Insurance Coverage. It refers to the limit of the deposit balance guaranteed for immediate reimbursement by PDIC to a depositor in the event of a bank closure. The MDIC is on a per depositor, per bank basis. Starting March 15, 2025, deposits will now be insured by the new MDIC of ₱1 million. This allows for more deposits to be protected. The new MDIC of ₱1 million will have a prospective application and will only apply to deposits maintained in banks ordered closed on March 15, 2025, and thereafter. As such, when a bank is closed prior to March 15, 2025, deposits will be covered up to ₱500,000 only. 
3. How was the new MDIC determined? 
   The new MDIC was determined based on two (2) primary considerations: 1) inflation and 2) ratio of MDIC to gross domestic product (GDP) per capita of comparable economies. The adjustment in the MDIC to ₱1 million was intended to update the extent of protection when the MDIC was last adjusted to ₱500,000 in 2009. 
4. How will the new MDIC of ₱1 Million benefit depositors of banks? 
   The MDIC benefits depositors by providing them with more confidence and peace of mind in saving their money in banks. With enhanced confidence, the possibility of panic withdrawals during financial crisis is lessened and public trust in the banking system is strengthened. 
5. What authority does the PDIC have to adjust the MDIC? 
   Republic Act No. 3591, as amended, or the PDIC Charter authorizes the PDIC Board of Directors to review the MDIC every three (3) years and increase the MDIC, as may be warranted, indexed to inflation or in consideration of other economic indicators. 
6. How will the PDIC fund the increase in the MDIC to ₱1 Million? 
   The MDIC increase will be funded by the Deposit Insurance Fund (DIF), the fund source for deposit insurance payouts in the event of a bank closure. The DIF is primarily funded by assessment from member banks as well as reserves for insurance and financial assistance losses and retained earnings. 
7. Do I need to pay my bank or PDIC for my deposits to be insured up to ₱1 Million? 
   No. Depositors do not need to pay their bank or the PDIC to be eligible for the MDIC. The insurance assessment is paid by the banks, not by the depositors. 
8. What types of deposits/bank products are covered by the MDIC? 
   The deposit insurance system only covers deposit products in banking institutions. The law provides that the MDIC of ₱1 million will cover the following types of deposit accounts: 
   • Savings / Special Savings 
   • Demand / Checking 
   • Negotiable Orders of Withdrawal (NOW) 
   • Long-Term Negotiable Certificate of Deposits (LTNCD) 
   • Time Deposits 
   • Islamic deposits as defined in BSP Circular No. 1139, dated 23 March 2022 
9. What are not covered by the deposit insurance? 
   The law provides that the following accounts or transactions are excluded for deposit insurance: 
   1. Other products of banks:
      • Investment products such as bonds, securities and trust accounts 
      • Deposit accounts or transactions which are fictitious or fraudulent 
      • Deposit products constituting or emanating from unsafe and unsound banking practices 
      • Deposits that are determined to be proceeds of an unlawful activity as defined under the Anti-Money Laundering Law
   2. Deposits in non-banks such as cooperatives and non-stock savings and loan associations 
10. Are deposits in foreign currencies also covered by the MDIC? 
    Yes. The PDIC covers foreign currency deposits as provided for by Republic Act No. 6426 (“An act instituting a foreign currency deposit system in the Philippines, and for other purposes”) and by Central Bank (CB) Circular No. 1389. In case of bank closure, depositors may receive deposit insurance payment in the same currency as their insured deposits. 

For more information, please visit the PDIC website (www.pdic.gov.ph).