The Philippine Deposit Insurance Corporation (PDIC) has officially expressed its support for Senate Bill No. 1667, a legislative proposal recently introduced by Senate President Vicente C. Sotto III. This bill seeks to amend Republic Act No. 3591, commonly known as the PDIC Charter, with the goal of bolstering the state deposit insurer's institutional capabilities. The proposed changes are designed to enhance the PDIC's ability to fulfill its core mandates of protecting depositors and promoting financial stability across the country.
Legislative Reforms for a Stronger Financial Safety Net
PDIC President and CEO Roberto B. Tan welcomed the Senate President's initiative, stating that the corporation appreciates the support for legislative reforms that would strengthen the nation's financial safety net. Tan emphasized that these measures are crucial for better safeguarding the depositing public, especially in an evolving economic landscape. With the higher maximum deposit insurance coverage (MDIC) of P1 million per depositor per bank already implemented since March 15, 2025, the proposed amendments aim to provide a legal foundation for a more responsive, resilient, and future-ready deposit insurance system. This framework would enable the PDIC to act swiftly and decisively during financial crises, ensuring minimal disruption to the banking sector.
Six-Point Legislative Agenda
The Senate Bill outlines a comprehensive six-point legislative agenda that includes several key provisions. First, it proposes expanded coverage to non-bank financial institutions (NBFIs) and cooperatives, which are currently supervised by the Bangko Sentral ng Pilipinas and the Cooperative Development Authority, respectively. This expansion is intended to close critical gaps in the financial safety net and ensure that more savers receive insurance protection. Second, the bill introduces higher insurance coverage for socially and economically critical accounts, such as retirement savings, payroll accounts, and settlement accounts. This differential coverage approach aims to minimize community and payment system disruptions in the event of bank closures.
Third, the amendments mandate faster settlement of deposit insurance claims to guarantee immediate access to funds when banks fail. To facilitate this, banks would be required to maintain comprehensive and accurate electronic deposit records. Additionally, the PDIC would be exempted from Bank Secrecy Laws to enable swift verification and payout of claims. Importantly, the proposal stipulates that only a Supreme Court-issued temporary restraining order or injunction could prohibit the payment of deposit insurance claims, ensuring depositors are not deprived of access to their funds during contested bank closures.
Fourth, the bill advocates for the exclusive use of the Deposit Insurance Fund (DIF) to support its operations. Fifth, it includes provisions for a crisis-driven temporary blanket guarantee to provide additional protection during financial emergencies. Sixth, the legislation calls for enhanced liquidation procedures for closed banks and institutional strengthening measures to improve the PDIC's overall effectiveness.
Implications for Financial Stability
These proposed reforms are seen as a significant step toward reinforcing the Philippines' financial infrastructure. By extending deposit insurance to NBFIs and cooperatives, the PDIC aims to create a more inclusive safety net that covers a broader range of financial entities. The focus on faster claims processing and higher protection for critical accounts is expected to enhance public confidence in the banking system, thereby contributing to long-term financial stability. As the bill moves through the legislative process, stakeholders will be closely monitoring its progress, recognizing its potential to shape the future of deposit insurance in the country.
