Updated: April 13, 2021
When a bank closes, your money is not permanently lost. You can get all (or some) of it back, thanks to the Philippine Deposit Insurance Corporation or PDIC.
Below are some basic information that are important for you to know and understand regarding PDIC.
What is the Philippine Deposit Insurance Corporation (PDIC)?
The Philippine Deposit Insurance Corporation (PDIC) was established on June 22, 1963 by Republic Act 3591. Under its Charter, the corporation is mandated to give bank depositors protection and financial stability by providing permanent and continuing deposit insurance.
What does the PDIC do?
The Philippine Deposit Insurance Corporation has three basic functions. First, they are the deposit insurer. Second, they act as co-regulator of banks. And third, they are the receiver and liquidator of closed banks.
What is maximum deposit insurance coverage of PDIC?
Since June 2009, the Maximum Deposit Insurance Coverage or MDIC is P500,000 per depositor per bank. Simply, this means if a bank closes, then you can get up to P500,000 back from the PDIC.
If you had P100,000 in a savings account upon the time the bank closed, then you’ll get all of the P100,000 back from the PDIC. However, if you had P700,000 in the account, then you’ll only get the MDIC or P500,000 back.
What are covered by the PDIC Deposit Insurance?
PDIC insures valid deposits in domestic offices of its member-banks. Deposits are considered valid if, upon determination by PDIC, are recorded in the bank’s records, and are evidenced by inflow of cash.
By Deposit Types:
- Special Savings
- Demand / Checking
- Negotiable Order of Withdrawal (NOW)
- Time Deposits
By Deposit Account:
- Single Account
- Joint Account
- Account “By”, “In Trust For” (ITF), and “For the Account of” (FAO)
- Philippine Peso
- Foreign currencies considered as part of BSP’s international reserves
Which banks are members of the PDIC?
All operating banks are members of the PDIC. It is mandatory. So this includes commercial banks, savings banks, mortgage banks, development banks, rural banks, and cooperative banks. In addition, stock savings and loan associations are also included; as well as domestic branches of foreign banks.
What specific risks to a bank does PDIC cover?
The Philippine Deposit Insurance Corporation covers only the risk of a bank closure ordered by the Monetary Board. Thus, bank losses due to theft, fire, closure by reason of strike or existence of public disorder, revolution or civil war, are not covered by PDIC.
Do you need to any insurance premium to the PDIC to be covered?
No. The insurance premium is paid by the banks, not by the depositors.
What is NOT covered by the PDIC Deposit Insurance?
Republic Act No. 9576 stipulates that PDIC will not pay deposit insurance for the following accounts or transactions:
- Investment products such as bonds, securities and trust accounts.
- Deposit accounts which are unfunded, 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.
What is my PDIC deposit insurance coverage if I have several types of accounts in a bank?
Your PDIC insurance coverage will not increase and will be up to P500,000 in total. The deposit insurance coverage is not determined on a per-account basis. The type of account (whether checking, savings, time or other form of deposit) has no bearing on the amount of insurance coverage.
Let’s say that you have P1M in a savings account in Bank Alpha, and another P1M in a checking account also in Bank Alpha. If Bank Alpha closes, you’ll only get a total of P500,000 from PDIC.
If I have deposits in different banks, what is my PDIC deposit insurance coverage?
It will be up to P500,000 per bank. Deposits in different banking institutions are insured separately. However, if a bank has one or more branches, the main office and all branch offices are considered as one bank.
Thus, if you have deposits at the main office and at one or more branch offices of the same bank, the deposits are added together when determining deposit insurance coverage, the total of which shall not exceed P500,000.
How can I claim PDIC deposit insurance if my bank closes?
Depositors will be advised through media and posters at the premises of the closed bank on the schedule of distribution of claim forms by PDIC, receiving of claim forms by PDIC, and the prescriptive date of filing claims by the depositors.
The depositor must then file his deposit insurance claim within 24 months from date of bank takeover. Failing to do so will forfeit their right to get the insured amount from the PDIC. However, they may still make a claim against the assets of the closed bank.
So if I have more than P500,000 in a deposit account, the excess is lost if the bank closes?
Not necessarily. The uninsured portion of the deposit can be claimed against the assets of the closed bank.
The claim may be filed with the Liquidator of the closed bank within sixty (60) days from publication of notice of closure. However, payment of said claim will depend on the bank’s available assets and approval of the Liquidation Court.
The schedule of payment beyond the P500,000.00 maximum insurance shall be based on priorities set by law.
How long does it take PDIC to settle a claim for insured deposit?
The PDIC aims to pay valid claims as soon as possible. Prior to payout, claims are examined thoroughly. This is to protect the Deposit Insurance Fund (DIF) which is the source of insurance payments.
Sometimes, depositors mistakenly assume that the payouts are sourced from their deposits. This is not the case. The payouts are from PDIC’s own funds.
The claim for insured deposit should be settled within six (6) months from the date of filing provided all requirements are met but the claim must be filed within twenty-four (24) months after bank takeover.
The six-month period shall not apply if the documents of the claimant are incomplete or if the validity of the claim requires the resolution of issues of facts and law by another office, body or agency, independently or in coordination with PDIC.
How do I contact the PDIC office?
Do you have questions? Want clarifications on some points? Share them below in the comments section and I’ll answer and explain it further.
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