The Philippine Deposit Insurance Corp. (PDIC), the state agency that guarantees bank deposits up to a statutory ceiling, is advancing a legislative agenda aimed at enhancing consumer protection and reinforcing the stability of the country's financial system.

At a briefing on Wednesday, PDIC President and Chief Executive Officer Roberto B. Tan outlined a series of proposed reforms. Chief among them is the expansion of PDIC coverage to include nonbank financial institutions (NBFIs) and cooperatives, a move designed to extend protections to a wider segment of depositors. The Philippines currently insures only bank deposits, leaving many depositors in rural cooperatives and other nonbank channels without formal government-backed protection.

The state deposit insurer is also seeking higher insurance coverage for accounts carrying greater socioeconomic value, including payroll, retirement, and settlement accounts. Additional proposals include measures to enable faster verification of deposit records, which would accelerate the payment of insurance claims, as well as the removal of legal barriers that currently delay depositors' access to insured funds.

The PDIC is further requesting authority to implement a temporary blanket guarantee during systemic financial crises, a tool used by deposit insurers in several jurisdictions to preserve public confidence and prevent destabilizing bank runs.

"This legislative agenda is how we fulfill that promise for the future by building a deposit insurance system that is broad in coverage, faster in response, and stronger in times of crisis and worthy of public trust," Mr. Tan said.

"We aim to strengthen our liquidation framework and the PDIC itself so we can resolve bail banks more efficiently and deliver on our mandate more effectively," he added.

PDIC General Counsel Maria Antonette I. Brillantes-Bolavar said on the sidelines of the briefing that the agency has already submitted its proposal to the Senate, where Senate President Vicente "Tito" C. Sotto III has signed on as a sponsor. She noted that the PDIC is currently working on a counterpart bill to submit to the House of Representatives.

Mr. Tan explained that once NBFIs and cooperatives are brought under PDIC coverage, the corporation plans to establish separate insurance funds for each category rather than commingling them with the existing bank deposit insurance fund. This ring-fencing approach mirrors a principle endorsed by the International Association of Deposit Insurers (IADI), which recommends that separate insurance funds be maintained when coverage is extended to distinct types of institutions. He said the PDIC also hopes to insure any deposits that can be declared by the Bangko Sentral ng Pilipinas (BSP), the country's central bank.

"The idea is we will have a separate fund for the cooperatives and for the NBFIs, so we will not mix. The fund that we have now is exclusively for the banks. So, we will now grow a different fund," he said.

Deposit Growth and Fund Adequacy

PDIC Vice-President for the Corporate Affairs Group Jose G. Villaret, Jr. reported that bank deposits have grown significantly following the increase in the maximum deposit insurance coverage (MDIC) to P1 million in March of last year, a change he attributed to strengthened consumer confidence. The increase, mandated under Republic Act No. 10846, doubled the previous coverage limit of P500,000 that had been in place since 2009.

Insured deposits reached P5.29 trillion as of end-March, Mr. Villaret said.

The expansion in insured deposits brought the ratio of the deposit insurance fund to estimated insured deposits down to 5.3% in 2025. However, Mr. Villaret said this ratio is projected to recover to 5.7% this year and to 6% in 2027.

He emphasized that the deposit insurance fund remains sufficient to support the higher maximum coverage.

"In 2025, when we increased the coverage, it definitely brought down the ratio… But that's not a problem because adjustments in coverage will bring down the ratio. The better part of the story is it will continue to go up. In fact, by 2028, we have already recovered or maintained the ratio that we had prior to the adjustment. With the increase in insured deposits, the ratio is now within the target of fund adequacy," he said.

Risk-Based Assessment System

The PDIC also announced that its risk-based assessment system (RBAS), currently under development in partnership with the World Bank Group, will undergo a one-year shadow run before full implementation by 2028.

The RBAS is designed to align banks' deposit insurance premium rates with their respective risk profiles, replacing the flat-rate structure that banks currently pay. A risk-based pricing model is widely used among member agencies of IADI as a best practice, as it creates incentives for sounder risk management by pricing higher-risk institutions at a premium.

— Aaron Michael C. Sy