PDIC: 97% of deposits covered by insurance

MANILA, Philippines — About 97 percent of the total deposit accounts nationwide are covered by the maximum P500,000 insurance coverage as Filipinos opted to save more amid the COVID-19 pandemic, according to the state-run Philippine Deposit Insurance Corp. (PDIC).

Latest data released by the agency showed the number of insured deposit accounts increased by 11.8 percent to 76.1 million in end September last year from 68.1 million in 2019.

This accounted for 96.7 percent of the total 78.7 million deposit accounts in 537 banks nationwide.

In terms of amount, data showed 11.6 percent or P1.7 trillion of the total P14.3 trillion deposits are fully covered by deposit insurance, 11.3 percent higher than the P1.5 trillion recorded in end September 2019.

PDIC president Roberto Tan attributed the steady growth in the number of deposit accounts and in terms of amount of deposits to the increased depositor confidence in the banking system despite the adversities posed by the pandemic.

“We are confident that the full year data will present even brighter prospects for saving as a positive response to the health crisis. As depositor confidence has become evident, it is important for PDIC to also help sustain the trust of the depositing public through adequate deposit insurance coverage and effective supervision of banks’ operations,” Tan said.

Total deposits went up by 9.5 percent year-on-year P14.3 trillion from P13.1 trillion. Deposits with balances of P100,000 and below posted the biggest growth in terms of amount and accounts with 12.4 percent to P535.7 billion from P476.7 billion .

This mirrored the double-digit growth of 11.9 percent to 71.2 million accounts from 63.6 million.

Meanwhile, deposits with balances greater than P100,000 up to P500,000 increased by 10.8 percent to P1.1 trillion from P1 trillion as accounts rose by 11.4 percent to five million from 4.5 million.

On the other hand, deposits with balances above P500,000 grew by 9.3 percent to P12.7 trillion from P11.6 trillion as deposit base rose 6.7 percent to 2.6 million form 2.4 million.

In these uncertain times, Filipinos showed an inclination to save through banks.

Savings deposits and demand deposits/NOW accounts amounted to P6.8 trillion and P3.9 trillion, respectively, and jointly accounted for the bulk of total domestic deposits at 74.5 percent.

Combined time deposits and long-term negotiable certificates of deposits (LTNCDs) amounting to P3.7 trillion accounted for 25.5 percent of the deposits.

Depositors’ preference for liquidity in these uncertain times, with accounts that allow them to withdraw cash immediately, shows in the negative growth of 7.4 percent in time deposits and LTNCDs from the previous P4 trillion, while savings deposits increased by 14.6 percent and demand/NOW deposits grew by 21.1 percent.

The Bangko Sentral ng Pilipinas (BSP) has committed to bring up with the PDIC the proposed hike in deposit insurance cover currently pegged at P500,000 amid higher risks faced by the banking sector amid the global health crisis.

The PDIC Charter was amended in April 2009 doubling the deposit insurance cover to P500,000 from P250,000 to ensure confidence in the country’s banking system after the global financial crisis in 2008.

House Bill No. 5812 has been filed before the House of Representatives and Senate Bill 1260 has been filed before the Senate, both seeking to raise the maximum insurance protection to P1 million per depositor from the current level of P500,000.