Senate bill seeks hike in deposit insurance coverage

Sen. Renato Cayetano urged Malacañang yesterday to certify as urgent a Senate bill seeking to increase the insurance coverage of bank deposits, currently pegged at a maximum of only P100,000.

"The immediate passage of the measure would help restore public trust in the banking system and boost the national savings mobilization effort," he said.

Under Senate Bill 1522, all bank deposits of less than P100,000 will be insured 100 percent. Deposits of P100,000 to P250,000 will get a 75-percent insurance coverage, but in no case shall it be less than P100,00.

Deposits of at least P250,000 will have insurance coverage of 50 percent, provided the depositor shall receive no less than P175,000.

At present, all deposits regardless of the amount deposited are insured by a maximum of only P100,000. This is provided for in the charter of the Philippine Deposit Insurance Corp., which Senate Bill 1522 seeks to amend.

Cayetano, chairman of the Senate committee on justice and human rights, said last month's collapse of Urban Bank, which affected 14,000 depositors, underscored the need for Congress to pass the measure.

Officials of the Bangko Sentral ng Pilipinas earlier expressed support for the increased insurance coverage of bank deposits, saying the current maximum coverage of P100,000 is too low and had been overtaken by inflation over the years.