As a New Year’s gift to depositors, Congress will double the insurance for bank deposits in an effort to shield depositors from the global financial meltdown, Senator Manuel Roxas II announced yesterday.
“This is a timely New Year’s gift to Filipinos. In this time of financial uncertainty, it’s essential to have one’s deposits protected as much as possible,” said Roxas, author of the bill that raises the maximum insurance coverage from P250,000 to P500,000.
Aside from Roxas, Senators Chiz Escudero and Edgardo Angara also pushed for the passage of the bill.
The doubling of the insurance for bank deposits is now under discussion in the bicameral conference committee reconciling the Senate and House versions of the bill amending the charter of the Philippine Deposit Insurance Corporation (PDIC).
Roxas got the Senate to approve two of his amendments. First, for the first six years from effectivity of the proposed law, the PDIC shall have the right to collect reimbursement from the government for the amount exceeding P250,000 up to P500,000. Second, the Senate approved that PDIC may prescribe an additional premium assessment of a maximum of one-half percent in order to build up its capitalization. This additional premium may be assessed by PDIC on the third year from the proposed law’s effectivity.
“For the first six years of the law, the PDIC can ask reimbursement from the government in order to pay its obligations to depositors. This will help the PDIC in adjusting to the increased insurance coverage,” he said.
“PDIC must have sufficient funds, but not to the point of unduly burdening the banks. A half-percent increase in premiums on the third year of the law’s effectivity is just the right amount for this,” Roxas explained.
Raising the deposit insurance to P500,000 will cover 97 percent of all bank deposits, whereas the P250,000 ceiling covers about 91 percent. – Christina Mendez