Question & AnswerQ&A (Republic Act No. 9576)
The primary policy is to strengthen the mandatory deposit insurance coverage system to generate, preserve, and maintain faith and confidence in the country's banking system and protect it from illegal schemes, while ensuring PDIC effectively safeguards the interests of depositors.
Deposit means the unpaid balance of money or its equivalent received by a bank in the usual course of business for which credit has been or is to be given to various types of accounts, excluding obligations payable outside the Philippines, and excluding certain accounts such as investment products, fictitious transactions, unsafe banking practices, and proceeds of unlawful activities.
Investment products such as bonds and securities, trust accounts, unfunded or fictitious transactions, deposits from unsafe and unsound banking practices, and deposits that are proceeds of unlawful activities are excluded from deposit insurance.
The maximum deposit insurance coverage is Five hundred thousand pesos (P500,000.00).
Joint accounts are insured separately from individually owned accounts and the maximum insured deposit is divided equally among the co-owners unless otherwise indicated. If held jointly by juridical and natural persons, it is presumed to belong entirely to the juridical person.
PDIC can conduct bank examinations with prior Monetary Board approval but not within 12 months of a last exam. PDIC can conduct special exams in coordination with BSP if a closure is threatened, and may inquire into deposit accounts in cases of unsafe or unsound banking practices.
The Corporation and its officials are held free and harmless from liability for actions performed in good faith and without willful violation, malice, or gross negligence, and are entitled to indemnification for liabilities arising from their official functions.
The Deposit Insurance Fund is preserved and maintained at all times; PDIC's tax obligations for five years shall be chargeable to the Tax Expenditure Fund, and from the 6th year onward, PDIC is exempt from income tax, final withholding tax, VAT on member bank assessments, and local taxes.
With presidential approval, PDIC may issue bonds, debentures, and other obligations to provide liquidity for insured deposits and financial assistance, with government guarantee of up to twice the Deposit Insurance Fund, and exemption from taxation on these obligations.
Splitting of deposits refers to breaking down a deposit exceeding the maximum insured amount into multiple accounts under different names without beneficial ownership for the purpose of availing maximum insurance coverage, especially within 120 days before or during a bank closure or holiday.