Publication: Financial Sector Assessment Program Update : Assessment of Philippines Deposit Insurance Corporation
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2011-02
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2013-10-03
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The global economic and financial sector crisis of 2008-09 became a stark reminder to countries around the world of the need for an effective process for maintaining the confidence of depositors and resolving troubled financial institutions with the least amount of adverse impact on the financial sector and the community served by the institutions. The role of deposit insurance was highlighted during this difficult time. Nations without a formal system found the need to reassure their citizens by announcing formal government guaranties. Nations with established systems were not immune from the public's concern and as a result many increased the allowable coverage. The Philippines, although somewhat immune from the global crisis, none the less felt the impact of the crisis and responded, as did other countries, by taking steps to address the possible impact of the crisis by bolstering depositor confidence. The Philippines stands out among its Asian neighbors at being in the forefront of deposit insurance. Long before deposit insurance became popular at the peak of the Asian financial crisis of the late 1990's, the Philippines already had an established formal deposit insurance system. The Philippine Deposit Insurance Corporation (PDIC) is a government instrumentality. It was established in June 1963 with the passage of Republic Act (RA) 3591. The role of PDIC at that time was to help build the banking sector by encouraging citizens to save and to deposit those savings in the formal banking system. It was to do this by assuring depositors of the safety of their deposits by providing a government sponsored insurance of up to a P 10,000 per depositor in the event of a bank failure. The underlying motivation was to promote a safe and sound banking system and to foster public confidence in it.
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“International Monetary Fund; World Bank. 2011. Financial Sector Assessment Program Update : Assessment of Philippines Deposit Insurance Corporation. © World Bank. http://hdl.handle.net/10986/16057 License: CC BY 3.0 IGO.”
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