MANILA— The Philippine Deposit Insurance Corporation (PDIC) is seeking legislative reforms to expand depositor protection, speed up claims payments and strengthen the country’s ability to respond to financial shocks.

The state deposit insurer recently held a two-day government stakeholder consultative workshop to discuss proposed amendments to its charter aimed at making the Philippine deposit insurance system more responsive, resilient and future-ready.

Representatives from the Bangko Sentral ng Pilipinas, Department of Finance, Cooperative Development Authority, Securities and Exchange Commission and Office of the Government Corporate Counsel participated in the discussions.

International financial institutions, including the World Bank, also served as reactors and provided perspectives on international practices in deposit insurance and financial stability.

Among the proposed reforms is the expansion of deposit insurance beyond traditional banks to cover eligible deposit products offered by non-bank financial institutions (NBFIs) and cooperatives.

The proposal seeks to extend the financial safety net to small depositors placing their funds with these institutions, recognizing their growing role in financial inclusion.

Under the proposed framework, a fund of last resort could be used to protect eligible depositors when an NBFI or cooperative can no longer meet its obligations. The proposal draws from the United Kingdom’s Financial Services Compensation Scheme.

The proposed amendments would also allow differential deposit insurance coverage for accounts considered to have social or economic value, including payroll, pension, retirement and settlement accounts.

Accounts with temporarily high balances resulting from qualifying life events may also be covered under the proposed system.

The PDIC Board of Directors would determine the specific eligible accounts, coverage levels and implementing rules through appropriate regulations.

The measure is intended to provide additional protection to depositors whose balances temporarily exceed the standard insurance limit because of the purpose or nature of their accounts.

It also seeks to reduce disruptions to households, communities and payment systems following bank closures and support overall financial stability.

Under the existing system, deposits are insured up to a uniform maximum of P1 million per depositor, per bank, regardless of the type of depositor or account.

The proposed amendments would authorize the PDIC Board to adopt different coverage levels for qualified accounts based on the circumstances and needs of depositors.

The proposed changes also draw from deposit insurance systems in other countries.

South Korea, for instance, extends deposit insurance to institutions beyond banks, including life and non-life insurance companies, investment traders and brokers, merchant banks and mutual savings banks.

Japan’s system likewise covers banks and cooperative deposit-taking institutions such as Shinkin banks, credit cooperatives and labor banks.

The PDIC said these models demonstrate how broader deposit insurance coverage can strengthen depositor protection while supporting financial stability and confidence.

The proposed legislative package also seeks to improve the PDIC’s capacity to recover assets, accelerate the payment of insured claims and prepare for systemic financial shocks.

Participants at the end of the workshop expressed broad support for the proposed reforms, which the PDIC said would strengthen its ability to protect depositors and address emerging risks in the financial system.