PDIC considers risk-based fees for deposit insurance in Manila

The Philippine Deposit Insurance Corp. (PDIC) is exploring a new way to set fees for banks that insure deposits. This method, called "risk-based" pricing, aims to discourage banks from taking on risky investments. PDIC officials announced this plan during a recent press conference. Currently, banks pay a flat fee of 0.2% on their total deposits. This fee helps protect depositors by ensuring they can get their money back if a bank closes. The PDIC is required to conduct a study on risk-based assessments by 2027. However, they plan to finish this study much sooner, possibly this year. Under the new system, banks that engage in riskier activities may have to pay higher fees. PDIC's general counsel, Maria Antonette Brillantes-Bolivar, explained that the fees would be based on the level of risk each bank takes. Any changes will be reported to Congress. Before new regulations are enforced, the PDIC will collect feedback from the banking sector. PDIC president and CEO Roberto Tan emphasized that any changes will be fair to banks. He acknowledged that implementing this new system is complex and requires careful study. This proposal comes after the PDIC recently increased deposit insurance coverage from P500,000 to P1 million per depositor per bank. BSP Governor Eli Remolona Jr. stated that improving deposit protection would not lead to risky behavior, as it is essential to prepare for potential financial challenges.