Question-   Special Banking Laws


Special Banking Laws

Philippines Depository Insurance Corporation (PDIC)

Republic Act 3591 (PDIC Charter)



  • Secretary of Finance = ex-officio Chairman of the  Board
  • Governor of BSP = ex-officio member of the board
  • President of the Corporation = appointed by the President of the Philippines

*ex-officio =from the office or by right of office; by virtue of his office or position

June 2009, provides maximum deposit insurance coverage of Php500,000 per depositor per bank(branch is not exemption). All types of bank deposits is covered whether denominated in local or foreign currencies. All deposits accounts, time, savings, checking, regardless of type shall be combined for MDIC. However, joint account is insured separately from individually owned deposit account. Thus, it enjoys a separate maximum insurance coverage of P500,000 from an individual account.

Joint account –juridical person and a natural person, proceeds of the insurance coverage are presumed to belong entirely to the juridical person. However, it can be overcome by evidence like written stipulation that the deposit belong to the natural person.

In-Trust-For, By Account (Single Account)wherein the owner is the principal depositor and not the agent managing the account.

Gold bars and other valuables are not covered by the PDIC lawas insurance coverage includes only cash deposits in the banks which have clear monetary value.

Depository Insurance Fundis where the PDIC get funds to operate its affairs under the law and secure insurance of all deposits which is maintained through the payment of premiums by each bank.


  • Based on the size of its deposits
  • The level of risk he bank poses

Bigger banks with larger volumes of clients, assets and deposits are obligated to pay higher premiums to DIF.

PDIC makes regular assessments of banks at an annual rate of 1/5 of 1% of their total deposit liabilities.

Deposits in the Philippine banks have a great degree of confidentiality to build depositors’ trust and confidence, and encourage Filipino citizens to patronize banking industry and improve stability of economic condition in the country. Thus, they cannot be scrutinized, inspect, examine or inquired upon by anyone out of mere curiosity for depositors are protected by Republic Act No. 1405 or the Bank Secrecy Law which prohibits the disclosure of, or inquiry into, all deposits in banks and banking institutions in the Philippines.

Exception to the Coverage of Bank Secrecy:

  • If there is a written consent of the depositor
  • In case of impeachment (bank deposits as evidence of corruption)
  • Upon order of a competent court in cases of bribery or dereliction of duty of public official
  • in cases where the money deposited or invested is the subject matter of the litigation.
  • In cases where the money is suspectedly laundered.

AMLA relaxes the bank deposit secrecy laws authorizing the AMLC and the Bangko Sentral ng Pilipinas access to deposit and investment accounts in specific circumstance.

Any violation of the Bank Secrecy Law will subject offender upon conviction, to an imprisonment of not more than five years or a fine of not more than twenty thousand pesos or both, in the discretion of the court.

Like PDIC, Bank Secrecy law doesn’t include deposits of gold bars and other valuables in the safety deposit boxed of the bank because bank has no knowledge about what is actually deposited inside the safety deposit boxes of their depositor. However it include deposits in foreign currencies as all monetary deposits enjoy absolute secrecy regardless of currencies.

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