PDIC advances fairer risk-based deposit insurance premiums

MAKATI CITY — As banks rapidly adopt digital technologies, public trust remains the cornerstone of a stable financial system.

While innovation is reshaping financial services, confidence in the safety of bank deposits continues to support the strength and resilience of banking institutions.

The Philippine Deposit Insurance Corp. highlighted its development of a Risk-Based Assessment System, or RBAS, during the 52nd Annual Convention of the 42-member Chamber of Thrift Banks on July 15.

The reform is intended to promote sound governance, stronger risk management and greater fairness in deposit insurance.

PDIC General Counsel Maria Antonette I. Brillantes-Bolivar emphasized the importance of sound governance and prudent risk management in sustaining depositor confidence amid rapid technological change.

Developed with the World Bank Group, RBAS represents a significant shift from the current flat-rate assessment system.

Banks now pay a uniform annual assessment equal to 0.2% of their total deposit liabilities. The assessments are paid semiannually and fund the country’s deposit insurance system.

Under RBAS, premium rates will reflect each bank’s individual risk profile, including its financial condition, governance and risk management practices.

The principle behind the reform is that banks that manage risks responsibly should be recognized for doing so.

Rather than increasing the industry’s burden, RBAS is designed to encourage prudent risk management and help build a stronger, more resilient banking system.

The reform is particularly relevant to the thrift banking sector, which serves more than 10.4 million deposit accounts nationwide.

As key providers of financial services to households, entrepreneurs, and small and medium-sized enterprises, thrift banks play an important role in advancing financial inclusion.

PDIC said thrift banks can continue expanding access to formal financial services by combining technological innovation with their strong community presence.

To support a smooth transition, PDIC will conduct a one-year shadow run before fully implementing RBAS.

The trial period will allow banks to understand how the framework evaluates their operations, identify areas for improvement and strengthen their risk management systems before the new premium assessments take effect.

PDIC assured banks that RBAS includes strict confidentiality measures for bank-specific assessments, simulated scores and risk ratings.

The framework also includes mechanisms for review, clarification and periodic recalibration to keep it responsive to changing industry conditions.

RBAS reflects PDIC’s commitment to innovation and alignment with international best practices.

The framework is consistent with the Core Principles for Effective Deposit Insurance Systems established by the International Association of Deposit Insurers.

The principles call for deposit insurers to have timely and relevant information for risk assessments, maintain meaningful distinctions among risk and premium categories, ensure transparency in premium calculations and protect confidential institution-specific ratings and rankings.

They also call for regular reviews and updates to preserve a deposit insurance system’s effectiveness.

PDIC currently insures deposits up to PHP 1 million per depositor, per bank. The higher coverage limit took effect March 15, 2025.

RBAS will be more than a new assessment framework. It will be an investment in a stronger deposit insurance system that benefits banks, depositors and the broader economy.

“RBAS is not about imposing additional burden on banks. It is about creating greater fairness, stronger incentives, and a more resilient banking system, one that benefits the millions of Filipino savers we all serve,” Brillantes-Bolivar said.