The Philippine Deposit Insurance Corporation (PDIC), the state deposit insurer, announced a landmark expansion of the Philippine deposit insurance system to officially include Islamic banks (IBs) and Islamic banking units (IBUs) operating in the country. This significant development follows recent amendments to Republic Act No. 3591, also known as the PDIC Charter, as detailed in PDIC Bulletin 2024-09.
Under the new framework, deposits held in Islamic banks and Islamic banking units are now insured in the same manner as conventional deposits, providing the same level of protection up to the maximum deposit insurance coverage (MDIC) of P1 million per depositor, per bank. This new MDIC came into effect on March 15, 2025. As of the end of December 2024, the Philippine banking system recorded 12,514 Islamic deposit accounts.
PDIC President and CEO Roberto B. Tan emphasized the importance of this expansion, stating, “The expansion of deposit insurance to include Islamic deposits guarantees that depositors of Islamic banks have the same level of protection as those of conventional banks, thereby fostering confidence in the Islamic banking system. This is a welcome development that also aligns with the National Government’s pursuit of promoting financial inclusion and strengthening the Islamic banking sector in the country, as this encourages more individuals and businesses to save in banks.”
Islamic banks and Islamic banking units offer a range of financial products and services, including deposits, that adhere to Shari’ah Law principles. These principles emphasize ethical financing, risk-sharing, and socially responsible practices, providing an alternative banking option for a growing segment of the population.
This move by the PDIC is expected to further bolster trust and stability within the country’s burgeoning Islamic finance sector, encouraging greater participation and contributing to broader financial inclusion goals.
