The Philippine Deposit Insurance Corporation (PDIC) will start imposing a higher depositor insurance from P500,000 to P1 million per bank client on 15 March.
PDIC said the increase in the minimum deposit insurance coverage (MDIC) reflects the need of depositors for more funds to offset the impact of inflation.
"The PDIC Charter authorizes the PDIC Board of Directors to adjust the MDIC to an amount indexed to inflation or in consideration of other economic indicators as it deems appropriate," PDIC said in a statement.
To ensure the MDIC provides palpable relief to depositors affected by insolvent banks or financial firms, the law also requires the PDIC to review the depositor insurance coverage every three years.
"The last increase was in 2009, and this new adjustment restores the value of deposit insurance after years of rising costs," Metrobank said in a statement.
In its monetary policy meeting last month, the Bangko Sentral ng Pilipinas (BSP) said it projects an increased average inflation this year at 3.5 percent from 3.2 percent it estimated in December last year.
BSP said inflation risks include possibly higher power and water bills and higher prices of certain goods due to high tariffs on US imports under the Trump administration.
"When it comes to trade policies, the inflation impact has been higher since the 1960s," BSP Governor and Monetary Board Chairman Eli Remolona Jr. said.
BSP aims to help stabilize inflation near 2 percent.
Last year, the average inflation stood at 3.2 percent, with the prices of food and non-alcoholic drinks, fuels, and utilities as major growth contributors based on data from the Philippine Statistics Authority.
While inflation accelerated in the last quarter of 2024, a BSP survey revealed households with savings during that period declined to 25.6 percent of the total respondents from 29 percent in the third quarter.
"With this change in the MDIC, Filipinos can save with even greater confidence, knowing their money is secure," Metrobank said.