Money Magnets

April 29, 2009.  President Gloria Macapagal-Arroyo has signed amendments that will increase the insurance coverage for bank deposits by 100 percent.  The insurance for bank deposits to be provided by the PDIC will be raised from PhP 250,000  to Php 500,000.  

The amendment was done in order to strengthen the confidence in the Philippines' banking system.  In order to encourage the people to keep their money in the banks and protect them during this global recession.

However, in a report from the Philippine Daily Inquirer, it also states that the amendment also "grants the deposit insurer which deposits should be insured and which should be not."  Which begs the question, 'Which deposits are insured?'  Are all our bank deposits insured by default or does it have to be approved by the PDIC first?  If the deposit insurer (PDIC) can take away our bank deposit insurance anytime, somehow, I don't feel so secure anymore.  I realize, of course, that they've added this to deter fraudulent schemes such as that of the Legacy Group.  I think further explanations should be provided to add clarity to the subject.  If the deposit insurance can only be taken away if fraudulent practice is proven to exist, then I guess that would be more acceptable.  

As to when this amendment will take into effect has not been announced yet.  I checked the PDIC and still no news has been reported on the matter.  (Haaay ... I miss Money Smarts already.)

I'll keep you guys updated on this matter once I have more news.