SVB failed partly due to a social media-driven bank run that saw its depositors withdraw $42 billion in just 24 hours, stretching the bank beyond its breaking point. In a bid to restore trust in the banking system, US authorities decided tofrom the fallout of the banking woes in the US, but bank failures have happened several times in the country’s past.
Although the PDIC covers a broad range of financial institutions, not everything is guaranteed by the government. How do you compute this? First off, the PDIC separately insures single and joint accounts. That means all single deposit accounts in your name under the same bank are insured up to a total of P500,000.
For joint accounts, only P500,000 of the account’s outstanding balance is insured. For instance, in the joint “Juan Cruz & Maria Cruz & Pedro Cruz” account, only P500,000 of the P700,000 is insured by the PDIC. The insured amount is then divided equally among accountholders, unless otherwise stipulated. If a depositor has multiple joint accounts, like in the example above, their shares in the insured amount of each account is totaled up to a limit of again P500,000.
“As of now, the earliest that you can get your deposit insurance is 14 days. The latest would be 21 days. We’ve improved our processes from the time in 2000 where your payment can be received months after,” said Adalzon Banogon, PDIC vice president of the deposit insurance sector.Currently, the PDIC covers 480 banks across the country. As of end-2023, deposits in PDIC member banks total to P18.98 trillion across 121.60 million accounts.