FIN 100: Philippine Deposit Insurance Corporation

Certain types of deposits are not covered by the Philippine Deposit Insurance Corporation (PDIC).

Bonds, securities, and trust accounts are not covered by PDIC deposit insurance.

Deposits that don't have a corresponding amount of money are not insured by PDIC.

Deposits resulting from banking practices that are risky or unsound are not covered by PDIC.

Deposits determined to be from illegal activities are not insured by PDIC.

Operating banks in the Philippines are required to be PDIC members.

Most bank deposits are covered, including those from commercial banks, savings banks and other banking institutions in the Philippines.

Foreign currency deposits are insured by PDIC under specific laws and regulations.

PDIC insures deposits in branches and subsidiaries of foreign banks licensed by the BSP, but not necessarily deposits in Philippine banks with overseas branches.

Philippine banks can choose to insure their foreign branches with the PDIC, but as of end-2012, no such choice has been made.

PDIC covers only bank closure ordered by the Monetary Board, not other losses like theft, fire, or political instability.

Depositors don't pay insurance premiums; banks pay on behalf of account holders.

Insured amount begins with the outstanding balance, adjusts for interest and taxes, sums similar accounts, deducts loans, and caps at P500,000.

PDIC doesn't cover investment products (bonds, securities), unfunded/fraudulent accounts, deposits related to unsafe banking practices, and proceeds of illegal activities.

Contact your account officer for confirmation of deposit insurance coverage in the country where the branch is located.

Banks pay 1/5 of 1% per year of their assessment base to PDIC to fund the insurance fund from the bank's own assessment, not the customer.

Investment is the act of using your money or resources to gain potential future profit or income. It involves allocating resources with the expectation of generating a return.

Inflation is the general increase in prices of goods and services over a period of time, leading to a decrease in the purchasing power of money.

Return on investment (ROI) is the profit or income generated from an investment, expressed as a percentage of the initial investment.

Investing early in life allows your money to benefit from compound interest for a longer period, potentially leading to significantly higher returns.

Consistent saving and investment, even small amounts, over time can contribute to significant wealth accumulation.

Long-term investing aims to achieve financial goals over an extended period, allowing for greater potential for growth and minimizing the impact of market fluctuations.

Investments involve varying levels of risk and potential return. Higher risk investments typically offer the potential for greater returns, while lower risk investments generally provide more stable but lower returns.

Interest is the compensation received for lending money or investing in certain financial instruments. It represents the cost of borrowing money or the return on an investment.

The Government Service Insurance System (GSIS) is a government-run organization that provides social security and insurance benefits to government employees in the Philippines.

The primary purpose of GSIS is to provide financial security and protection to government employees during times of sickness, disability, retirement, and death.

Compulsory GSIS members are those who are required by law to join the system. This includes government employees, elective officials, and appointive officials who meet certain age and tenure criteria.

GSIS membership can be classified by type (e.g., regular employee, pensioner) and status (e.g., active, retired).

The Social Security System (SSS) is a government-run program that provides social security benefits to Filipino workers in the private sector.

SSS Sickness coverage provides financial assistance to members who are unable to work due to illness or injury, if they meet certain criteria like paying contributions, using up company sick leaves, and notifying their employer.

SSS Maternity Disability covers conditions that significantly impair a member's ability to work, such as complete loss of sight, loss of limbs, permanent paralysis, severe brain injuries, and other approved cases.

There are two types: a monthly pension for qualified members who have made significant contributions, and a lump sum amount for those who haven't met the contribution requirements.

Agencies that fail to remit collected GSIS contributions within the deadline are charged a 2% monthly interest on the unpaid amount.

Aside from interest, agency officials responsible for late remittances can face administrative and criminal charges, including imprisonment and fines.

GSIS members need to ensure their employers promptly remit their premium contributions and loan payments deducted from their salaries.

If the agency fails to remit the member's contributions, their annual dividend and retirement benefits might be affected.

GSIS members with 3 to 15 years of service receive a lump sum equivalent to 18 times their BMP at the time of resignation.

Members with 15 years of service and less than 60 years old receive a lump sum and a monthly pension starting at age 60.

Members who have contributed for 1 to 3 years are eligible for unemployment benefits for 2 months.

The reckoning date for separation benefits of police, jail, and fire personnel is February 1, 1996.

The surviving spouse receives a basic survivorship pension, which is 50% of the deceased's monthly benefit (BMP), until they remarry. They also receive a dependent children's pension for each eligible child, up to a maximum of 50% of the BMP

Dependent children are the deceased member's legitimate, legitimated, or legally adopted children, including illegitimate children, who are under 18 years old, unmarried, and not gainfully employed. Children over 18 are eligible if they are incapacitated and unable to support themselves due to mental or physical limitations acquired before reaching adulthood.

To qualify, the dependent parent must not be engaged in any gainful occupation, must have been living with the deceased as husband and wife, not be gainfully self-employed, and must not be receiving any other pension from GSIS or other organizations.

Payment of the basic survivorship pension to the spouse stops when they remarry, cohabit, or engage in a common-law relationship.

If the deceased has no primary beneficiaries, the secondary beneficiaries receive a cash payment equivalent to 18 months of the BMP, or if both primary and secondary beneficiaries exist, the primary beneficiaries receive the survivorship pension and the 18x BMP cash payment.

The survivorship pension consists of a basic survivorship pension, which is 50% of the deceased's monthly benefit (BMP), and a dependent children's pension, which is 10% of the BMP for each eligible child, but not exceeding 50% of the BMP.

The deceased member is required to observe precautionary measures prescribed by a physician or expressly required by the GSIS. This is to prevent the aggravation or continuance of their disability. Compliance with these measures can result in the resumption of benefits if the member is still qualified.

If a deceased member complies with the required precautionary measures to prevent the aggravation or continuance of their disability and is still qualified for benefits, their benefits can be resumed.