PDIC extends deposit insurance to islamic banks

Depositors of Islamic banks and banking units in the Philippines now enjoy the same protection as those in conventional banks, as the Philippine Deposit Insurance Corporation (PDIC) has formally extended coverage to Shari’ah-compliant financial institutions.

In a statement released Wednesday, the PDIC announced that Islamic banks (IBs) and Islamic banking units (IBUs) are now part of the country’s deposit insurance system. Deposits in these institutions are insured up to PHP1 million per depositor, per bank—the same maximum deposit insurance coverage (MDIC) provided to conventional bank accounts.

“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,” said PDIC President and CEO Roberto Tan. “This move supports public confidence in the Islamic banking system.”

The inclusion is seen as a key step in promoting financial inclusion and advancing the development of Islamic finance in the Philippines. Tan noted that the decision is consistent with the national government’s broader goal of making banking services more accessible and responsive to the diverse needs of Filipinos.

Islamic banks and IBUs offer financial services aligned with Shari’ah principles, which emphasize ethical investing, risk-sharing, and socially responsible financial practices. These institutions provide alternatives for clients who prefer faith-based banking models.

As of the end of 2023, the Philippine banking system recorded 12,514 Islamic deposit accounts. With PDIC coverage now in place, industry stakeholders expect greater public interest and participation in Islamic finance.

The move is also expected to help Islamic banks attract a broader customer base and contribute to a more inclusive financial ecosystem—particularly in regions with significant Muslim populations.