Just recently, the international financial landscape suffered (and still is suffering) from a severe problem. Even giant US financial institutions like Fannie Mae and Freddie Mac had to be bailed out; Lehman Brothers filed for bankruptcy and AIG is fighting to survive.
So, you may ask, how safe is your money in the bank? Among the worst-case scenarios is a bank run, a panic which occurs when a large number of customers of a bank fear it is insolvent and withdraw their deposits. You may still remember the bank run suffered by Urban Bank some years back. Still, it appears that the Philippine banking sector is in pretty much in good shape.
According to the BSP, while the world crisis is far from over, Philippine banks have a very limited exposure to risky securities — the subprime mortgages in the US – the headache of international financial institutions. A credit rating agency, Standard & Poor’s, recently announced that the Philippines is “an island of calm” in a world financially in turmoil.
I believe there’s really not much to worry about at this point, at least with respect to the safety of deposits in the bank. Besides, deposits are insured by the Philippine Deposit Insurance Corporation (PDIC) up to P250,000. In fact, there are good deposit accounts, like the Personal Equity and Retirement Account or PERA, which provides you a tax-free windfall when you retire.
