Pinoy Business Coach

By now the turmoil besetting the banking sector with the recent closure of Banco Filipino has become a reality.  A reality that has bitten most with the ugly fact that life savings and other financial instruments went down the drain at the twinkling of an eye.  Whatever the reason for the closure, be it political, a smear campaign or a power struggle between a government agency bullying a private entity, one thing remains, many are going through a heavy financial ordeal as we speak.

My wife and I were discussing this recent event since friends of ours lost a substantial amount since they ignored a basic tenet in banking which is contained in the PDIC coverage of insurance per depositor amounting to Php 500,000.  These friends of ours placed several times over this ceiling amount because they were enticed by the high interest rates that the bank was offering and was not even aware of placing the accounts in several identities at least to minimize exposure.

In the environment we grew up in, I knew early that banks have a certain ceiling where they can reimburse you your deposits as covered by PDIC.  My wife on the other hand informed me that it was not until law school that she became aware of that rule.  2 different realities learning a little information at different time frames.

That is the power of a little information, it can either save you from financial ruin or lead you to the mountain of wealth.  If you have tons of money, the least you can do is spread it among eligible banks making sure that they are divided versus the maximum amount set by the PDIC. If you would like to patronize a certain bank and put more than 500T then it would be in your best interest to at least place the account in different names (if you can make it work) given that you can trust them.

Remember a fool and his money are soon parted.