The Department of Finance (DOF) said the privatization of the Philippine Crop Insurance Corp. (PCIC) could increase the number of farmers that may be covered by microinsurance.
Finance
Undersecretary Gil S. Beltran told reporters
that the government has the option to privatize the PCIC or transform the
government-owned and -controlled corporation (GOCC) into an entity that
offers reinsurance.
“Do you know how many farmers they cover? It’s not even at 1 million. Right now, they shut out competition. So let the private sector provide the product and let the PCIC play a more active role as a reinsurer to diversify the risk because microinsurance providers are limited to certain areas,” Beltran said.
The DOF’s chief economist also said the PCIC will play a more active role in terms of providing insurance coverage for local farmers if it becomes a reinsurer.
“We have that option [to privatize it], like the Credit Information Corp. There’s a provision there for privatization. We can have that as an option, but it depends upon the congressmen who will file the bill,” he added.
According to Beltran, the plan to transform the PCIC into a reinsurer is contained in a bill that is currently pending at the Senate.
“There’s a plan to transform this PCIC into a reinsurer instead of competing with the private sector as an insurer. So once this takes effect then private provision of farmers insurance will become more competitive,” he said.
“It depends upon Sen. [Cynthia A.] Villar filing her bill, it’s pending at the Senate, I think they passed it at the Lower House, they can still do it during the three weeks. She might have it approved,” Beltran added.
On January 30, 2018, the House of Representatives approved on third and final reading a measure strengthening the PCIC by expanding its coverage and allowing it to engage in index-based insurance and reinsurance.
The lower chamber passed House Bill (HB) 6923, or “An
Act Strengthening the PCIC,” repealing Presidential Decree 1467, which created
the GOCC under the Department of
Agriculture (DA).
Rep. Arthur C. Yap of the Third District of Bohol, the chairman of the House Committee on Economic Affairs and principal author of the bill, said the measure seeks to overhaul the crop-insurance system by allowing it to provide index-based direct insurance and reinsurance policies.
The DOF is keen on hiking the number of Filipinos covered by microinsurance to 50 million by 2022. Beltran made this statement during the forging of a National Task Force (NTF) under the Climate Risk Insurance (CRI) Program.
Policyholders of microinsurance reached 38.9 million last year. The CRI program is targeting to cover more farmers.
Aside from offering microinsurance to farmers, the NTF will widen the distribution channels for the sale of microinsurance products and put more effort in communication campaigns for insurance, to be able to meet the 50-million target.