The Philippines has urged member-states comprising the Asean to improve catastrophic reinsurance initiatives that will help communities across the region recover faster from the impact of natural disasters and adverse effects of climate change.
According to Finance Secretary Carlos G. Dominguez III, in its bid to improve disaster insurance in the country, the Philippines previously made available a P1-billion insurance fund under its Parametric Insurance Pilot project to 25 disaster-prone provinces in the country to help them act faster and respond better to the devastating impact of natural calamities.
Traditional indemnity insurance takes a long time to assess and process, but so-called parametric insurance has quick-disbursing payouts whose amounts depend on the estimated loss determined through the Philippines’s Catastrophic Risk Model developed by the Department of Finance in 2014.
According to Finance Assistant Secretary Paola A. Alvarez, the project covers 25 local government units (LGUs) that include the provinces of Aurora, Cagayan, Camarines Norte, Camarines Sur, Catanduanes, Cebu, Davao del Sur, Davao Oriental, Dinagat Islands, Eastern Samar, Ilocos Norte, Ilocos Sur, Isabela, Laguna, Northern Samar, Pampanga, Quezon, Rizal, Sorsogon, Surigao del Norte, Surigao del Sur and Zambales.
The project is being implemented with assistance from the World Bank.
Potential beneficiary-LGUs can avail of the insurance cover in the event of a catastrophic earthquake or typhoon from the Government Service Insurance System. Such cover is fully ceded to the international reinsurance market, minimizing risks for the government, according to Alvarez.
“Because the Bureau of Treasury is the policyholder, the funds will be mobilized faster to the first responders, namely the national government and the LGUs,” Alvarez said.
For disaster-specific premiums, P500 million of the fund will be allocated as follows: 79.2 percent for typhoons and 20.8 percent for earthquakes. The other P500 million will be province-specific and split equally among the 25 provinces at P20 million each.
Dominguez said the Philippines is also working on improving building standards to ensure that structures are climate-resilient, and is expediting the rehabilitation of existing irrigation systems while constructing new ones, particularly in the northern and southern parts of the archipelago, among other initiatives to mitigate the impact of erratic climate patterns resulting from global warming.
Dominguez told Alvarez to focus primarily on developing mechanisms that would make disaster-prone areas in the country more resilient against calamities.
“We are working with the different Asean countries, as well as our different agencies, to improve the catastrophic reinsurance [programs], to improve the standards for construction of homes and buildings. We are working with [our] Department of Environment and Natural Resources and Department of Agriculture to mitigate the effects of climate change,” Dominguez said at a recent forum organized by the Center for Strategic and International Studies in Washington, D.C.
Dominguez said the impact of climate change is now being increasingly felt in the Philippines, particularly in Mindanao, which used to be mostly typhoon-proof, but now appears to be on the path of many tropical storms that have occurred recently in the country.
The adverse effect of climate change has led to flashfloods in Cagayan de Oro and Iligan, two of Mindanao’s highly urbanized cities; and also in the province of Bukidnon, a major food producer in southern Philippines.
“As you know, [in Mindanao] we never had typhoons there. We had typhoons once every 70 years in Mindanao.
However, now we are observing that, with climate change, the typhoons seem to be forming further south in the Pacific Ocean, which brings Northern Mindanao directly in the path of the typhoons,” he said.