Gov’t seeks WB help for program to insure public assets

The government has asked the World Bank’s assistance in crafting an insurance program for public assets to protect the state from risks posed by disasters and calamities, according to the Department of Finance.

Finance Secretary Carlos Dominguez pitched this proposal during a meeting with Fabio Kanczuk, the recently elected executive director of the World Bank Group Constituency of Brazil, Colombia, Dominican Republic, Ecuador, Haiti, Panama, Philippines, Suriname and Trinidad & Tobago.

“We want to develop this strategy in which we can have a way to analyze our risks to decide how much we will take and how much we will pass on to the insurance market, not only for our national government assets, but also for assets at the local government level,” Dominguez said.

Dominguez told Kanzcuk that the Philippines also plans to work with Lloyd’s of London and the Citi Group to explore the possibility of tapping reinsurance facilities and access the capital market to obtain financial protection for state assets.

The finance chief met with officials of Lloyd’s during an official visit to London last September to learn about global best practices and ways of strengthening the Philippines’ fiscal resilience in the event of disasters.

Dominguez then instructed the Bureau of the Treasury (BTr) to continue its engagement with Lloyd’s to discuss an appropriate insurance protection structure that can be put in place at the soonest possible time.

According to the secretary, there is a need for the government to implement a comprehensive disaster risk financing and insurance program, especially now that it is undertaking a massive infrastructure program.

He said ensuring a comprehensive and adequate insurance protection program for government assets would help shield the country’s fiscal position from volatile shocks arising from catastrophic events, and would also safeguard the government’s longterm development objectives.

Dominguez cited a catastrophic risk modelling developed for the Philippines, which showed that the country is expected to incur about P177 billion in public and private asset losses annually due to typhoon and earthquakes.

While some state assets are insured, Dominguez said these are either inadequate to indemnify the government or lack the budget for premium payments.

To protect the government from disasters, Dominguez said the Duterte administration is pushing for a bill to create a Department of Disaster Management and Resilience (DDMR).

He said a National Asset Registry System is also being created by the Department of Education (DepEd), Department of Public Works and Highways (DPWH), Department of Health (DOH), Department of Social Welfare and Development (DSWD), and the National Irrigation Authority (NIA), in coordination with the Bureau of the Treasury (BTr).