The Philippine government is keen to create a national system where various state entities, down to local government units (LGUs), can rely on a rational structure to evaluate risks and access resources for risk protection and management through a public asset insurance programme, said Finance Secretary Carlos Dominguez III.
Mr Dominguez acknowledged in a statement that the government faces an enormous task of formulating this type of public insurance structure, given that the Philippines is now just starting to draw up its registry of national assets.
Ensuring comprehensive and adequate insurance protection for government assets would help shield the fiscal budget from volatile shocks arising from catastrophic events and would also safeguard the government’s long term development objectives, he said.
While some state assets are insured, in most cases, these are either inadequate to indemnify the government or lack the budget for premium payments.
A pilot programme to inventory government assets and properties through a National Asset Registry System is currently being carried out by several Departments, including: Education (DepEd), Public Works and Highways (DPWH), Health (DOH), and Social Welfare and Development (DSWD) along with the National Irrigation Administration (NIA), in coordination with the Bureau of the Treasury.
The relevant information in the registry will help in crafting the appropriate insurance structure for the government.
Dept of Finance asks World Bank to help craft public asset insurance programme
On the sidelines of the recent Annual Meeting of the World Bank Board of Governors in Bali, Mr Dominguez had asked the World Bank to assist the Philippines in crafting an insurance structure for its public assets in cooperation with private reinsurers to enable the government to respond faster and better to natural disasters.
The Philippine government is planning to also work with Lloyd’s of London and the Citi Group to explore the possibility of tapping reinsurance facilities and accessing the capital markets to obtain financial cover for state assets.
Mr Dominguez said it would be “irresponsible” for the government to embark on a $170bn infrastructure programme without a comprehensive disaster risk financing and insurance plan. A Nat CAT risk modelling developed for the Philippines shows that the country is expected to incur, on average, PHP177bn ($3.4bn) in annual losses from damage to public and private sector assets arising from typhoons and earthquakes.
The creation of a Department of Disaster Management and Resilience (DDMR), for which legislation is pending, would also complement the insurance programme efforts.