THE Philippines called for stronger cooperation among member states of the Association of Southeast Asian Nations (ASEAN) on disaster risk financing and insurance (DRFI), citing the region’s vulnerability to natural disasters.
During the 23rd ASEAN Finance Ministers’ Meeting in Chiang Rai, Thailand, Finance Secretary Carlos G. Dominguez III said the liberalization of catastrophic risk insurance will allow for greater access to financial services to protect against calamities in the region.
He added that liberalizing catastrophic risk insurance will also encourage the development of disaster risk information and modeling systems within ASEAN, which can be used to “assess the economic and fiscal impacts of natural disasters, including the sharing of disaster risk data and information at the national level.”
Speaking on behalf of the Philippine government, Mr. Dominguez said ongoing activities such as “regional capacity building on information and experience sharing, awareness and education on DRFI as well as sharing of experiences among member states on fiscal risk management” can be enhanced through intersectoral cooperation.
According to the website of the ASEAN DRFI Programme, three sectoral bodies of the association developed the ASEAN DRFI Roadmap in 2011.
The roadmap aims to strengthen the capacity of member states to effectively manage the impacts of disasters, enhance the financial resilience of the ASEAN Community and promote regional cooperation on DRFI for a disaster- and climate-resilient region.
The Philippines is one of the countries in the region most vulnerable to natural disasters. In 2013, super-typhoon Yolanda (international name: Haiyan) claimed over 6,000 lives and cost the Philippine economy about P571 billion, dampening economic growth by about 0.9 percentage points.
Late last year, the government availed of a parametric insurance policy from the international reinsurance market with a maximum coverage of P20.49 billion, protecting national and local government assets, including public schools in 25 disaster-prone provinces.
In a report from Lloyd’s published in October, the Philippines had the third-highest insurance gap out of the 43 countries surveyed with $4.9 billion, equivalent to 1.3% of its gross domestic product and only lagging Bangladesh and Indonesia.
In terms of underinsurance, or expected losses that will exceed insurance coverage, the country’s shortfall amounted to $4.2 billion. — Karl Angelo N. Vidal