The Philippines' Department of Finance (DOF) and the SEADRIF Insurance Company have established a collaborative framework to strengthen the country's financial resilience against disasters and climate risks by scaling up insurance initiatives. Key priorities towards this goal are outlined in a joint work plan.
Consistently ranked amongst the most vulnerable to climate and disaster shocks, the Philippine government has been proactive in improving its resilience to disasters. In line with its Disaster Risk Financing (DRF) strategy, the Philippines has implemented several innovative financial instruments, such as Asia's first subnational parametric insurance program and the region's first sovereign catastrophe bond. Despite these achievements, challenges such as scarcity of specialist skills and the complexity of engaging international insurance markets have slowed progress. SEADRIF, an ASEAN+3* initiative was set up to support members with exactly these types of challenges, providing technical support and financial products to enhance the region’s financial resilience against climate and disaster risks.
Under the work plan, the DOF, together with key implementation agencies such as the Bureau of the Treasury (BTr) and the Government Service Insurance System (GSIS), have identified several priority programs aimed at further strengthening the government’s capacity and addressing barriers in DRF, and improving financial protection for critical public assets. Among these initiatives are enhancements to the National Indemnity Insurance Program (NIIP) and the National Asset Registry System (NARS).
The DOF welcomed SEADRIF's support for BTr and GSIS in strengthening the implementation of NIIP, including the expansion of coverage to hospital buildings and equipment as well as ensuring the efficient use of international reinsurance and service providers. Exploratory work is under way to add parametric insurance to the existing NIIP as a hybrid product that provides quick liquidity for critical service restoration and continuity as well as financing reconstruction.
The government also recognizes the critical role of data in the effective implementation of DRF programs. While asset information has often been decentralized and not well maintained, the government has been working towards centralizing asset data though the NARS. More recently, the Department of Finance and Department of Science and Technology had announced their collaboration to link NARS data to GeoRiskPH–the government’s disaster risk data portal. With this development, SEADRIF looks forward to assisting the government in the development of tailored risk analytics that aid policymaking on risk finance and insurance design.
“Our joint work plan sets out key activities to help accelerate the government’s efforts in this space. This demonstrates the mandate SEADRIF was given by our members to complement their domestic capabilities to strengthen financial resilience. Technical expertise, transaction advisory, and financial products all must be aligned on this journey. We value our growing partnership with the Government of the Philippines, a long-standing global champion for enhanced financial resilience,” Benedikt Signer, SEADRIF Insurance Company’s Executive Director and Board Member, shared.
*ASEAN+3 comprises Southeast Asian countries plus the People’s Republic of China, Japan, and the Republic of Korea.