Philippines, Asean join disaster risk insurance facility

MANILA, Philippines — Member countries of the Association of Southeast Asian Nations (ASEAN) including the Philippines are joining Japan in the establishment of a disaster risk insurance facility to build the financial resilience against climate and disaster risks.

Finance Secretary Carlos Dominguez made the assurance to Japan Deputy Prime Minister and Finance Minister Taro Aso of the country’s commitment to sign the memorandum of understanding on the establishment of the Southeast Asia Disaster Risk Insurance Facility (SEADRIF).

The agreement is scheduled to be signed when ASEAN finance and central bank deputies hold their regular meeting with their East Asian partners Japan, South Korea, and China in Fiji this month.

Dominguez said the Philippines would “definitely sign up” to join SEADRIF as the country is already familiar with this type of insurance facility.

 “We are already doing the parametric insurance with the World Bank so we are quite familiar with this, and we will definitely sign the MOU in Fiji,” Dominguez told Aso.

The Philippines successfully placed on the international market last December its parametric insurance policy with a maximum cover of P20.49 billion that can provide quick liquidity to national and local governments.

This program provides coverage for national and local government assets against natural calamities, including public elementary and high schools in 25 disaster-prone provinces in the country’s eastern seaboard.

Japan earlier urged the Philippines to be part of SEADRIF during a bilateral meeting held on the sidelines of the Annual World Bank-International Monetary Fund Spring Meetings in Washington last month.

 “I hope you can consider signing the MOU at the ASEAN Plus 3 meetings to be held in May. I raised this issue because six countries Cambodia, Indonesia, Laos, Myanmar, Singapore and Japan have already signed to this MOU and this is insurance against natural disasters,” Aso said during the meeting.

During the ASEAN Plus 3 Finance and Central Bank Deputies Meeting last December, Japan, Singapore, Cambodia, Indonesia, Myanmar and the Lao People’s Democratic Republic (PDR) signed an MOU on the establishment of SEADRIF.

The first product of this facility, which was formed with technical support from the World Bank, is the establishment of a regional catastrophe risk insurance program for Lao PDR and Myanmar.