MANILA, Philippines — The Department of Finance (DOF) is pushing to transform the Philippine Crop Insurance Corp. (PCIC) into a reinsurer to encourage the private sector to offer insurance protection to farmers, according to Finance Undersecretary Gil Beltran.
In an interview with reporters, Beltran said converting the PCIC into a reinsurer instead of a direct insurance provider would promote more competition in the private sector and help further develop the crop insurance market in the Philippines.
“There’s a plan to transform the PCIC into a reinsurer instead of competing with the private sector as an insurer. Once this takes effect, the private provision of farmers’ insurance will become more competitive,” Beltran said.
According to Beltran, PCIC is currently shutting out competition in the private sector. “If somebody is offering a subsidized product and the private sector offers a fully costed product, who do you think the people will go to? That’s unfair competition,” he said.
According to Beltran, the PCIC’s would-be role as a reinsurer would also help diversify the risks taken on by the private sector in offering crop insurance.
“Let the private sector provide the product and let the PCIC play a more active role as a reinsurer to diversify the risk. Because microinsurance providers, they are limited to certain areas, and if a typhoon strikes, everything is wiped out,” Beltran said.
Earlier, Beltran said the government wants to increase the number of Filipinos covered by microinsurance to 50 million by 2022. He said one way to do this is to promote farmers’ insurance.
The PCIC is mandated to provide insurance protection to agricultural producers, particularly subsistence farmers, against losses arising from natural calamities, plant diseases and pest infestations.
The state-run corporation offers fully or partially subsidized insurance products to farmers. It also extends insurance packages in coordination with farmers’ cooperatives, agricultural lenders and service providers.