Philippines indemnity program covers P800 billion state assets

MANILA, Philippines — An initial P800 billion in state assets will be insured as the government commences its national indemnity program at the onset of the new year.

The Bureau of the Treasury officially implemented the National Indemnity Insurance Program (NIIP) at the start of 2024 in a bid to provide adequate and comprehensive insurance coverage for important government assets.

The program also aims to ensure the country’s financial resilience against disasters.

This year’s pilot NIIP covers some 132,862 Department of Education school buildings nationwide with an approximate value of over P800 billion.

The Treasury covered the premium for the pilot program using the excess payout it received from the catastrophe bond.

Finance Secretary Benjamin Diokno said that safeguarding state assets is crucial to ensure the safety and readiness of the projects delivered by the administration.

Rosalia de Leon, Monetary Board member and former national treasurer who led the NIIP development, said the country’s vulnerability to natural disasters makes it imperative to act and implement solutions that would help the Philippines become more resilient and recover faster.

Current national treasurer Sharon Almanza, lauded the Government Service Insurance System (GSIS) for helping in finding appropriate solutions to protect government assets against unforeseen losses.

Insured by the GSIS, the NIIP aims to cushion government finances from unexpected losses arising from disaster events such as typhoons and earthquakes and ensure access to funding post-disaster for reconstruction.

Unlike the often single-asset insurance purchase, a portfolio approach was taken to spread out the risk and maximize the available premium budget.

Under the law, GSIS is mandated to provide insurance cover to all government assets and properties with insurable interests.

GSIS offers the following insurance coverage such as fire, engineering, marine hull and cargo, aviation, bonds, motor car, personal accident, contractor’s all risks, and comprehensive general liability insurance.