Tuesday, August 14, 2012

PH reviving call for Asian calamity insurance fund

The Philippines will revive a proposal to put up a pooled insurance facility that different countries in Asia can tap in times of calamity, the Department of Finance said on Monday.

"We proposed that to the World Bank two years ago, that all countries be asked to be part of a mandatory insurance pool," Finance Secretary Cesar Purisima said on the sidelines of a Senate hearing on the proposed 2013 national budget.

"The insurance premium will be based on each country's share of the carbon footprint. If a country gets hit by a catastrophe, they can draw down on that fund," he said.

In pushing for this pooled insurance, the Philippines is coordinating with Japan and other Asean member-countries, which have been “supportive,” Purisima said.

“But obviously it needs to continue to gain traction. No one's committed yet, but it's an idea that's out there that I think should be considered as we face more disasters," he said.

This will be apart from the Chiang Mai Initiative, a mutual assistance scheme whereby members of Asean, Japan, China and Korea contribute to a fund, which participating countries can tap in times of financial crisis.

Purisima said the Philippines has been pushing for a regional calamity insurance scheme since the country endures more than 20 typhoons a year, heavy rainfall during the second half of the year causing floods and landslides, and even earthquakes.

"We will continue to study the viability of this. It has to be the initiative of many countries, since the concept of risk-sharing must be among different countries," he said.

"We are continuing to explore other financial instruments to help us deal with financial risks brought by natural disasters," he added.

Last week, a wide swathe of Luzon including Metro Manila were inundated by floods brought by monsoon rains. The National Disaster Risk Reduction and Management Council estimated the cost to infrastructure at P596 million, and that to agriculture at P19.5 million as of August 12.-Interaksyon (Ausgust 13, 2012 4:29PM)

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