• Insurance system eyed for areas prone to calamities


    The country needs three levels of protection to make it resilient to natural calamities and climate change perils, Finance Secretary Cesar Purisima said during a panel discussion during the Euromoney Philippines Investment Forum held on Tuesday.

    The first level of protection, according to Purisima, is an insurance mechanism at the grass roots level, particularly disaster insurance for small businessmen.

    The Finance chief cited for example the case of areas hit by Super Typhoon Yolanda, wherein many businesses lost their capital and faced the challenge to start their operations without the aid of insurance.

    “Insurance mechanism for individual businesses is also important. That is something we are working on with the GFIs [government financial institutions]and other entities to see what kind of government support will be needed to make this viable,” he said.

    Purisima said that the second level of protection needed against climate change is the pooling of resources among local government units (LGUs).

    “Each LGU has a disaster relief budget. So in terms of pooling, we are looking into insurance mechanism, so that those that are affected will have the access to the resources of all the LGUs across the country,” he explained.

    However, Purisima admitted that the government is still looking at how to implement the mechanism, noting that it can be a simple “paluwagan” system or an insurance system.

    “That is why we are going to sit down with the GSIS [Government Service Insurance System] to see what their ideas are. But clearly, there is a need to pool these funds,” he explained.

    “Therefore, we need a mechanism that will allow the flow of these funds from those who are not affected to those who are affected,” he added.

    Purisima said that the third level of protection needed by the country against natural calamities is a fund that will help the country manage the extremes of climate change.

    “The highest level is which will require more money is really a fund that will make the country more resilient to natural calamities and climate change peril,” he said.

    The Finance chief said that this includes helping those who are vulnerable to move from the low-lying areas to less vulnerable areas.

    “One of the things that we need to do is move those who are vulnerable. In Metro Manila, there is an estimated 650,000 informal sectors that are in high risk zone,” he said, adding that to deal with weather extremes, the government must put up infrastructure such as dams for flooding and irrigation for agriculture.

    “Infrastructure will require funding and that what we have to figure out . . . how to fund it. We are looking at all the options,” he said.


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