Friday, September 22, 2017

Philippines tests parametric scheme for disaster-prone provinces

The Philippine government, through the Department of Finance, has allocated Php1 billion (US$20 million) to an insurance fund for disaster-prone provinces.

The fund will be made accessible to provinces affected by natural calamities, said assistant secretary of finance Paola Alvarez.

The fund was established under the government’s Parametric Insurance Pilot project.

Among the identified provinces are Cebu, Laguna, Leyte, Pampanga, Davao, Samar and Batanes.

The fund allocation followed a series of discussions early this year on whether the Philippines would benefit from mandatory disaster-risk insurance for all local government units as an effective tool to improve the country’s resilience against disasters.

Unlike traditional indemnity insurance that takes a long time to assess and process, the parametric scheme will have quick-disbursing payouts whose amounts will depend on estimated loss triggers determined through the Philippines’ Catastrophic Risk Model developed by the Department of Finance in 2014, Alvarez said.

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