The Philippines is one of those nations which is extremely exposed to natural disasters and weather risks. From flooding, to wildfires to super-typhoons (like Megi which is currently impacting part of the Philippines) any country so exposed to disasters needs a robust catastrophe reinsurance strategy to help them recover from catastrophes quickly.
The Philippines has an active microinsurance marketplace which is expanding through improvements to regulation and through the introduction of new, parametric weather insurance products. This is helping to provide support to local peoples such as farmers but the current concern is whether the national disaster plan is sufficient.
Interior Secretary for the Department of the Interior and Local Government, Jesse Robredo, today proposed the national calamity fund be pooled along with the local government units calamity funds so that resources can be readily available in the event of emergencies and disasters. He cited other examples of disaster risk pooling around the world.
Robredo said that the merging of national and local funds would allow for the new merged calamity fund to be ‘invested and leveraged in the capital markets through international reinsurance, contingent credit arrangements, or catastrophe bonds.’ He said the merged funds would be independently managed by a third party fund manager who would be accountable to both national and local governments.