Gov’t eyes insurance against calamities

The government is considering availing itself of an insurance plan that will ease the financial burden brought about by relief and reconstruction activities following calamities.

Since the Philippines is prone to natural disasters, National Treasurer Rosalia de Leon said that talks were ongoing on how the government could insure itself against the huge cost of recovery in the aftermath of disasters.

De Leon said the government has tapped the assistance of the World Bank in developing a protection scheme against the financial drag of post-calamity recovery.

“We are currently working with the World Bank in developing a catastrophe risk model. This model will enable the Philippine government to evaluate options for risk transfers and insurance that will reduce the fiscal burden of relief and reconstruction efforts,” De Leon said.

She added that the latest natural calamity to hit the country highlighted the need for smart financial strategies that would help the country bounce back after disasters.

“Initiatives are underway to mitigate risk exposure and strengthen fiscal resilience in times of calamities,” De Leon added.

Supertyphoon “Yolanda,” which struck the country earlier this month, was said to be one of the strongest typhoons to hit the planet.

The hardest hit regions were Central, Western and Eastern Visayas, which together accounted for 20 percent of the country’s population and about 12.5 percent of the Philippine economy.

According to the latest count, the death toll resulting from the calamity has exceeded 5,000.

Also, growth of the Philippine economy is expected to slow down to 4.1 percent in the fourth quarter due to the resulting damage to public infrastructure, agriculture and property as well as loss of sources of incomes.

In the first semester, the Philippines, together with China, registered the fastest growth rate in Asia of 7.6 percent. The Philippines was expected to have sustained the economic growth above 7 percent in the third quarter.

Due to the latest calamity, the government now expects the Philippines to register a full-year economic growth ranging from 6.5 to 7 percent. Previously, the growth projection was 7.3 percent.

The latest forecast, however, was still within the official target of 6 to 7 percent.

Efforts to develop an insurance scheme against the cost of post-calamity recovery come as the government drafts a short- and medium-term rehabilitation and reconstruction plans for areas devastated by “Yolanda.”

The short-term plan, which will be out this week, is expected to include the restoration of electricity and water facilities as well as the provision of financial assistance and livelihood activities for the victims.

The medium-term plan is expected to provide details of reconstruction of public infrastructure damaged by the typhoon.