MANILA, Philippines — To better serve farmers, the Department of Finance (DOF) is backing up moves in Congress to change the charter of the Philippine Crop Insurance Corp. (PCIC) in order to convert it into a reinsurer or privatize the state-run firm.
“There’s a plan to transform the PCIC into a reinsurer instead of competing with the private sector as an insurer. So once this takes effect, then private provision of farmers’ insurance will become more competitive,” DOF Undersecretary and chief economist Gil S. Beltran told reporters this week.
Beltran noted that bills aimed at converting the PCIC into a reinsurer were pending in both the Lower House and the Senate.
The DOF official expressed optimism that the measure can still be passed within the last three weeks of sessions of the 17th Congress.
According to Beltran, the PCIC covers only less than 1 million farmers.
Right now, [the PCIC] shut out the competition. If somebody is offering a subsidized product and the private sector offers a fully costed product, who do you think the people will go to? That’s unfair competition. Let the private sector provide the product and let the PCIC play a more active role as a reinsurer to diversify the risk,” Beltran said.
Even as private firms would sell their products to farmers, this would not result in higher costs amid competition, Beltran said, adding that “sometimes the private sector offers better protection.”
The PCIC may also instead be privatized, according to Beltran. (Editor: Mike U. Frialde)