The Philippines, with the help of World Bank (WB), is raising through $225 million through catastrophe-linked (CAT) bonds to raise funds for responses to natural disaster like quakes and storm, according to National Treasurer Rosalia V. de Leon on Monday, Nov. 25.
De Leon told reporters that the CAT bonds were listed on the Singapore Stock Exchange Monday morning.
According to De Leon, the Bureau of the Treasury’s excess income will be used to pay the bonds’ premium.
In a separate statement, WB said the CAT bonds were issued in two tranches—$150 million for losses from tropical cyclones, on top of $75 million in protection for losses from earthquakes.
WB said the bonds were issued through the International Bank for Reconstruction and Development’s “risk notes program.”
Funds from these, WB said, “can be used to transfer risks related to natural disasters and other risks from developing countries to the capital markets.”
“Payouts will be triggered when an earthquake or tropical cyclone meets the predefined criteria under the bond terms,” WB said.
The three-year bonds were settled last Friday, Nov. 22, and will mature on Dec. 2, 2022.