The Philippines is set to join in May five other members of the Association of Southeast Asian Nations (ASEAN) along with Japan in operating a disaster risk insurance facility that aims to build the financial resilience of countries in the regional bloc against climate and disaster risks.
Finance Secretary Carlos Dominguez III assured Japan Deputy Prime Minister and Finance Minister Taro Aso of the Philippines’ commitment to sign the Memorandum of Understanding (MOU) on the establishment of the Southeast Asia Disaster Risk Insurance Facility (SEADRIF) when the ASEAN finance and central bank deputies hold their regular meeting with their East Asian partners Japan, South Korea and China scheduled in Fiji next month.
Minister Aso had urged Dominguez to make the Philippines a part of SEADRIF during their recent bilateral meeting held on the sidelines of the Annual World Bank-International Monetary Fund (IMF) Spring Meetings in Washington D.C.
“I hope you can consider signing the MOU at the ASEAN Plus 3 meetings to be held in May. I raised this issue because six countries Cambodia, Indonesia, Laos, Myanmar, Singapore and Japan have already signed to this MOU and this is insurance against natural disasters,” Aso said during the meeting.
Dominguez said that with the Philippines already familiar with this type of insurance facility, it will “definitely sign up” to join SEADRIF.
“We are already doing the parametric insurance with the World Bank so we are quite familiar with this, and we will definitely sign the MOU in Fiji,” Dominguez told Aso.
The Philippines successfully placed on the international market in December last year its parametric insurance policy with a maximum cover of P20.49 billion that can provide quick liquidity to national and local governments.
This program provides coverage for national and local government assets against natural calamities, including public elementary and high schools in 25 disaster-prone provinces in the country’s eastern seaboard.
During the ASEAN Plus 3 Finance and Central Bank Deputies Meeting last Dec. 14, Japan, Singapore, Cambodia, Indonesia, Myanmar and the Lao People’s Democratic Republic (PDR) signed an MOU on the establishment of SEADRIF.
The first product of this facility, which was formed with technical support from the World Bank, is the establishment of a regional catastrophe risk insurance program for Lao PDR and Myanmar.
By signing the MOU, the countries agree to collaborate on setting up and operating SEADRIF, which is initially co-chaired by Japan and Singapore.
During his meeting with Aso, Dominguez also mentioned his proposal for the ADB and the World Bank to closely coordinate their efforts in the region to avoid duplication of their functions and thereby improve the efficiency and effectiveness of development assistance delivered to countries in the Asia-Pacific region.
Both Aso and Dominguez represent their respective countries as governors of both the ADB and World Bank.
Dominguez also thanked the Japanese government for “moving very quickly” in providing high concessional loan financing for the Philippines’ “Build, Build, Build” infrastructure modernization program.