WB, gov’t eye deal for insurance scheme

The World Bank (WB) is working with the government to develop an insurance and risk-transfer mechanism for national and local governments, businesses and even individual households to help them deal with natural disasters. 

“The idea here in the Philippines is to create a new disaster-risk financing strategy. This would supplement a $ 500-million line of credit,” Rachel Kyte, WB vice president and special envoy for climate change, said.

The bank has provided the Philippines a $500-million contingent line of credit to help the country’s preparedness against natural disasters and reduce Filipinos’ vulnerability to the impact of these calamities.

The Philippines was the first country to take advantage of the credit facility.

Kyte noted that building upon the contingent credit facility, the multilateral development bank has been discussing with the Philippine government about ways to improve financial resilience of the country following the series of weather-related disasters, including Supertyphoon Yolanda (international code name Haiyan).

“There has been a dialogue between us and the government together with the private sector for the last 18 months…. We are looking at a possibility of a market-based catastrophe risk transfer transaction,” she said.

Kyte underscored the need for the Philippines to build its financial resilience to support growth.

“In order for Apec (Asia Pacific Economic Cooperation) economies to be able to sustain that prosperity and growth, we have to be able to invest in resilience. Resilience is necessary in order to withstand the shocks that will come from the climate change,” she added.

Apec Finance Ministers recently unveiled here the Cebu Action Plan (CAP), a 20-year roadmap for reforms for the Asia-Pacific region.

The four-pillar CAP covers enhancing financial resiliency, advancing fiscal reforms and transparency, promoting financial integration and accelerating infrastructure development and financing. PNA