By Reicelene Joy N. Ignacio, April 23 2019; Business World
https://www.bworldonline.com/calamity-insurance-of-over-p20b-for-quake-hit-provinces/
Image Credit to Business World
THE national government has sufficient insurance cover to rebuild from the earthquakes that hit parts of Central Luzon on April 22 and Samar Island yesterday, and is awaiting more concrete estimates from agencies in the field, the Bureau of Treasury (BTr) on Tuesday.
“We have parametric insurance in place. ‘Yung ₱2 billion (was) insured with the GSIS [Government Service Insurance System] tapos nire-insure ng GSIS sa World Bank. ‘Yung World Bank nireinsure sa market, kasama yung Zambales (The ₱2 billion we paid for GSIS insurance which GSIS reinsured with the World Bank, which reinsured on the market. The coverage includes Zambales,” Rosalia V. De Leon, National Treasurer, said in a phone interview.
Parametric insurance is a type of catastrophe coverage that typically applies to infrequent events like earthquakes.
In December, the Department of Finance said that the government paid premiums of P2 billion from the National Disaster Risk Reduction and Management Fund as provided for in the 2018 General Appropriations Act (GAA). The premiums pay for catastrophic risk cover for 25 provinces.
The maximum cover provided by the insurance is P20.49 billion, which can provide the government readily-available liquidity which can be disbursed to local governments.
The provinces covered are: Albay, Aurora, Batanes, Cagayan, Camarines Norte, Camarines Sur, Catanduanes, Cebu, Davao del Sur, Davao Oriental, Dinagat Islands, Eastern Samar, llocos Norte, Ilocos Sur, Isabela, Laguna, Leyte, Northern Samar, Pampanga, Quezon, Rizal, Sorsogon, Surigao del Norte, Surigao del Sur and Zambales.
On Monday, a 6.1 magnitude earthquake hit Luzon, with its epicenter at Zambales. It was felt by nearby cities and provinces including Metro Manila. The earthquake damaged some infrastructure including Clark International Airport and collapsed a supermarket in Pampanga. It is reported to have killed eight people.
On Tuesday, another earthquake of magnitude 6.5 hit Eastern Samar.
Ms. De Leon said payouts will be triggered when damage reaches certain levels, adding, “We have requested GSIS para magpa-calculate. Dadaan iyon sa isang calculating agent, makikita whether ‘yung trigger parameters, na-trigger, so ‘pag na-trigger iyon automatically mare-release ng funds for that specific area (We have requested GSIS for calculations… Those calculation will go through a calculating agent who will determine whether the trigger points have been reached, and if they are, automatically funds will be released for that area),” Ms. De Leon said.
Ms. De Leon also said that aside from insurance, the President’s calamity fund can also be tapped.
“Definitely, pwede naman later on sa calamity fund pa ni Presidente, we just have to wait for the NDRRMC assessment (Definitely, we can tap the calamity fund of the President later on. We just have to wait for the National Disaster Risk Reduction Management Council assessment),” Ms. De Leon said.
Ms. De Leon said that both the national and local governments are sufficiently funded to address the damage.
“Meron namang mga funds na available in order to be able to (address) the requirements for relief operations, both at the local and the national government (level). Sa budget pa lang, meron na tayong calamity fund (We have funds available in order to address the requirements for relief operations both at the local and the national government level. In the budget itself, we have a calamity fund),” Ms. De Leon said.
She said damaged government infrastructure is automatically insured by the GSIS, a requirement for building such projects. — Reicelene Joy N. Ignacio