November 8th, 2022
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) says that the country’s agriculture system is “immensely riskier” than the global average, emphasizing the need for broader crop insurance coverage in the country’s “climate-vulnerable” agriculture sector.
“According to the insurance giant Swiss Re, damage by natural disasters affected by climate change accounts for loss of 0.3% of global GDP every year. In the Philippines, that number is 7%. So, the country’s agri sector is 23 times riskier than the global benchmark,” Salceda said,
Salceda cited data from the Philippine Statistics Authority which indicates that from 2010 to 2019, annual agricultural damage due to disasters averages P29 billion every year, or around 7% of the total value of agricultural output.
“Without some sharing of risks, private agricultural insurance would be too expensive, and farmers may choose not to get insured at all despite very high likelihood of some damage due to natural events,” Salceda said.
To address these issues, Salceda authored and sponsored today House Bill No. 666, making amendments to the charter of the Philippine Crop Insurance Corporation (PCIC).
“To lower insurance costs for farmers, increase coverage, and improve the performance of the Philippine Crop Insurance Corporation, I propose making certain amendments to the PCIC charter.”
Salceda proposed deleting the word “qualified” from the charter to expand agricultural insurance to more than just low-income farmers, since agricultural risks “also affect commercial farming.”
Salceda also proposed expanding crop insurance coverage to “all agricultural commodities” beyond the narrowly explicit provision for “rice and corn” under the current PCIC charter. The House tax panel chair also proposed the inclusion of explicit mention of “reinsurance” as an activity the PCIC can undertake.
“Expanding its scope to include “all agricultural commodities” beyond just palay and corn will allow the PCIC to expand its high-value crop insurance and aquaculture insurance programs, as well as the rest of the agricultural value-chain, consistent with the spirit of the Agri-Agri Reform Act amendments (RA 11901) which included as modes of compliance (1) investing in shares of the PCIC and (2) insurance to farmers,” Salceda explained.
“The ability of the PCIC to provide reinsurance could help expand the private agri insurance market and lower costs of private agri insurance by reducing some of the risks that private insurers have to cover,” Salceda added.
Upon Salceda’s motion along with other members, duly seconded by members of the Committee on Privatization and Government Enterprises, Salceda’s bill along with other similar bills were approved for consolidation into a committee report.
The Committee is chaired by Paranaque Representative Edwin Olivarez, whom Salceda thanked for expeditiously approving the measure.