The World Bank has commended the Philippines for being among the world’s advanced economies in terms of developing viable solutions for disaster risk financing, according to the Department of Finance (DOF).

DOF Assistant Secretary and Spokesperson Paola Alvarez said World Bank officials also expressed willingness to assist the Philippines as chair of the APEC Working Group on Disaster Risk Financing Solutions during the group’s recent meeting in Hoi An, Vietnam.

This APEC working group is chaired by the Philippines through the DOF, which called the meeting to discuss the terms of reference and work plan on disaster risk finance for 2018, Alvarez said in her report to Finance Secretary Carlos Dominguez III.

Alvarez said “all the economies present recognized that disaster risk financing and insurance is a very important and timely topic given the new norm of growing intensity of disasters.”

“They recognized that there are a lot to learn in terms of disaster risk mitigation in order to lessen economic losses due to disasters,” she said in her report.

She told Dominguez that present at the meeting were representatives from the United States, Indonesia, Vietnam, Peru and New Zealand, who all expressed their support for, and participation in, the Working Group.

Besides the World Bank, officials of international organizations such as the Asian Development Bank (ADB), Organization for Economic Cooperation and Development (OECD) and the APEC Business Advisory Council (ABAC) were also at the meeting, she said..

“Japan, which was also present, likewise expressed support to the Philippines by agreeing to be the co-chair of the Group,” Alvarez said.

Alvarez said the representatives from Thailand and Chile expressed their willingness to join the Philippines-led Working Group, with Chile raising the possibility of also inviting its Pacific Alliance co-members—Mexico and Colombia.

She said Indonesia has expressed the desire to integrate disaster risk financing into its financial policies, along with its interest in learning the experiences of member-economies in the Working Group.

The ABAC, meanwhile, offered its support to promote the role of the private sector in implementing disaster risk financing and insurance solutions, particularly on micro-insurance, Alvarez said.

For its part, the OECD suggested that the Working Group tackle the “interrelationship of fiscal policies and disaster risk reduction and management,” Alvarez added.

The next meeting of the Working Group is tentatively scheduled in the first quarter of 2018 in Papua New Guinea, she said.

The Philippine government recently launched a P1-billion insurance fund that will enable 25 disaster-prone provinces to act faster and better respond to the devastating impact of natural calamities.

Alvarez said the insurance fund, available through the Parametric Insurance Pilot project, will provide typhoon and earthquake insurance support to the provinces covered by the project, including the typhoon-vulnerable provinces of Batanes and Albay and the quake-hit province of Leyte.

Unlike the traditional indemnity insurance that takes a long time to assess and process, the Parametric Insurance Pilot will have quick-disbursing payouts whose amounts will depend on the estimated loss triggers determined through the Philippines’ Catastrophic Risk Model developed by the DOF in 2014, Alvarez said.

With assistance from the World Bank, the project covers local government units (LGUs) including the provinces of Aurora, Cagayan, Camarines Norte, Camarines Sur, Catanduanes, Cebu, Davao del Sur, Davao Oriental, Dinagat Islands, Eastern Samar, Ilocos Norte, Ilocos Sur, Isabela, Laguna, Northern Samar, Pampanga, Quezon, Rizal, Sorsogon, Surigao del Norte, Surigao del Sur and Zambales.

The potential beneficiary-LGUs can avail themselves of the insurance cover in the event of a catastrophic earthquake or typhoon from the Government Service Insurance System with coverage fully ceded to the international reinsurance market, thus minimizing risks for the government.

The Pilot, consistent with the Philippines’ Disaster Risk Financing and Insurance Strategy, is effective for one year starting last July 28, 2017.

This project fulfills part of the expected outcomes of the National Disaster Risk Reduction and Management (NDRRM) Plan 2011-2028.