THE country’s first agricultural co-insurance pool is expected to be launched five months before the May 2028 elections.
This was announced by Agriculture Assistant Secretary Arnel V. De Mesa after the creation of the insurance pool has been approved by the Cabinet-level Investment Coordination Committee.
De Mesa said during the Philippine Insurance Summit the the project, part of an $873-million World Bank initiative is scheduled for a Cabinet Committee review on June 25 and is expected to receive approval from the World Bank’s Board of Directors on October 8.
The World Bank project aims to increase access to credit and insurance for agri-MSMEs, farmers and fisherfolk towards higher firm productivity and resilience to climate shocks.
“Right now, we’re almost there for the creation of the agri-insurance pool,” De Mesa said last Wednesday. “We’re hoping that the private sector [and] the private insurers, are ready to partner with us in the government.”
He said insurance reduces risks, improves climate resilience and unlocks potential for farmers to adopt better technology and have high-quality farm inputs. An insurance pool combines funds by investors to share financing risks.
The Department of Agriculture will provide policy leadership and stewardship, while the Philippine Crop Insurance Corp. (PCIC) and the Philippine Insurers and Reinsurers Association (Pira) will manage the pool, De Mesa explained.
Israel Q. Dela Cruz, PCIC’s business development and marketing manager, told the BusinessMirror that more than 25 insurers expressed interest in joining the pool and are participating in the sub-committee meetings.
World Bank will shell out $70 million for the co-insurance pool to finance a first loss for the co-insurance pool, partially support the insurance premiums of select uninsured farmer segments and the startup and operating costs of the pool manager.
Dela Cruz said more than 60 percent of the agriculture sector remains uninsured, and the insurance pool will close this gap.
De Mesa echoed the same sentiment, noting that the majority of PCIC’s insurance coverage is for rice and corn farmers, while coverage for livestock and fisheries is only about less than 1 percent.
“There’s a lot of room for improvement to cover the needed insurance of our farmers and fisheries,” he added.
Agriculture Undersecretary Asis G. Perez said agricultural risks are evolving faster than traditional insurance systems.
“The risks are larger, shocks are more frequent, and the capital required to absorb what we call in insurance terms, catastrophic losses, is becoming greater than what any single institution, public or private, can bear on its own,” Perez said in his speech during the summit.
Insurance pools, Perez noted, organize risks and transform uncertainty into insurable structure. “It changes access to insurance. It changes investors’ confidence. And ultimately, it changes the willingness of the market.”
“Together, we can build a system where agricultural risk is managed more scientifically, financed more sustainably and safe for the people. A system that gives farmers not only protection after a disaster, but more importantly, confidence before any perceived disaster,” Perez added.
