DOF seeks WB assistance to insure public assets

The Department of Finance (DOF) said on Thursday it has asked for the assistance of the World Bank in the creation of an insurance structure for Philippine public assets.

In an emailed statement, the DOF said the proposal was pitched by Finance Secretary Carlos Dominguez III to World Bank Executive Director Fabio Kanczuk in a meeting in Indonesia last month.

"We want to develop this strategy in which we can have a way to analyze our risks to decide how much we will take and how much we will pass on to the insurance market, not only for our national government assets but also for assets at the local government level," Domiguez said.

"The Philippine government, Dominguez said, wants to create a national system where various state entities, down to the local government units (LGUs), can rely on a rational structure to evaluate risks and access resources for risk protection and management through a public asset insurance program," the DOF said.

According to the DOF, the government is also planning to work with insurance firm Lloyd's of London and the Citi Group to explore the possibility of trapping reinsurance facilities, as well as accessing the capital markets to obtain financial cover for state assets.

Dominguez noted, however, that formulating a public insurance structure could be an "enormous task" as the country has just started to come up with its registry of national assets.

In terms of natural disasters, the DOF said public and private sector assets are expected to incur P177 billion in losses due to typhoons and earthquakes.

"Ensuring comprehensive and adequate insurance protection for government assets would help shield the fiscal budget from volatile shocks arising from catastrophic events and would also safeguard the government’s long-term development objectives," the DOF said. —Jon Viktor Cabuena/ LDF, GMA News