The Department of Finance (DoF), which now oversees the government-owned Philippine Crop Insurance Corp (PCIC), has said that it aims to make the company provide broader coverage and become less reliant on subsidies.
Finance Secretary Carlos G Dominguez III, recently named the chairman of PCIC, said he had met representatives of the PCIC and the Insurance Commission to formulate a blueprint for the company for the next three years
He told PCIC board members that the top priority for the company is to “stop its financial bleeding”, according to a report by Business World.
He was speaking at the first meeting of the reconstituted PCIC board last week. The lead agency overseeing the company prior to 14 September 2021 was the Department of Agriculture (DA). The new PCIC board is chaired by the Finance Secretary while the Agriculture Secretary is vice-chair.
“I trust this board will find the path to sustainability. Our farmers face the increasing likelihood of suffering losses due to severe and erratic weather events caused by climate change. Crop insurance is an effective instrument to mitigate dislocation and economic losses. The PCIC must be there to extend the widest coverage possible,” Mr Dominguez said.
He also pointed out that the PCIC received subsidies totalling PHP23.3bn ($455m) during the past two years, and additional financial support of PHP5.3bn from the Agri-Agra Fund since 2015. Next year, the company is expected to receive PHP4.5bn in budgetary support from the national government. “This trend is not sustainable,” Mr Dominguez said.
“The PCIC’s operations must be sustainable—if not totally subsidy-free. This requires a new business model and the most competent management of this service,” he added.
Aside from expanding its operations, the PCIC should also determine how much the government is losing because insurance coverage is inadequate in the agricultural sector, he said.