The Philippine government has embarked on an initiative to insure state assets, with an initial value of PHP800 billion, under the newly implemented National Indemnity Insurance Program (NIIP).
This program, which commenced at the beginning of 2024, is designed to provide comprehensive insurance coverage for crucial government assets and enhance the country's financial resilience against disasters.
According to a report from The Philippine Star, the pilot phase of the NIIP encompasses around 132,862 Department of Education school buildings across the nation, collectively valued at over PHP800 billion. The Bureau of the Treasury has financed the premium for this pilot phase using the excess payout from a catastrophe bond.
Finance Secretary Benjamin Diokno emphasized the importance of protecting state assets to ensure the safety and effectiveness of government projects.
Rosalia de Leon, a member of the Monetary Board and former national treasurer who played a pivotal role in developing the NIIP, pointed out the necessity of such measures due to the Philippines' high susceptibility to natural disasters. The program is seen as a step towards enhancing the country’s ability to recover swiftly from such events.
Sharon Almanza, the current national treasurer, commended the Government Service Insurance System (GSIS) for its assistance in devising suitable strategies to safeguard government assets against unexpected losses.
The NIIP, insured by GSIS, is geared towards shielding government finances from the financial impact of disasters like typhoons and earthquakes and ensuring availability of funds for post-disaster reconstruction.
The NIIP diverges from traditional single-asset insurance approaches by adopting a portfolio strategy, which allows for the distribution of risk and optimization of the premium budget.
As per legal requirements, GSIS is responsible for providing insurance coverage to all government assets and properties that hold insurable interest. GSIS's insurance offerings include a wide range of coverages, such as fire, engineering, marine hull and cargo, aviation, bonds, motor car, personal accident, contractor’s all risks, and comprehensive general liability insurance.
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