A state of calamity declared in Pangasinan’s Dagupan City on Aug. 10, 2026, has activated the Philippine Insurance Commission’s mandatory claims obligations for non-life insurers – placing the industry on a compliance footing at the same time as 20 ports were shut across the country, a presidential work-from-home order disrupted Metro Manila businesses, and nearly 100,000 people were displaced from their homes.
The floods, driven by a southwest monsoon enhanced by two concurrent tropical cyclones, killed at least 12 people, left eight missing, and injured 13 others across 33 provinces, according to the National Disaster Risk Reduction and Management Council (NDRRMC). The Office of Civil Defence confirmed approximately 98,000 displaced persons, with tens of thousands evacuated to government-run emergency shelters.
The City Government of Dagupan declared a state of calamity after 22,047 families – or 90,015 individuals – across 31 barangays were affected, with 23 barangays still flooded and major roads impassable to light vehicles, according to the Philippine Information Agency. That declaration activates IC Circular Letter No. 2025-21 across affected localities. Under Circular Letter No. 2025-21, all IC-regulated entities are required to process, approve, and pay disaster-related claims without delay – including relaxing standard documentary and procedural requirements. The circular also mandates extended submission windows for claim notices, direct claimant support, and coordination with local government units. Brokers with policyholders in Dagupan City should note that compliance with those five obligations is binding from the point of declaration. Additional calamity declarations from other affected provinces would broaden the scope of Circular Letter No. 2025-21’s application further. Brokers should monitor local government announcements across the 33 affected provinces.
The operational footprint of the August 10 event extends beyond the calamity declaration. The Philippine Coast Guard suspended operations at 20 ports across the central and eastern Philippines, as reported by the South China Morning Post. President Ferdinand Marcos Jr. ordered government workers to work from home and directed officials to activate alternative learning arrangements for schools in Metro Manila and more than a dozen provinces. In parts of Metro Manila, floodwaters reached waist height. For brokers placing marine cargo, freight liability, or business interruption (BI) cover, each disruption carries its own claims assessment dimension. Port suspensions may trigger delay or spoilage exposures. The presidential order raises potential applicability of government-action clauses in BI policies, depending on individual policy wordings and the presence or absence of flood or civil authority exclusions.
The August 10 floods arrive in a market where the gap between economic losses and insured losses remains one of the widest in Asia-Pacific. GlobalData estimates the Philippines’ catastrophe protection gap at approximately 98%, compared with a global average of 58%. Aon’s data shows that since 2000, only 12% of economic losses from flooding and tropical cyclones across Southeast Asia have been covered by insurance, leaving an 88% protection gap across a region that relies heavily on self-funding or government assistance for disaster recovery. Michael Ferre Rellosa, executive director of the Philippine Insurers and Reinsurers Association (PIRA), has stressed the importance of adequate catastrophe insurance as the Philippines faces significant exposure to earthquakes, typhoons, and floods. PIRA’s 55 member companies collectively provide 100% of domestic non-life insurance sold in the Philippines, according to the association’s own data.
The IC reported that the country’s insurance penetration rate rose to 2.03% in the first quarter of 2026, up from 1.79% at the end of 2025 – but that improvement is concentrated in the life segment. Life insurance accounted for 80.77% of the PHP 499.23 billion in total premiums paid to the Philippine insurance industry in 2025, while property and catastrophe lines – most directly exposed to flood events – remain a smaller share of the non-life market.
The IC’s own leadership had framed the structural problem before the August 10 floods occurred. Philippine Insurance Commissioner Reynaldo Regalado, addressing the 22nd Asia Nat CAT and Climate Change Conference on June 26, 2026, argued that the pricing, underwriting, and reserving frameworks currently in use were built for a loss environment that no longer exists and called on the industry to act before the next major event rather than after.
The August 10 monsoon floods provide another test of the Philippine insurance industry’s ability to respond to catastrophe risk, following widespread flooding in Luzon in July 2025 that left 30 people dead, according to the NDRRMC. GlobalData projects Philippine general insurance gross written premium will grow at a compound annual growth rate of 10.6%, from PHP 153.8 billion (US$2.7 billion) in 2025 to PHP 229.7 billion (US$3.9 billion) by 2029. Whether that growth materially narrows the protection gap – rather than adding premium volume in segments already covered – is the question the current event poses again. No industry-wide loss estimates had been issued by the IC or NDRRMC as of the time of publication.
