Return of PCIC to DA sought

MANILA, Philippines — The Department of Agriculture (DA) is seeking to bring back the Philippine Crop Insurance Corp. (PCIC) under its supervision to harmonize its operations aimed at better food production and security.

The DA is requesting to have PCIC back under the agency’s management for a harmonized implementation of insurance in the agriculture sector, DA Assistant Secretary and spokesperson Rex Estoperez said in an interview with reporters.

He said the DA’s request is under consultation at the Cabinet level.

Indemnification under PCIC was also among the issues raised during a consultation with agricultural stakeholders through Philippine Council for Agriculture and Fisheries (PCAF) last Thursday, Estoperez said.

In September 2021, then president Rodrigo Duterte issued Executive Order   148 transferring the PCIC from the DA to the DOF as an attached agency “for policy and program coordination and general supervision.”

The PCIC board was also reorganized under EO 148 with the DOF secretary as chairperson and the addition of the general manager of the Government Service Insurance Corp. (GSIS), reducing the farmers’ representative from three to just one.

At that time, then Agriculture secretary William Dar allayed the fears on the transfer of the PCIC, saying the agriculture sector is assured of continued and strong support from the reconstituted PCIC board as four members represent their interests, namely the: DA secretary; president of the Land Bank of the Philippines; PCIC president; and a representative of farmers’ groups.

Based on a study by World Bank’s Disaster Risk Financing and Insurance Program (DRFIP), the PCIC’s approach to agricultural insurance at that time “neither provides value for money to taxpayers nor adequate protection to farmers.”

The PCIC is also “very exposed to catastrophe losses which are not reinsured.”

The study further showed that while premium subsidies given by the government to the PCIC grew rapidly over the years, agricultural insurance has only reached one-third of the country’s farmers and is not well-targeted to ensure that taxpayers are getting value for their money.

The study also found that PCIC’s premium rating, capital management, financial reporting, and other aspects of its operations are not in line with international best practices.

PCIC’s insurance products are also not suitable for majority of Filipino farmers, especially for small subsistence holders and growers, according to the World Bank study.