THE management of the Philippine Crop Insurance Corp. (PCIC) is set to present its financial status and computation of contingent liabilities before its newly-reorganized board of directors.
Finance Secretary Carlos G. Dominguez III, who now chairs the reconstituted PCIC Board, said he has ordered the management of the government-owned and government-controlled corporation’s (GOCC) to report on October 7. The chief of the Department of Finance (DOF) said the information to be presented during Thursday’s Board meeting should include an outline on how the PCIC should be managed and initial ideas about possible reinsurance coverage.
Moreover, the PCIC management is also expected to present expansion of the insurance coverage to include more crops and how PCIC can provide parametric insurance compared to its current policies.
Apart from stanching the firm’s financial hemorrhage, Dominguez said during the new Board’s first meeting last September 24 that their immediate task include reorganizing the corporation and determining how the GOCC “can provide better insurance coverage to Filipino farmers.”
The DOF chief said he has since pointed out that for the past two decades, the PCIC has been heavily reliant on subsidies from the national government, which has amounted to over P23.3 billion.
In addition, the PCIC received P5.3 billion from the Agri-Agra Fund since 2015. About P4.5 billion is being proposed as a subsidy to the PCIC for 2022.
Dominguez said he expressed concern this “trend is not sustainable.” He added he also urged the board to find ways “to ensure that the Filipino farmers—PCIC’s primary stakeholders—get the most value for their money from the insurance premium subsidy being received by the PCIC from the national government.”
Board Member Rolando L. Macasaet also suggested that the PCIC look into the possibility of adopting Philippine Financial Reporting Standards 4, which covers insurance contracts, so that the GOCC can properly prepare its financial statements.
The new Board is now composed of the following: Dominguez as chairman; Agriculture Secretary William D. Dar as vice-chairman; and, PCIC President Jovy C. Bernabe, Land Bank of the Philippines (LandBank) President-CEO Cecilia C. Borromeo and Macasaet, president and general manager of the Government Service Insurance System, as members.
One representative each from the private insurance industry and the subsistence farmers’ sector (preferably representing agrarian reform beneficiaries, cooperatives and/or associations) have yet to be appointed to complete the composition of the 7-person body.
Given the new composition of the PCIC board of directors, the Board also reconstituted its Committees on Governance and on Audit and Risk Management.
Dominguez earlier said the PCIC should provide increased insurance coverage to farmers with lower premiums, while determining how much the government is losing because of the lack of adequate insurance coverage in the agricultural sector.
He added that the PCIC should engage the services of an actuary accredited by the Insurance Commission in performing the valuation of its actuarial reserve liabilities.
Through the issuance of Executive Order (EO) 148, President Duterte reorganized the Board of Directors of the PCIC and transferred its attachment from the Department of Agriculture to the DOF.
The EO said the move would “ensure that its operations are rationalized and monitored centrally in order that government assets and resources are used effectively and the government’s exposure to all forms of liabilities, including subsidies is warranted and incurred through prudent measures.”