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The state-run Philippine Crop Insurance Corp. (PCIC) is placing its trust in the next crop of lawmakers in the 20th Congress for the extension of its charter and an increase in its annual budget, as the insurer strives to cover more farmers under its insurance program.
PCIC, the implementing agency of the government’s agricultural insurance program, was established on June 11, 1978, by virtue of Presidential Decree (PD) No. 1467.
It is tasked to provide insurance protection to farmers against losses caused by natural calamities, plant diseases, and pest infestation, among other agricultural threats.
PD No. 1467, signed by former president Ferdinand Marcos Sr., provided the agency with a 50-year legal existence. It is set to expire in 2028, or during the final year of the former president’s son and namesake, President Ferdinand Marcos Jr.
As if going full circle, the PCIC will rely on a Marcos to keep its existence going in pursuit of providing much-needed assistance to the agriculture sector.
PCIC President Jovy Bernabe told reporters last week that the agency is already garnering support from lawmakers who expressed commitment to back the proposed 25-year charter extension.
Since the existing charter is “already sufficient” given the power it provides to the PCIC Board, the insurer is only seeking an extension.
PCIC, however, is aiming for a more drastic increase in its funding, to the tune of an additional ₱1 billion, to further expand its insurance program as early as next year.
Bernabe said the agency has been working with an annual budget of ₱4.5 billion over the past four years.
An increase in funding will enable the PCIC to cover 600,000 more farmers and fisherfolk.
Of the amount, 60 percent will go to rice farmers, 20 percent to corn, with the remainder distributed among high-value crops, fisheries, aquaculture, and livestock.
This will bring the total insured populace to 4.8 million, up from the 4.2 million it covered last year.
PCIC, which was transferred to the Department of Agriculture (DA) last year after becoming an attached agency of the Department of Finance (DOF), said the DA has been supportive of its request for extra funding.
Nonetheless, the agency said its clamor will hinge on the fiscal space that will remain available for the deliberations of the General Appropriations Act (GAA) in the coming months.
“I understand it depends on the decision of the Office of the President and the DBM (Department of Budget and Management), and Congress, on what fiscal space is available,” said Bernabe.
Bernabe said the PCIC is hopeful that the government will approve its request, as its fund utilization rate has consistently been at 100 percent for nearly two decades.
In the meantime, he said the insurer will continue to tap local government units (LGUs) and their commercial clients for increasing their financial capacity.
Long-overdue reforms
In 2022, a World Bank study flagged the PCIC over its inadequate coverage, as only a third of the country’s farmers were found to be insured by the agency.
The PCIC’s insurance products were questioned for not being suitable for the majority of farmers, as well as its paid claims which are often paid late.
The PCIC has since taken on sweeping reforms to ensure that farmers nationwide benefit from the government’s insurance program.
Recently, it has been harnessing satellite-based mapping to reduce the average time for claims processing from 20 days to just 10, except in cases involving calamities.
“Going to far-flung areas takes time, but if there are satellite images taken by PCIC, we can just use that and make an estimate in the claims,” noted Bernabe.
Bernabe said opting out of ocular visits to physically estimate affected areas will help the insurer save more money.
“If we are saving a lot, our savings will now go to more farmers being insured…we will be able to expand our coverage,” he added.
This technology is currently implemented in 200,000 hectares—or 20 percent—of the two million hectares covered by PCIC.
To further cut processing time, Bernabe said they are preparing to fully automate the entire process of insurance claims.
