Source: BusinessMirror.
Original article available online.
Makati City, Philippines, August 13 – With help from Germany, the government transitioned from helping put money into the pockets of rural Filipinos to helping them obtain life insurance cover for some of the country’s poorest.
In simple ceremonies on Thursday, the Department of Finance signed an agreement with the German Technical Cooperation Agency (GTZ) that puts to work the Microinsurance Innovation Program for Social Security (MIPSS).
The MIPSS project seeks to provide insurance cover on at least 5 percent of the rural poor as initial goal but aims to expand the coverage to 20 percent over three years.
These are poor but financially viable Filipinos who previously benefited from the government’s microfinance program, but are still lacking life insurance cover, particularly from privately owned insurers whose expensive life policies they can hardly afford.
GTZ country director Jochem Lange said at the briefing his government is helping the Philippines develop strategy that seeks to popularize privately sold insurance policies.
Some 86 percent of Filipinos are covered by the government’s social-insurance program under the Philippine Health Insurance program and hardly any from commercial issuers.
“We first helped rural Filipinos find their financial footing with the microfinance program for maybe 40 years, and now we are helping them obtain financial products they otherwise cannot afford,” the deputy executive director of the Department of Finance-National Credit Council, Joselito Almario, said.
The program is being pilot- tested in Region 13, or the so-called Caraga Region on Mindanao Island, targeting such groups as indigenous peoples and women who have been marginalized by poverty, conflict and social exclusion.
It is hoped, MIPSS program manager Antonis Malagardis said, the local commercial life insurance industry will appreciate the potential presented by the microinsurance business that has proven a commercial success in countries like Brazil or Columbia.
Finance Undersecretary Gil Beltran, who signed the MIPSS implementation agreement opposite Lange, pointed out some 230 rural banks are already engaged in microinsurance sales with very little to show for it at the moment.
But the modest goal of providing initial insurance cover on 5 percent of rural Filipinos and to 20 percent eventually should help establish the commercial potential of the business, Beltran said.
He said the program is the latest government offering under the broad financial inclusion program, where an ever greater number of Filipinos everywhere has some form of participation in the consumption of financial services that in the past typically covered only the well-off Filipinos.
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