The Philippines is highly dependent on the agribusiness sector, which employs close to one third of its workforce and takes up to 40% of the country’s land. The country and the agricultural sector are also highly vulnerable to climate risks; it is ranked among the world’s highest disaster prone countries, and it is ranked the 3rd most disaster prone country in the world, experiencing multiple typhoons a year. These natural events cause significant damage to farms and the assets of small-holder farmers. The high risk of typhoons is one of the main reasons why most banks are unwilling to extend credit to the sector. To address typhoon-related risks faced by both lenders and farmers, in 2014, GIIF started supporting an IFC project with CARD-Pioneer Microinsurance Inc (CPMI), a joint venture between CARD and Pioneer Insurance, in developing, pricing and deployment of the country’s first private-sector led crop insurance product, named Binhi (“seed”). The goal was to bring in technical support from IFC, through actuarial experts, to analyze historical agricultural damage and weather data, to develop a risk-pricing system that would ultimately allow CPMI to strategically manage its typhoon risks and set a reasonable, sustainable price for its customers. At project close in 2022, more than 34,000 farmers in 12 provinces have purchased the product, often packaged with loans. The product currently retails with no premium subsidy support from the government. Claims are settled in two to five days. Its effectiveness has encouraged more farmers to take out policies and has led to repeat purchases by farmers, who have successfully made claims and received payouts. To read more about the project, please click here. 

Photo: Karen Yonos and members of her family sprinkle fertilizer in a plot of farmland in Ilocos Norte, Philippines 

Source: IFC.ORG