DOF Sec. Dominguez underscores need for climate-smart insurance in vulnerable economies

2019-08-17T06:46:44+08:0016 Aug 2019|Tags: , , , , , , , , |

MANILA, 16 August 2019 – “The Philippine government is keen on strengthening its policies on climate financing,” Department of Finance (DOF) Secretary Carlos Dominguez stated in his remarks for today’s forum on climate-smart micro, small, and medium enterprise (MSME) insurance in vulnerable and emerging economies.

“The challenges posed by climate change demand all hands be on deck,” Dominguez said in his statement, which was read in the forum by DOF Assistant Secretary Paola Alvarez. “Green financing will allow us to mobilize investments, from the wider use of renewable energy to improving the resilience of our communities.”

The forum was organized by the Institute for Climate and Sustainable Cities and the Munich Climate Insurance Initiative in partnership with the DOF; global insurance broker Willis Towers Watson; and the Vulnerable 20 Group of Finance Ministers (V20), which represents around one billion people from 48 countries most vulnerable to climate impacts, including the Philippines. The V20 was established under the Presidency of the Philippines in October 2015.

The V20 recognizes the importance of shifting global financial flows to align with low-carbon and climate-resilient development, which is why it develops, implements, and scales up financial responses that maintain and strengthen fiscal stability and economic resilience in the face of intensifying climate impacts. This includes the Sustainable Insurance Facility (SIF), a V20-led effort to close the micro, small, and medium enterprise (MSME) insurance gap.

“As government, we do not want to leave MSMEs behind. MSMEs will be affected by climate change and through this forum, we can discuss challenges and identify needs,” Asec. Alvarez assured the representatives of MSMEs in the discussion.

MSMEs employ over 65% of the labor force and contribute to about 36% of GDP in the Philippines, yet insurance options remain out of their reach, said V20 advisor Sara Jane Ahmed.

“The image often is that insurance is a product pushed by developed countries. What the Philippine government and the V20 are stressing is a contrary view. Because what we have here are vulnerable country-led initiatives that engage our national and local insurance cooperatives and comparatives formations developing a home-grown menu of tools for MSMEs,” said ICSC executive director Red Constantino in his opening remarks, referring to the SIF and the Accelerated Finance Mechanism for Maximal Resilience and 100% Renewable Energy.

“We applaud the continuous leadership of DOF Undersecretary Mark Joven and Assistant Secretary Paola Alvarez and hope they can lend their voice more often in the international arena, where their insights and leadership are abundantly needed,” Constantino added.

The forum is part of a series of SIF consultations in key V20 countries such as the Philippines. The results will be considered in the SIF operational framework to be launched next month.