The Bangko Sentral Ng Pilipinas (BSP), the central bank of the Philippines, has issued Circular Number 841, which amends the Manual of Regulation for Banks, increasing mandated maximum microinsurance premiums and benefits. One such benefit allows the family of a deceased borrower to be relieved of debt up to PHP 300,000 (USD 7,000). The new regulations came in the wake of Typhoon Yolanda, which reportedly was one of the deadliest typhoons to have affected the Philippines, killing approximately 6,300 people in 2013 and resulting in roughly USD 1.5 billion in insurance losses. The typhoon is reported to have resulted in increased public scrutiny of the regulations of microinsurance in the country, the overall maximum microinsurance coverage limit has doubled to PHP 466,000 (USD 11,000), 1,000 times the minimum daily wage of workers in the non-agricultural sector of the metro area of Manila, the national capital of the Philippines.
As part of a reported agenda to “increase insurance coverage in the country and to provide the low-income sector access to insurance products,” regulators have allowed rural banks to access the market to “the most vulnerable sector of the society,” people in the farming and fishing industries. As of 2013, 40 microfinance licensed banks, both rural and cooperative, had 1.3 million insured clients in the Philippines.
By Sarah Luo, Research Associate
Sources and Additional Resources
Manila Times: Rural banks to serve more Filipinos with increased microinsurance benefits
Bangko Sentral Ng Pilipinas (BSP): BSP Regulations
GMA Network: NCR minimum wage now at P466/day after P15 increase
PwC: Insurance Tax Highlights- Asia Pacific The Revised Insurance Code of the Philippines
Access to Insurance Initiative: The Philippine experience on Microinsurance Market Development
National Disaster Risk Reduction and Management Council: NDRRMC Update: Effects of Typhoon Yolanda
MicroCapital, May 15, 2014: Philippines’ Government Announces $46m Fund to Support Microentrepreneurs Affected by Typhoon Haiyan (Yolanda)
MicroCapital, May 6, 2014: Responsible Equity Exits in Microfinance; Greenfield Microfinance Models in Africa; Mobile Financial Services Usage Among Rural Women in India, Philippines
MicroCapital, April 25, 2014: United Nations, Smart Communications, Land Bank of Philippines Use Mobile Money in Recovery from Typhoon Haiyan (Yolanda)
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