Government considers insurance for public assets P1.9T
Building of the Ministry of Finance. Facebook DOF picture
MANILA, Philippines—The government has so far included public non-financial assets worth 1.9 trillion pesos in its registration system aimed at not only facilitating more efficient use but also insuring these properties.
Citing a report from the Office of the Treasury (BTr), the Department of Finance (DOF) said that the BTr’s National Asset Registration System (Nars) covered 380,817 government properties nationwide by the end of 2021.
“These include roads, bridges, school buildings, power plants, towers, hospitals and irrigation facilities,” the DOF quoted National Treasurer Rosalia de Leon as saying.
“New entries in this consolidated database of non-financial and strategically important state assets were 5,819 properties, mostly agencies attached to the Department of Transportation (DOTr), with a combined value of 361 billion pesos,” said the DOF.
“We will continue to expand Nars coverage to improve oversight and management of nonfinancial public assets,” De Leon told Finance Secretary Carlos Dominguez III recently.
The BTr established Nars in 2017 “to maintain a reliable inventory of national government non-financial assets and assist in the tracking, inspection, validation and management of assets in the custody of the national government,” the BTr noted. DOF.
In 2020, President Rodrigo Duterte’s economic team also implemented the Philippine Government Asset Management Policy (PGAMP) after a 2018 study conducted by PricewaterhouseCoopers on behalf of the government and the World Bank showed that there was no single agency in charge of asset management and registry, as well as no centralized information technology (IT) based asset inventory available in many agencies.
The same study showed that there was “a lack of policies on asset management, insurance and disaster risk management; limited institutional liability for asset management; and discrepancies in the data kept by land units vis-à-vis the books of accounts of some agencies.
An Asset Management Technical Working Group (TWG) has been formed under the Inter-Agency Development Budget Coordinating Committee (DBCC), responsible for instituting and implementing the Philippine government’s asset management policy for all non-financial assets, such as land, buildings and infrastructure (roads, bridges, as well as flood control and water supply systems), among other critical assets determined by the agencies.
The policy aimed to “increase efficiency, improve decision-making, better manage risk and reduce government costs”.
The agency’s plans will be overseen by a two-year National Asset Management Plan which will be implemented by the national government through the DBCC TWG.
The new asset management system “will ensure the cost-effective management of assets by analyzing the life cycle, capacity and use of non-financial assets individually and collectively, and will maximize public funds by targeting scarce resources to asset needs the most critical.
In particular, the Philippine government’s asset management policy will enable prioritization of assets for insurance coverage, more targeted infrastructure investments, better budget control over assets, and cost-effective use of assets and resources. existing infrastructure.
The DOF said Nars data from the BTr will support the National Indemnity Insurance Program, the implementation of which has been delayed.
The BTr and the Utilities Insurance System (GSIS) had deferred the tender for the 2 billion peso National Indemnity Insurance Program aimed at insuring and protecting public assets in prone areas to disasters.
GSIS has been mandated to insure government assets, property, and interests against natural disasters under Republic Act (RA) No. 656 or the Property Insurance Act.
Before the COVID-19 pandemic hit, GSIS declared the failure of the tender for a one-year national indemnity insurance program at the end of 2019, which would have insured against fires, lightning and natural disasters, including earthquakes, floods, storm surges, typhoons and volcanic eruptions – Department of Public Works and Highways (DPWH) bridges and roads in 25 provinces, as well as schools of the Department of Education (DepEd) in Metro Manila and 32 provinces.
In 2020, National Treasurer Rosalia de Leon told the Inquirer that while GSIS surveyed companies to determine prices, the series of severe typhoons that regularly hit the country – coupled with the prolonged COVID-19 pandemic – had drives up premiums.
It was also in 2020 that the Interagency Public Procurement Policy Board (GPPB) relaxed the bidding requirements for the National Indemnity Insurance Program in a bid to attract international brokers and reinsurers.
However, indemnity insurance premium generally took longer to operate, unlike fast-disbursing parametric coverage in which payments were immediately released upon reaching loss triggers. Non-life insurance involved adjustments based on claims and their transfer to reinsurers.
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