GSIS, LandBank to help strengthen PCIC

The Government Service Insurance System (GSIS) and Land Bank of the Philippines (LandBank) have been told to help Philippine Crop Insurance Corp. (PCIC) improve its finances.

In a statement on Monday, the Finance department said the directive was issued after the PCIC reported that 35 centavos was being spent for every peso paid out by the state-owned firm, which provides insurance to farmers.

In contrast, the GSIS and the Social Security System (SSS), which provide social security to government and private sector workers, spend just 3-5 centavos and six centavos, respectively, for every peso given to beneficiaries, the Finance department noted.

The PCIC also reported that it had parked P6.8 billion in cash in LandBank and the Bureau of the Treasury, money that Finance Secretary Carlos Dominguez 3rd said could have earned more had it been placed in other higher-yielding investments.

Dominguez told PCIC president Jovy Bernabe to coordinate with the GSIS, described as efficiently handling about P1 trillion in investments, to find ways to increase the yield of PCIC cash assets worth some P6.8 billion.

The PCIC also needs to correctly price commodities covered by its insurance, the Finance department said, as claims paid out exceeded premiums collected for certain types of crops.

National Treasurer Rosalia De Leon, meanwhile, noted that proposed changes to the Agri-Agra Reform Credit Act would affect funds that currently go to PCIC.

As proposed, part of the penalties paid by banks that fail to lend at least 25 percent of their loanable funds to farmers will instead be allocated for LandBank and Development Bank of the Philippines lending operations and a Department of Agrarian Reform land titling program.

"[I]n this case, the PCIC would need to have a more efficient operation so that they would be able to conserve their resources to be able to provide more insurance coverage for our small farmers," De Leon said.

Source: TheManila Times