Philippines: Farmers, minimum wage earners urged to avail microinsurance

City of San Fernando, Pampanga -- Farmers and other low-income sectors are urged to reconsider microinsurance as a safety net for their lives and livelihood as the typhoon season starts.

Minimum wage earners should anticipate the risks of disasters and cover their “house, life and livelihood” with microinsurance, said Department of Finance (DOF) undersecretary Gil Beltran during the Training on Microinsurance Advocacy held at Clark Freeport recently.

“The Philippines has all the disasters in the world. Microinsurance will give them the opportunity to bounce back,” said Beltran.

He said this insurance for the low-income sector that includes fishermen, sidewalk vendors, and laborers will help 23 million Filipinos living below the poverty line to rebuild their lives when disaster strikes.

According to National Credit Council deputy executive director Joselito Almario, microinsurance polices may cost anywhere from only P1 a day or P300 a year. Low-income earners are advised to ignore high-interest loans like the so-called “five-six.”

Almario explained that in the traditional “five-six” system, 20 percent interest is usually capped on loans, in a weekly basis for instance, which will be equivalent to 80 percent increase in a month.

“Are you going to borrow with this big interest? How could you sustain your livelihood? The people will be hanging to the edge,” he said.

Mario Valdes, executive director of the Philippine Insurers and Reinsurers Association, disclosed that only two percent of the over 90 million people in the country are covered with insurance.

He said the misconception that insurance providers cannot be trusted and will only take the client’s premium with no assurance of claims payment should be rebutted. He added that the public, especially the minimum wage earners, must always anticipate the coming of disasters and sickness.

“The ‘bahala na (come what may)’ attitude should not prevail. Even if you don’t want to get sick, you could get sick. For abstaining from one cigarette or one text message a day, you could save for microinsurance,” said Valdes. (CLJD/JMG-PIA3)