Micro insurance, BCP crucial to bolster MSMEs’ disaster resilience

Micro, small and medium enterprises (MSMEs) in the Philippines are being encouraged to get micro disaster risk insurance and develop a business continuity plan (BCP) to help see them through in times of disasters and calamities.

The call was made by Jerry T. Clavesillas, director of the Bureau of Small and Medium Enterprise Development (BSMED), an agency under the Department of Trade and Industry (DTI), during an e-forum held recently on raising MSME awareness of the need for BCPs.

Clavesillas said the micro disaster risk insurance is an intervention they have come up with to make MSMEs more resilient in times of disaster.

In partnership with GIZ and Cebuana Lhuillier, “we already have launched this so-called micro disaster risk insurance intended for the micro enterprises,” said Clavesillas.

“This is a very soft amortization insurance that over a period of 12 months they can avail from Cebuana Lhuillier [and avail of] insurance coverage of up to P100,000, paying only so much per month. So this is very affordable to most of our enterprise owners particularly the micro entrepreneurs.”

He added, “We encourage everyone now to avail themselves of even a small amount of insuranceÂ… Instead of relying on the social amelioration support from government, which is not really sufficient, [this is] something that we can resort to almost immediately [and] is very useful for us.”

He cited as an example how those who availed of disaster risk insurance during the Supertyphoon Yolanda’s onslaught “immediately I think after three days they were able to claim the money that they were entitled to.”Risk financing for MSMEs is one of the outcome areas that BSMED is eyeing as part of a set of government strategies to help strengthen the disaster resilience of MSMEs in the face of disasters.

Clavesillas said they also plan to scale up initiatives on business continuity management and develop a standardized disaster risk reduction and management (DRRM) and BCP toolkit for both enablers and MSMEs.

Another plan is to improve policy reforms such as institutionalizing among government offices DRMM-specific guidelines for MSMEs.

There will also be efforts to address concerns related to establishing an MSME database and MSME risk profiles to better understand risks that can potentially affect MSME operations.

The executive added that they have been trying to raise awareness among MSMEs of the importance of having a BCP, and “in fact this is one of the requirements now in some of our programs. For them to participate, they have to have this business continuity plan.”

At the same e-forum, Oliver Cam, Philippine Chamber of Commerce and Industry (PCCI)-Tacloban, Leyte chapter vice president for external affairs, likewise echoed the importance of drafting a BCP for business resilience and recovery, noting it allowed his hospitality business to immediately get back on its feet when Supertyphoon Yolanda battered the Philippines in November 2013.

Meanwhile, Rene Meily, president of the Philippine Disaster Resilience Foundation (PDRF), talked about their initiative called S.I.K.A.P. (Synergizing Recovery Initiatives, Knowledge, and Adaptation Practices for MSMEs).

The idea is to bring the various initiatives for MSMEs under one umbrella, said Meily.

He said S.I.K.A.P. is a one-stop shop and unified business recovery hub, and they hope to launch the S.I.K.A.P. website and app soon to aid in the recovery of MSMEs from the COVID-19 impact and “bounce forward to the ‘new normal.'”

The recent e-forum on institutionalizing BCPs for MSMEs is part of a series of webinars co-organized by the Philippine Exporters Confederation, Inc., Employers Confederation of the Philippines, PCCI, and PDRF.

Close Menu