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The Climate Change Adaptation Project
on Building Climate Resilient
Farming Communities in Agusan del Norte
through Innovative Risk Transfer Mechanisms
A demonstration Project under the
United Nations MDG-F Joint Programme on Strengthening the
Philippines’ Institutional Capacity to Adapt to Climate Change
ILO-DTI-DOLE
Climate-related
disasters &
climate variability
represent a major
source of risks for
the POOR in
particular, the
FARMERS who are
dependent
on “good weather”
for their survival
and livelihood!
Farmers in
Agusan del
Norte...
Lack access to credit info
Generally obtain financing from
traders at very high interest
Lack acceptable collateral
With limited business knowledge and
experience
Have unstable income & cash flow
Have low paying capacity
Low availment of insurance
(crop, Life/Non-life)
LIMITED access to mechanisms that improve and sustain productivity,
transfer and manage risks, as such increase resilience!!!
Project Objectives
1-Develop and test financial
safety nets for climate
vulnerable farming
populations, esp. women
2-To develop the capacities
of vulnerable populations
to avail of the benefits
under economic
diversification and a
democratized governance
system
Integrated Financial Package
Financing as Usual: LGU, Coop & Rural Bank Models
• Prod’n Loans

Bundled with NonFinancial services
- Low interest
- Non-collateralized
- Climate Change &
- Less document requirements Environment Briefings
- Financial Literacy
- Simplified processing
- Production-cycle responsive - Agri/Enterprise Tech
Support (FFS)
releasing
- Market Info/Assistance
• Coop/RB: Savings
 Insurance
- Health, Credit/Life
- Crop (Traditional
& Weather Index-Based)
Weather Index-Based Insurance (WIBI) - ILO/PCIC




An insurance scheme in which “claims” are based on agreed weather indices and
not on the “actual” damages suffered by the crops.
Indices are developed on the basis of a good amount of historical weather data and
crop yield correlated to weather.
Does not require field assessments of damages; Claims are paid out once a certain
“index” is breached.
Potential to respond more quickly to farmers when there is limited amount of
rainfall (drought) or excessive amount of rainfall expected to adversely affect crops.
Why WIBI?


Climate change is causing the weather to be unpredictable. Farmers are vulnerable
as they depend on good weather for their livelihood.
Enables farmers to protect their livehoods by transfer of the climate risks to
insurers.
Weather Index-based Insurance (WIBI)
Insurance as Usual: Rice and Corn Packages
A package of 5 Products: Excess and Low Rainfall Indexes


Affordable premiums
Faster pay-outs
-No field assessments
of damages
-No need for filing of
claims pay-out automatic
upon breach of index

Delivered under the IFP-
bundled with other Financial
and Non-Financial Services
- WIBI literacy
- Techno Training:
Recommended Agri Tech
& Pest Control (FFS-IPM)
Climate Change Adaptation Support Programme (CCASP) –
Innovative Financing, Insurance Solution & Marketing
Assistance for Farmers & Fishers in Agusan del Norte &
Caraga Region
2009-2011
The Climate Change
Adaptation Project
on Building Climate
Resilient
Farming
Communities in
Agusan del Norte
through Innovative
Risk Transfer
Mechanisms
A UN-GOP and PublicPrivate Partnership
- A follow thru undertaking aimed at sustaining and building on
the gains of the CCAP and expanding the delivery of the benefits
of the developed and tested innovative risk transfer mechanisms
especially the IFP –cum- WIBI
Memorandum of
Understanding
(MOU)
December 16, 2011
Agusan del Norte’s
Weather Index-Based Insurance (WIBI)
developed under the ILO-DOLE-DTI Climate Change Adaptation Project
2009 – to present
“Microinsurance and Natural Catastrophes:
Towards a Public-Private Cooperation for
Efficient Risk Management”
3-4 February 2015  Manila, Philippines
Brenda B. Corvera
Lead Focal Person
Climate Change Adaptation Support
Programme (CCASP)
Department of Trade and Industry- Caraga
Region
What did CCAP deliver & CCASP start with?
CCAP 2009-2011
CCASP 2011 to
present….
INNOVATIVE RISK TRANSFER
MECHANISMS :
Integrated Financial Package (IFP) –cumWeather Index-Based Insurance (WIBI)
(developed and tested during the CCAP Pilot Run)
IFP for Farm Crop Production and Economic Diversification
via the Rural Bank Model
Cooperative Model
Local Government Unit (LGU) Loan Facility Model
…a working partnership between government
and the private sector…
CCAP 2009-2011
CCASP 2011 to
present….
2 Private Financial Service Providers (FSPs) :
Peoples Bank of Caraga, Baug CBM Cooperative
4 Local Government Units :
Buenavista, Jabonga, Las Nieves & RT
Romualdez offering the IFP –cum-Insurance
facilities and advocating the CCAP mechanisms
among their constituents (2 LGUs with WIBI)
CCA Financing Fund/Portfolio of about P15 M ++
(test run funds + public and private sector
counterpart)
What did CCAP deliver & CCASP start with?
CCAP 2009-2011
CCASP 2011 to
present….
WIBI Package for Rice and Corn
(5 products)
ILO Microinsurance Innovation Facility (GVA)
funded the experts who developed the computer
programme/burn analysis
ILO -Philippine Crop Insurance Corporation
CCAP WIBI Team – working to study & review
the Indexes through the 7 cycles]
PCIC with -product delivery
WIBI accessed through the following mediators:
Rural Bank, Coop, LGUs (in Buenavista & RTRomualdez)
…more climate change- aware farming
CCAP 2009-2011
CCASP 2011 to
present….
households and their communities, better able to
cope and adapt to climate change risks
Core group of farmer-borrowers/
beneficiaries who have availed of the
financial and non-financial services under
the IFP and WIBI : 1,000+
+++ farmers/farming households in nearby
communities who have come to know of the CCAP
products and services
What did CCAP deliver & CCASP start with?
CCAP 2009-2011
CCASP 2011 to
present….
Early Warning Systems (EWS) plans prepared &
operational with devices installed in 4 CCAP
Priority Areas (thru partnership with DOST-Caraga,
DOST-PAG-ASA & OCD)
4 Automatic Weather Stations
16 Manual Rain Gauges
11 Flood Water Level Gauges
10 Flood Warning Signages
+ 1 additional DOST-PAG-ASA AWS in Las Nieves
CCAP 2009-2011
CCASP 2011 to
present….
Four LGUs with Organic Fertilizer
Production Facility funded by the
DOLE-Caraga
+ 1 more organic fertilizer facility (still
funded by DOLE) operated by Baug CARP
Beneficiaries Multipurpose Coop in
Magallanes, Agusan del Norte
What did CCAP deliver & CCASP start with?
CCAP 2009-2011
CCASP 2011 to
present….
LGUs, government agencies, non-government
/peoples organizations esp. farmers associations
– and their focal persons capacitated on –
Relevant assessments inc. Vulnerability &
Adaptation Assessments, Value Chain
Mapping & Analysis
Financial & WIBI Literacy
EWS planning, implementation & monitoring
… Climate risk-based decision [risk taking &
transfer] making on and off farm …
Post- CCAP
Quarterly CCASP Consultative and
Assessment Meetings
Since 2012 to present
Performance Measures & Results
as of 7th cycle
Loans Released
Loan Availments
Crop
Production
Alternative
Livelihood
Total
P 70 M
3,500
P 28 M
2,700
P 98 M
6,200
Weather Index-Based Insurance
CCAP/CCASP Experience
WIBI Production and Payout Summary
(Cycles 1- 5)
A. By Lender/Aggregator - Cycles 1- 5
Lender/Mediator/ No of
Aggregator
Farmers
Area
(Has.)
PRODUCTION
Amount of
Cover
PAYOUTS
Gross No of
Premium Fs
Payout
45,431.05 16
153,711.60
23.51
1.21
43.24
LR
Payout Payout Payout
Rate (%) Ratio Incidence Cause
1. Baug MPC *
37
37.00
653,684.20
2. LGU Buenavista*
206
190.50
3,756,855.15
261,105.08 48
288,243.00
7.67
1.10
23.30
LR
3. LGU R. T. R. **
4. People's Bank of
C**
599
879.00
14,202,000.00
597,085.65 87 1,482,931.21
10.44
2.48
14.52
ER
9
16.00
240,000.00
9.63
3.23
11.11
ER
10.33
2.14
17.86
TOTAL
851
1,122.50 18,852,539.35
NOTE: * Low Rainfall and Excess Rainfall Covers.
** Excess Rainfall Cover only
7,158.00 1
23,100.00
910,779.78 152 1,947,985.81
WIBI Production and Payout Summary
(Cycles 1- 5)
B. By Crop Season
a. Wet Season (May-October) - Cycles 1 , 3 & 5
Lender/Mediator/
No of
Area
PRODUCTION
Amount of
Aggregator
Farmers
(Has.)
Cover
1. Baug MPC *
22
22.00
369,473.68
25,678.42
16
153,711.60
41.60
5.99
72.73 LR
2. LGU Buenavista*
101
94.00
1,893,500.00
131,601.90
48
288,243.00
15.22
2.19
47.52 LR
3. LGU R. T. R. **
4. People's Bank of
C**
366
521.00 8,832,000.00
306,607.65
64
1,096,006.21
12.41
3.57
17.49 ER
TOTAL
3
492
6.00
90,000.00
PAYOUTS
Gross
No of
Premium
Fs
** Excess Rainfall Cover only
Payout
Payout
Rate (%) Ratio Incidence Cause
4,684.50
643.00 11,184,973.68 468,572.47
NOTE: * Low Rainfall and Excess Rainfall Covers.
Payout Payout
0.00
128
1,537,960.81
13.75
3.28
26.02
WIBI Production and Payout Summary
(Cycles 1- 5)
b. Dry Season (November - April) - Cycles 2 & 4
PAYOUTS
PRODUCTION
Lender/Mediator/
No of
Area
Amount of
Gross
No of
Aggregator
Farmers
(Has.)
Cover
Premium
Fs
1. Baug MPC *
15
2. LGU Buenavista*
105 96.50
233 358.00
3. LGU R. T. R. **
4. People's Bank of
C**
TOTAL
4
15.00
7.00
357 476.50
284,210.52
Payout Payout Payout
Inciden
Payout Rate (%) Ratio
ce Cause
19,752.63
0.00
1,863,355.15
129,503.18
0.00
5,370,000.00
290,478.00 23
105,000.00
7,622,565.67
NOTE: * Low Rainfall and Excess Rainfall Covers.
** Excess Rainfall Cover only
386,925.00
7.21
1
23,100.00
22.00
442,171.31 24
410,025.00
5.38
2,437.50
1.33
9.87 ER
9.48 25.00 ER
0.93
6.72
WIBI Production and Payout Summary
(Cycles 1- 5)
B. By Cause of Breach of Index Trigger
a. Low Rainfall
Lender/Mediator/
No of
Area
Aggregator
Farmers
(Has.)
PRODUCTION
Amount of
Cover
Gross
No of
Premium
Fs
PAYOUTS
Payout
Payout
Rate (%)
Payout
Ratio
Payout
Incidenc
e Cause
1. Baug MPC *
37
37.00 653,684.20
45,431.05
16
153,711.60
23.51
3.38
43.24
LR
2. LGU Buenavista*
206
190.50 3,756,855.15
261,105.08
48
288,243.00
7.67
1.10
23.30
LR
243
227.50 4,410,539.35
306,536.13
64
10.02
1.44
26.34
TOTAL
441,954.60
b. Excess Rainfall
Lender/Mediator/
No of
Area
Aggregator
Farmers
(Has.)
3. LGU R. T. R. **
4. People's Bank of C**
TOTAL
599
7
606
PRODUCTION
Amount of
Cover
879.00 14,202,000.00
13.00 195,000.00
892.00 14,397,000.00
Gross
No of
Premium
Fs
597,085.65
5,596.50
602,682.15
PAYOUTS
Payout
Payout
87 1,482,931.21
1
23,100.00
88 1,506,031.21
Rate (%)
Payout
Ratio
Payout
Incidenc
e Cause
10.44
2.48
14.52
ER
11.85
4.13
14.29
ER
10.46
2.50
14.52
Weather Index-Based Insurance
CCAP/CCASP Experience
Developing the WIBI : Considerations and
Challenges
1.
2.
3.
4.
5.
6.
Conduct of research and undertake
modelling
Conduct of WIBI Literacy
Secure reference weather stations an setup Climate Information System
Establish procedures, rules and regulations
on marketing, and underwriting; Monitoring
and Cycle Management; as well as
Processing of Pay-outs
Conduct of test runs and
review/enhancement of indices
Implementation/Marketing
•
•
•
•
•
Setting up agreements
with mediators and
conduits
Processing of
applications and
enrolment
Management and
monitoring of the cycle
Managing the CIS and
processing of pay-outs
Post cycle harvest
assessment
Lessons Learnt1. Research and modelling takes time and money
2. WIBI literacy needs to be conducted in several brief
modules, through adult learning techniques/games and in
local language; and should be continuing
3. The literacy module also has to include advocacy for
adoption of good farm management
Lessons Learnt4. The system for monitoring the breach of index should
be developed early and one which all parties including
farmers are able to monitor.
5. Maintaining accuracy of instruments and securing
measurements
6. The index are deemed most effective in areas not more
than 20 kilometres from the weather measurement instrument
(to minimize variation between the weather experienced at the
farm level and at the instrument level)
Lessons Learnt 7. Given the novelty and limited exposure of the WIBI proram in
the two test municipalities – famers need more intensive WIBI
literacy briefings
8. Certain farmers especially those with prior experience with the
traditional crop insurance still prefer the traditional insurance over
the WIBI - because
a. non-inclusion of pests an diseases among the insurable
risks under WIBI
b. dissatisfaction with the pay-outs/no pay-out even if farm is
flooded (need to study inclusion of flood peril)
c. cases of delayed payments (certification process)
d. doubts on pay-outs (breached index without damage)
WIBI in the Overall Risk Management and Integrated Financial
Package Scheme
Lessons LearntDevelopment:

Understanding target groups’ characteristic and needs for financial and nonfinancial services through relevant analysis inc. Vulnerability & Adaptation
Assessments, Farming Value Chain Analysis & Market Research are critical in
the design of diversified, affordable and sustainable packages
Package Components/Features:



Bundling financial services with non-financial services makes the package more
attractive to the poor while increasing their opportunities to maximize outputs and
diversify their productive activities.
Group solidarity as collateral substitute – allows availment and access by
asset-poor communities
Emphasis on savings products (voluntary or compulsory) help farmers to better
deal with emergencies including disasters and to be less loan dependent for their
economic activities
Lessons Learnt
Integrating insurance and other social protection
mechanisms- to include crop, health & medical
insurance, strengthen confidence of farmers to
engage in agriculture risk taking while protecting their
crops and their families.

Integrating risk reduction measures to financial
packages work to reduce exposure for more effective
resilience-building work.

Engaging in Public and Private Partnership with
LGUs, training institutes, financial service providers
inc. insurers) facilitate the effective, greater reach for
financial and/or non-financial services and
sustainability of delivery.
Special Recommendations for LGUs • Localize and enforce the provisions of the National
Organic Agriculture Act to promote greener and more
productive agriculture for climate change adaptation.
• Ensure the deployment of at least one Agriculture
Technician per Barangay with corresponding capability
building and budgetary support to ensure effective
delivery of agro-technology services to farmers.
• Ensure the establishment of Enterprise Offices which
support development of rural enterprises (agri and nonagri-based)
Thank You