BSP, IC highlight parametric insurance for climate sectors

The Bangko Sentral ng Pilipinas and the Insurance Commission cited the potential of bundling parametric insurance with credit to expand lending to climate-exposed sectors during a webinar held May 13, 2026.

Parametric insurance provides automatic payouts once predefined weather thresholds are met. When bundled with credit, it can serve as a credit-enhancing tool that supports continued financing in climate-vulnerable areas while strengthening financial institutions’ risk management practices.

The webinar, titled “Bundled for Impact: Credit-Linked Parametric Insurance in Practice,” was part of the BSP’s Knowledge Exchange Series on Sustainability.

BSP Assistant Governor Pia Bernadette Roman-Tayag said parametric insurance can serve as both a resilience and bankability tool.

“If climate-exposed sectors become more resilient, they become more bankable, which leads to stronger enterprises, more resilient supply chains, and an economy better able to withstand shocks. This is what payout under parametric insurance makes possible,” she said.

The webinar gathered over 400 participants, including bankers, insurers, and development partners.

It tackled international best practices, product design, credit integration, and distribution channels for bundled insurance products.

Representatives from the German Agency for International Cooperation, Deutsche Gesellschaft für Internationale Zusammenarbeit, CARD MRI, CLIMBS Life and General Insurance Cooperative, Rare, Philippine Insurers and Reinsurers Association, Banco San Vicente, Land Bank of the Philippines, and Pioneer Insurance shared their insights.

Insurance Commissioner Reynaldo A. Regalado said the approach reflects shared responsibility among financial stakeholders.

“Parametric insurance and credit bundling are, at their best, bayanihan in financial form. A bank, an insurer, a cooperative, and a borrower all share a risk that none of them could carry alone,” Regalado said.

The BSP said the webinar supports its sustainability agenda to strengthen financial resilience and promote innovative and inclusive solutions.