DOF orders PCIC to only implement demand-driven foreign-supported projects

Finance Secretary Carlos Dominguez III has instructed the Philippine Crop Insurance Corp. (PCIC) to ensure that its projects supported by foreign grants and loans are actually ‘demand-driven’ and would benefit the agency and the farmers it is tasked to serve.

During the March 17, 2022 meeting of the PCIC board, Dominguez also directed the Bureau of the Treasury (BTr) to coordinate with the Department of Budget and Management (DBM) in determining how to rationalize the budget of the PCIC to reduce its financial strain on the proposed national expenditure program (NEP) for fiscal year 2023.

Dominguez said the PCIC, as well as other government offices, should stop the practice of allowing foreign consultants to offer projects that would serve the personal interests of these foreigners rather than the interests of the agencies.

In the future, the implementation and financing of projects should be determined by the PCIC board, Dominguez said.

“We are the ones who determine what we need and we will be the one to select the funding,” said Dominguez, who chairs the PCIC Board. “So in the future, you will reject any approach that is not generated by this Board.”

Dominguez pointed out that some projects offered by foreign consultants do not benefit the PCIC or other government agencies, but end up serving the consultants’ personal interests.

He suggested that all PCIC personnel be required to report any offers of foreign travel, vehicles, additional compensation, or other perks associated with implementing projects offered by consultants.

Agriculture Undersecretary Fermin Adriano agreed with Dominguez, and said this was among the reasons many projects do not proceed after the pilot stages of their implementation.

“There are so many pilots that have been done. The problem is really upscaling those pilots. And that’s the reason why we are stuck in this kind of, you know, underdeveloped status because we cannot upscale these things because it’s not demand-driven, as you said,” Adriano said.

Adriano represented Agriculture Secretary and PCIC Vice chairperson William Dar during the board meeting.

“That’s the problem. Mr. Chair. You’re right in your observation. It has to be demand-driven,” Adriano added.

During the meeting, the Board also approved the corporate operating budget of the PCIC, subject to its recasting based on the discussions among the board members about the need to ease its strain on next year’s General Appropriations Act (GAA) by reducing the Corporation’s premium subsidy allocation and its investments in government securities.

Dominguez also said commissions or incentives received by municipal employees, which the corporation lists as “honoraria, ” with an allocation of around P147 million in its budget should be done away with as this should be shouldered by the local government units (LGUs).

Adriano said LGUs can well afford to give these incentives owing to their increased share of the government’s national tax collections beginning this year.

National Treasurer Rosalia De Leon said these moves would not reduce the PCIC’s insurance capability as its investments in government bonds that would mature next year can be spent to increase its coverage to serve more farmers.

Government Service Insurance System (GSIS) President-General Manager Rolando Macasaet also cited the need for the PCIC to develop a program that would increase its income from premiums of paying clients so that it can raise more funds from marketing efforts rather than primarily relying on subsidies from the national government.

“I suggest you give them (PCIC regional managers and marketing personnel) targets this time so that you can hit your goal of earning P598 million in premiums from paying clients and other sources. At least, it wouldn’t come from GAA funds but from premiums so they will pay for their insurance cover,” said Macasaet, a member of the PCIC Board.

De Leon said the PCIC’s investments will also be reviewed to determine how the PCIC can find a better way to grow its funds and how much it can return to the national government in the form of dividends, considering that the Corporation has accumulated surplus equity of P1.1 billion.

The Board approved during the meeting the PCIC’s updated High-Value Crops Operations Manual and Livestock Operations Manual, which both contained streamlined and standardized underwriting and claims processes to comply with the provisions of Republic Act (RA) 11032 or the Ease of Doing Business (EODB) Law.

Also approved were the PCIC’s simplified procedures on handling feedback and complaints, which was also updated to comply with the EODB Law, and its Compensation and Position Classification System. (DOF)