MANILA – The Philippines’ insurance sector is targeted to be at par with counterparts overseas with the latest rule requiring companies to meet a P1 billion minimum capital.
Finance Secretary Cesar Purisima said the insurance sector is among the industries expected to benefit from targeted integration of the Association of Southeast Asian Nation by 2015.
Purisima explained that premium of life and non-life insurance products in the country remain “quite high” but once the regional integration kicks in insurance companies in the country will face greater competition, thus, the need to keep up with the competition.
To date, the minimum paid-up capital is P250 million but insurance companies are required to increase this every other year until it reaches P1 billion by 2020.
For reinsurers, they are required to have a P2 billion paid up capital by 2020 while entities involved in micro-insurance are required to meet a P500 million minimum capital.
Purisima said the domestic capital market needs to meet the demand of integration with other economies.
Purisima said the ASEAN 2015 integration will push through as programmed but admits that “there may be areas that may have to be adjusted.”
Purisima said the country’s electronics sector was expected to die a few years back due to several reasons like lackluster performance and size-related issue.
But after integration it became part of a bigger sector. It is now part of the ASEAN electronic sector and as a result it became sustainable, he said.*PNA