Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ____ 
Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR. 
EXPLANATORY NOTE 
Every year, our poor farmers face natural disasters with grave pecuniary consequences. An 
average farmer can lose up to Php 50,000 a year in lost productivity due to extreme weather 
events.1 In 2021, when Typhoon Odette gushed its strong winds into our country and barreled 
through the islands and provinces of Visayas and Mindanao, its aftermath caused losses worth 
Php 11.1 billion to agricultural crops and farmland. 
This bill proposes that the State update its existing crop insurance policies for Filipinos in the 
agriculture sector. It is true that we have the Philippine Crop Insurance Corporation but thus 
far it has had too few participants and very minuscule outreach compared with the total number 
of farmers that it is supposed to serve. From 2013 up to 2017, Congress has been 
appropriating an average of Php 1.55 billion per year to subsidize the PCIC insurance 
premiums on up to 600,000 hectares of rice farms in a number of provinces. Still, against a 
total of almost Php 380 billion in palay production in 20142, the Philippine Crop Insurance 
Corporation has been insuring only around Php 12.2 billion worth of crops annually or roughly 
3% of potential insurable value.3 In short, the greater numbers of our small farmers remain 
uninsured simply because of the inadequate resource base of the PCIC. 
In order to effectively reach and serve more and more of the country's five million small-hold 
farmers, and provide them with greater resiliency, there is a need for the country to involve 
the private sector and adopt a more relevant strategy and also safeguard the food security of 
the broader rural population. The private sector shall be screened and accredited before they 
engage in insurance provisions. It shall be ensured that they are financially capable and swift 
in the performance of assessments and release of funds to benefit every disaster-struck 
farmer. 
Our farmers need our utmost support and assistance, especially during times of extreme need. 
In consideration of the foregoing premises, the swift passage of this bill is humbly sought. 
LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR. 
1 https://www.rappler.com/move-ph/issues/hunger/52992-climate-change-food-security-ph  
2  www.psa.gov.ph 
3  Computed based on data farmers registered as derived from PCIC website.
November 10, 2022
2:54 pm
6047


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ____ 
Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR. 
AN ACT 
TO STRENGTHEN THE RESILIENCY OF SMALL FARMERS AGAINST CLIMATE 
CHANGE AND EXTREME WEATHER RISKS BY ESTABLISHING THE 
REGULATORY FRAMEWORK AND PROGRAM FOR A FREEWEATHER INDEX-
BASED CROP INSURANCE, PROVIDING THE SOURCE OF FUNDING 
THEREFOR, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:   
Section 1. Short Title. – This Act shall be known as the “Free Index-Based Crop 
Insurance (FIBCI) Act”. 
Section 2. Declaration of Policy. – It is the policy of the State to ensure food security, 
intensify food production, and increase climate resiliency of the country's agricultural 
communities by ensuring the availability of critical safety nets to help farmers and 
agricultural producers withstand the adverse impact of disastrous weather events, 
facilitate their prompt recovery from crop damage or crop devastation which often lead 
them to uncompensated losses, heavy financial burden and unpaid debts. 
Recognizing the increasing frequency and/or severity of droughts, fires, floods 
and storms, the Climate Change Act of 2009 (RA 9729) has sought to "create an 
enabling environment for the design of relevant and appropriate risk-sharing and risk-
transfer instruments;" and to "coordinate with local government units (LGUs) and 
private entities to address vulnerability to climate change impacts of regions, 
provinces, cities and municipalities." 
6047


The Philippine Disaster Risk Reduction and Management Act of 2010 (RA 
10121), has also it declared policy of the State to:  
a) 
Xx "Uphold the people's constitutional rights to life and property by 
addressing the root causes of vulnerabilities to disasters, strengthening the 
country's institutional capacity for disaster risk reduction and management 
and building the resilience of local communities to disasters including 
climate change impacts;”xx 
b) 
Xx "Incorporate internationally accepted principles of disaste risk 
management in the creation and implementation of national, regional and 
local sustainable development and poverty reduction strategies, policies, 
plans and budgets;"xx 
c) 
Xx "Institutionalize the policies, structures, coordination mechanisms and 
programs with continuing budget appropriation on disaster risk reduction 
from national down to local levels towards building a disaster-resilient 
nation and communities;” xx 
In view thereof, the State shall strengthen and harmonize government initiatives 
and programs to effectively address the weather and climate risks faced by 
small agricultural producers in the Philippines, and extend crop insurance 
coverage to ensure food security and stronger resiliency in crops and 
agricultural production.  
 
In order to reach out and serve the greatest number Filipino farmers, fisher-folks 
and agricultural producers, the State shall encourage private insurance service 
providers to complement the government crop insurance programs by way of 
innovative risk sharing mechanisms, specifically weather index-based crop insurance 
program. 
 
Section 3. Definition of Terms. – As used in this Act, the following terms shall be 
defined as follows: 
a. 
Insurance - is the service rendered by insurance providers to protect the 
insured clients against the probability of a large unexpected loss through the 
transfer and sharing of risks to compensate for unexpected but financially 
disastrous events. A contract of insurance is an agreement whereby one 


undertakes for a consideration to indemnify another against loss, damage or 
liability arising from an unknown or contingent event.   
 
b. 
Crop insurance - is an insurance service to protect farmers and agriculture 
producers against financial losses and uncertainties brought about by crop 
failures, pests, extreme weather conditions and/or other causes beyond their 
control. 
 
c. 
Weather Index-based Crop Insurance (WIBCI) - is an innovative insurance 
product that aims to provide prompt insurance payout against the incidence of 
extreme weather conditions through the use of scientifically measurable 
weather parameters such as rainfall, temperature, frost, humidity and/or other 
gauges as proxy and transparent indicators of the occurrence of an adverse 
event. 
 
d. 
Payout - the amount paid or to be paid by the insurance service provider on 
account of the occurrence of an event, such as the breach of an agreed lower 
or upper limit in weather indicators, as may be indicated in an insurance 
contract. 
 
e. 
Triggers - threshold measurement points for the selected weather index 
parameter or indicator at which the insurance contract starts to pay out. 
 
f. 
Reference Unit Area (RUA) - is a contiguous geographical area such as a 
group of barangays, municipality or city as may be covered or monitored by a 
Reference Weather Station (RWS). 
 
g. 
Reference Weather Station (RWS) - a specific meteorological station for 
each insurance contract as the named reference station from which the 
observed weather parameter/s shall be obtained. This may be a particular 
weather facility including: (1) weather stations and rain gauges of Philippine 
Atmospheric Geo-Physical and Astronomical Services Administration 
(PAGASA); (2) automated weather stations (AWS) under Project NOAH of the 
Department of Science and Technology – Advanced Science and Technology 


Institute (DOST-ASTI); (4) any WMO-compliant or internationally certified 
private or university-based weather station; and/or (4) satellite-based remote 
sensing and weather observation services. 
 
h. 
Small Farmers/Producers - are those farmers whose combined farm-
holdings cover an area of not more than five hectares. 
 
Section 4. Free Index-Based Crop Insurance Framework. – There is hereby 
established a nationwide Free Weather Index-based Crop Insurance (FIBCI) Program 
that shall operate under the following policy framework: 
 
4.1 Weather Index-Based Insurance Product. The typical core features of an index-
based insurance product shall be present in a crop insurance contract under the 
Program, as follows: 
4.1.1 An agreed weather reference index, such as, but not limited to rainfall 
(mm), wind speed (kilometers per hour) and temperature (degrees) whose 
quantification is provided for each Reference Unit Area and for which data is 
monitored, reported and certified by an independent third-party service provider 
such as PAGASA or any DOST-ASTI recognized private professional 
meteorological information service providers. 
 
4.1.2 A Reference Weather Station as the named meteorological station from 
which the observed weather parameter shall be obtained; 
 
4.1.3 A trigger reference point for the agreed index parameter;  
 
4.1.4 A payout or lump sum insurance payment amount that shall be based on 
a pre-determined schedule that takes into account the actual area planted. 
 
4.1.5 Phases of crop growth that will be covered by the insurance – which may 
refer to a separate trigger and partial payout for each phase of vegetative growth, 
or a threshold indicator for one whole cropping or growing period. 
 


4.2 Insurance Service Providers. The FIBCI Program shall be open to all 
government and private sector insurance and re-insurance providers that will be 
accredited based on the policies and guidelines to be formulated by the FIBCI Project 
Management Office created under this Act. Weather Index-Based Crop Insurance 
providers shall be under the regulatory supervision of the Insurance Commission. 
 
4.3 Stakeholders and Participants. The main beneficiaries of the FIBCI program 
shall be the Filipino farmers and agriculture and fisheries producers or farmers’ 
cooperatives who shall register with their respective Local Government Units (LGUs) 
for the particular crop or production insurance program offered by the LGU as a group 
policy through accredited insurance providers. As may be deemed necessary by the 
LGUs, local funds may be set aside to complement the premium subsidies that will be 
provided by the national government. The beneficiary farmers may also pay premium 
for added insurance features that may be offered by providers. 
 
4.4 No Need for Calamity Declaration. Any breach of the insurance parameters as 
stated in the FIBCI policy contracts shall be the sole trigger or basis for any payout 
and shall not require the declaration of a state of calamity by the LGU in order to trigger 
the obligation of the insurer to the insured farmers/producers. 
 
Section 5. Program Administration. – There is hereby created a FIBCI Program 
Management Office (PMO), under the Office of the Insurance Commissioner, that will 
focus on establishing the needed coordination mechanisms to implement the program, 
and popularizing farmers’ regular use of Weather Index-Based Crop Insurance. The 
FIBCI-PMO shall: 
a. 
Coordinate with the various stakeholders, including the Department of 
Agriculture, National Disaster Risk Reduction & Management Council 
(NDRRMC), Local Government Units (LGUs), farmers’ groups, insurance 
service providers and the scientific community, on the widest possible 
implementation of the FIBCI program based on the rules and guidelines 
formulated by its Board; 
b. 
Establish and maintain, a Weather Risk Data Center for index-based 
agriculture insurance, which information may be obtained from various 
sources, including PAGASA, Philippine Crop Insurance Corporation records, 


Project NOAH, agriculture colleges and universities, other government 
research institutions, and commercial sources such as satellite-based weather 
monitoring services;  
c. 
Monitor, in coordination with the Insurance Commission, the progress and 
concerns of all index-based agriculture insurance providers in the country; 
d. 
Accept the participation of national and region-based insurance providers or 
insurance pools and intermediaries such as brokers, and insurance agents 
and 
meteorological 
information 
support 
professionals 
– 
that 
are 
registered/accredited with the Insurance Commission to develop and register 
insurance products based on actuarially sound insurance and re-insurance 
principles and science and evidenced-based weather analysis.  
e. 
Coordinate with the municipalities and cities and farmers’ cooperative 
federations that are eligible to undertake the FIBCI Program in order to 
facilitate their access, registration and participation to the FIBCI Program as a 
group insurance facility. 
f. 
Undertake, in partnership with the scientific communities, the development 
and conduct of pilot studies on other crops and agriculture produce as well as 
on other innovative modes of risk management that will encourage 
participation in index-based insurance and re-insurance; and 
g. 
Oversee, monitor and ensure compliance by the relevant parties in the 
implementation of the Program and the provisions of the index-based 
insurance and re-insurance contracts. 
 
An Executive Director shall be appointed to formulate the agency’s organization 
plan, strategic and operational plans, and annual budgets which shall exceed 2% of 
the total Premium Subsidies to be allotted for the fiscal year.  
 
Section 6. FIBCI Oversight Board. – The PMO shall adhere to the Micro-Agri Policy 
Framework adopted by the Insurance Commission. An Oversight Board shall convene 
at least twice a year to monitor and oversee the operation of the FIBCI program and 
the administration of all index-based agriculture insurance in the country. This shall be 
composed of the heads of the following institutions and agencies, or their designated 
permanent representatives: 
1. 
Insurance Commission, to serve as Chairman 


2. 
Department of Agriculture   
3. 
Department of Interior and Local Government 
4. 
Cooperatives Development Authority 
5. 
National Disaster Risk Reduction and Management Council (NDRRMC) 
6. 
Philippine Atmospheric Geophysical Astronomical Services Administration 
(PAGASA) 
7. 
DOST-ASTI    
8. 
Three (3) farmers, representing farmer organizations or farmer cooperative 
federations from the country's three major island groups - to be appointed 
by the President of the Philippines, and 
9. 
Three (3) representatives from the insurance industry, including the 
Philippine Crop Insurance Corporation and two (2) from the private sector. 
 
The Board shall have the following functions: 
a. 
Confirm or approve the organization plans, strategic and operational plans, 
and annual budgets to be submitted in the developed, managed, and 
monitored by PMO, with the end in view of ensuring proper and transparent 
implementation of the Program with the widest possible outreach for small 
farmers; 
b. 
Formulate the rules and guidelines for the implementation and monitoring 
of index-based crop insurance programs, taking into account actuarially 
sound insurance and re-insurance principles; 
c. 
Fix and regularly update the maximum levels of insurance coverage levels 
and maximum premiums that can be used as basis for subsequent budgets 
of the FIBCI and other related programs; and 
d. 
Prepare, through the PMO, an annual report on the implementation and 
extent of availment by farmers and LGUs of the FIBCI program. 
 
Section 7.  Role of PAGASA and Other Weather Information Providers. – The 
Philippine Atmospheric Geophysical and Astronomical Service Administration 
(PAGASA), consistent with its mandates under the PAGASA Modernization Act of 
2015 (or R.A. No. 10692), shall provide adequate, up-to-date, and timely information 
on atmospheric, astronomical, and other weather-related phenomena as well as 


assessments pertinent to climate change adaptation programs, such as weather 
index-based insurance.  
PAGASA, through its Unified Meteorological Information System, and relevant 
research institutions, the Project NOAH of DOST-ASTI, and relevant state universities, 
shall continue to conduct and publish correlation and other scientific studies, prepare 
computerized analytical systems, and accessible weather information, and analysis of 
future climate scenarios, among others. 
Pursuant to Sections 10 and 11 of R.A. 10692, PAGASA may partner with 
relevant scientific organizations, research organizations and/or the private sector 
entities for the implementation of Specialized Services and Cost Recovery Programs 
and may collect a minimal service fee for its Weather Data Certifications. 
The accredited index-based insurance service providers may partner with 
recognized satellite-based weather information service agencies as their alternative 
source and basis for determining the weather thresholds and risk levels. Insurance 
providers utilizing satellite-based weather information services shall report to the 
FIBCI-PMO details on the objectivity and reliability of such weather information 
facilities. The assistance of meteorological information support professionals may be 
sought to calculate and analyze the risk levels or provide computations to complement 
the data from weather stations of PAGASA, Project NOAH facilities and other 
monitored public or privately-owned weather sensors. 
 
Section 8. Role of Local Government Units. – The FIBCI Program shall be 
implemented by city and municipal LGUs for the farmers and farm crops within their 
areas of jurisdiction. The LGU shall conduct an education and information campaign 
regarding the FIBCI program as a group or community crop insurance facility and 
conduct information and education campaign with the help of their barangay officials 
and representatives of participating insurance providers. The farmers shall formally 
register with the Municipal or City Agriculturist at least 45 days prior to the start of crop 
planting, and be provided with a policy contract for the free weather index crop 
insurance, indicating the crop to be insured, farm area and location, start of planting 
and expected harvest schedule and their estimated cost of production using their latest 
expected prices of farm inputs.  
The Municipal or City Agriculturist shall electronically collate the farmers’ 
registration information and provide the PMO a report on the average cost of 


production for the on-going year for the particular crop covered, to be electronically 
submitted to the Provincial Agriculturist and the PMO at least 20 days prior to the start 
of the planting season. The provincial agriculturists shall submit their expected 
cropping calendar for the covered crops in the various municipalities and agriculture-
based cities in their respective provinces.  
 
Section 9. Free Premium and Source of Funding. – To subsidize the free premiums 
of farmers under the FIBCI Program, the amount of P5.8 billion shall beset aside from 
their current year’s Risk Management Fund to form the initial FIBCI Premium Subsidy 
Fund. This fund shall be included as an additional line item in subsequent annual 
national appropriations, as part of the Climate Change adaptation and disaster risk 
mitigation, the amount of which shall be automatically augmented in proportion to the 
applicable inflation rate adopted by the Development Budget Coordinating Council for 
the ensuing year. 
The insurance premium subsidies for the crops and farms of the registered 
farmers shall be securely transmitted electronically to the selected insurance provider 
based upon the submission of the list of registered farmers by the LGUs and/or CDA-
accredited cooperative federations to the PMO; Provided that the premium amount for 
the insurance coverage will not exceed six percent (6%) of the average cost of crop 
production, as certified by the city or municipal agriculturist for the on-going production 
year. 
The insurance service providers shall immediately submit reports to the 
concerned LGU and the FIBCI-PMO on their covered farms and insurance clients for 
the relevant Reference Unit Areas. The insurance providers may independently 
conduct marketing activities to advertise and popularize their insurance services. 
 
Section 10. Index-Based Risk Mitigation Fund. – There is hereby created an Index-
Based Risk Mitigation Fund to be managed by the PMO. Any and all unutilized 
amounts under the FIBCI program for any given year shall accrue to this Fund and 
may be used to further enhance index-based insurance in the country such as any of, 
but not limited to, the following purposes: institution and capacity building, information 
and education campaigns, the enhancement and updating of the data analytics center, 
and improvement of communication and coordination between and among the key 
stakeholders, especially the small farmers. 


 
Section 11. Tax Exemptions. – All premium payments paid for index-based 
insurance contracts registered with the LGUs and coordinated with the PMO shall be 
exempt from VAT and other relevant transaction taxes, including Documentary Stamp 
Taxes. 
 
Section 12. Transitory Provisions. – Initially, the FIBCI Program may commence for 
rice and corn in Reference Unit Areas where weather and crop-correlation data may 
have been compiled and where the insurance and re-insurance providers may offer 
their weather index-based crop insurance service. 
Within a period of five years from the approval of this Act, the PMO shall 
coordinate and partner with the scientific community and relevant research and 
academic institutions on the development of weather and crop-correlation data and 
other needed studies to widen the coverage of weather index-based insurance to other 
agricultural crops and livestock. 
 
Section 13. Penalty Clause. – For the areas and communities that the FIBCI-PMO 
declares as eligible under the FIBCI Program, the elected LGU officials, key 
administrative officers, including but not limited to the Municipal/City Agriculturist, 
Treasurer, and Accountant shall be administratively liable for non-implementation of 
the weather index insurance for their farmers, subject to Chapter 7 Sections47 and 48 
of the Administrative Code (E.O. 292), as amended, and Rule XI (Penalties) under the 
Code of Conduct and Ethical Standards for Public Officials and Employees, (R.A. No. 
6713). 
 
Section 14. Repealing Clause. – All laws, executive orders, rules and regulations, or 
parts thereof, inconsistent herewith are hereby repealed or modified accordingly. 
 
Section 15. Implementing Rules and Regulations. – Within sixty days from the 
effectivity of this Act, the Insurance Commissioner shall convene the FIBCI Oversight 
Board to formulate and adopt the Implementing Rules and Regulations of this Act 
within the ensuing period of three months. The IC shall provide secretariat support to 
the Board. 
 


Section 16. Separability Clause. – The provisions of this Act are hereby declared to 
be separable.  If any provision of this Act shall be held unconstitutional, the remainder 
of the Act not otherwise affected shall remain in full force and effect. 
 
Section 17. Effectivity. – This Act shall take effect upon its publication in the Official 
Gazette. 
 
Approved,