Seven thousand six hundred and forty-one islands. More than nine-tenths of everything this country buys and sells moves across water. The rice on the table, the fuel in the tank, the steel in the buildings going up around us — all of it arrived by sea. So did the passengers, in their tens of millions, who board a ferry every year because there is no other way home.
For a nation this dependent on the sea, we insure it remarkably poorly.
Start with where the money goes. Most of our imports arrive on terms where the seller abroad arranges the cargo insurance. The premium is earned overseas, the claim is settled overseas, and the Philippine market — which carries the risk of the port, the barge, the warehouse and the last mile — never sees a peso of it. Indonesia and Vietnam have already moved to require that import cargo be insured domestically. We have not. Every year we wait, we export capacity we badly need at home.
Then there is the fleet. Our inter-island vessels are old, and many are very old. Yet hull rates in the domestic market keep drifting downward, driven by competition rather than by anything happening to the risk. Reinsurers have noticed and they are pushing the other way. Let us be honest with ourselves about what this means: cheap cover that cannot survive a bad year is not cover at all. It is a promise waiting to be broken at the worst possible moment.
Our laws are not helping. When cargo is lost or damaged, recovery against the carrier is still governed by limits written generations ago — five hundred US dollars per package, a figure set when a package meant a wooden crate, not a container of pharmaceuticals. The shipper absorbs the shortfall. The insurer absorbs it after that. Nobody is made whole and nobody is made safer.
And then there are the Filipinos with nothing at all. The fisherfolk whose bangka is the family’s entire capital. The small aquaculture operator whose cages are one storm surge from zero. They cannot buy conventional hull cover and no underwriter can profitably sell it to them. But they can be covered — through parametric products that pay on measured wind and wave conditions, quickly and without a survey. That work has begun. It needs to move faster.
New risks are arriving faster still. Lithium battery shipments and misdeclared cargo are now the leading cause of container fires worldwide, and our battery imports are climbing. Offshore wind, meanwhile, will soon require marine construction and cable-laying capacity this market has never written.
None of this is solved by insurers alone. It needs the Department of Transportation and the Maritime Industry Authority (MARINA) on carrier liability and enforcement, the Department of Finance (DOF) on the tax load that makes local placement uncompetitive, the Insurance Commission on parametric pathways and shipowners willing to price safety honestly.
An archipelago that does not insure its seas is not managing risk. It is postponing the bill.
Let us stop postponing it — together.
