market-risk

MJ Gonzales│ExecutiveChronicles.com

Somehow it is easy to predict when to sell umbrellas or offer variants of fruit shakes because there are only two seasons in the Philippines. However more often than not, if it rains it may possibly become a typhoon soon.  And aside from rainfall and flood there are also disturbances such as earthquakes and volcanic eruptions, which are very similar to crisis in politics and economy.

Alleviate Seasonal discomforts

Natural disasters are part of the high market risk in the country aside from inflation, peace and order and political dramas. Erratic Philippines’ climate can be a reason for paralyzed traffic, price hike of prime commodities, power interruptions or massive property damages of companies.  In fact there are times that calamities come one after another. If you remember after typhoon Mario’s devastation last year, Mayon Volcano threats to erupt, and there’s a magnitude- 5.1 earthquake occurred in Eastern Guian Samar on October 4 according to National Disaster Risk Reduction and Management Council (NDRMC).

Promoting disaster imaginations, Director of the Department of Science and Technology’s Philippine Institute of Volcanology and Seismology (DOST-PHIVOLCS) Dr. Renato U. Solidum actively advocates that Filipinos should visualize how to cope in lieu of natural catastrophes.

“Possible future hazards and its effects in localities and the whole region must be imagined to craft and implement appropriate solutions. You have the most important role to be not injured, to be alive, during a major event,” Solidum stated in one of his DOST’s information and education campaigns (IEC).

“Pagdating sa disaster ito lang ang dapat ninyong tandaan pagdating sa aral na sinasabi ng ating mga magulang ‘learn from your own mistakes’ tama? Pero pagdating sa disaster baka magkamali ka lang baka wala ka na sa mundo so learn from the mistakes of the others. Iyong mga nga nangyari sa iba na hindi tama ay aralin din natin para hindi na natin gawin,” Solidum explained separately at a Café Scientifique forum held in The Mind Museum.

Checking available remedies

Credit: stocksnap.io
Credit: stocksnap.io

Like Solidum’s risk assessment for disasters, investors must have emergency plans to counter expected market risk.  Diversification is a good move to alleviate unavoidable investments dangers. It’s a cushion for investors if one of their ventures goes flat because they opt to spread their money.  But speaking of lifeline in case of emergency, having insurance is relief too so investors can recover quickly.

Getting insurance is a considerable shield in case of financial disasters due to natural hazards, property damage, injuries, and death. Unfortunately even in the midst of constant flash floods and West Valley Fault line is within Metro Manila, availing insurance is a luxury for individuals and companies.

Though there’s no such thing as Flood Insurance Reform yet in the country like in the United States, most of insurance companies offer policy with act of God (AOG) or act of nature coverage. It’s tricky to find which firm offers extensive support but prudent businessmen can be assured that they are assets are still assets even after a super typhoon come again or earthquake aftershock.