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Managing Risks in East Asia and the Pacific: An Agenda for Action
Box 1.4 Strengthening the Philippines’ Resilience to Disasters Challenge: The Philippines is highly exposed to disasters, with an estimated 74 percent of the population vulnerable to natural hazards. Catastrophic disasters occurring once every 200 years could result in contingent liability in excess of 8 percent in the Philippines, totaling 18 percent or more of total public expenditure (World Bank 2012g). In October 2009, the Philippines was hit by the devastating Tropical Storm Ondoy (Ketsana) and Typhoon Pepeng (Parma), resulting in recovery and reconstruction requirements totaling US$4.4 billion, including US$2.4 billion in public spending needs (Government of the Philippines 2009). In the aftermath of the typhoons, the government of the Philippines with the World Bank and with support from GFDRR and partners (ADB, AusAID, JICA), undertook a post-disaster needs assessment (PDNA) with a series of recommendations to strengthen the country’s resilience to natural disasters. Approach: The World Bank’s engagement has helped to strengthen the policy dialogue on DRM with the government of the Philippines. Based on these recommendations, the World Bank and GFDRR extended analytical support to formulate a disaster risk financing strategy to reduce the fiscal burden arising from the increasing costs of disasters, including the use of an innovative financing mechanism providing contingency financing in case of a national catastrophe. The PDNA was followed up with the development of a flood management master plan for metropolitan Manila to build the resilience of surrounding areas for future flood events, supported by GFDRR, AusAID, and JICA. Action: In 2010 the Philippines signaled a policy shift from post-disaster response to prevention and mitigation. It enacted the DRRM Act and adopted a Strategic National Action Plan for Disaster Risk Reduction (SNAP) shortly thereafter, effectively institutionalizing a comprehensive and integrated approach to disaster risk reduction and management in the country. The law forms the base for the Disaster Risk Management Development Loan with a Catastrophe Deferred Drawdown Option (Cat-DDO), which fulfilled one of the key recommendations of the risk-financing study. This operation is the foundation for the Bank’s ongoing policy dialogue on disaster risk reduction and management (DRRM) with the government and frames planned technical assistance programs. The operation, amounting to US$500 million to provide rapid liquidity in the event of a disaster, was signed by the Philippine government in September 2011. The full amount was disbursed in 2011 after Tropical Storm Sendong (Washi). The figure below illustrates various follow-up activities in recent years. 2009: Manila floods and PDNA
2011: Tropical Storm Sendong
2010: DRM and risk financing policy strengthening
2011: Cat-DDO disbursal
Cat-DDO development
2012: formulation of a risk finance strategy, and preparation of a catastrophe model and assessment
Next steps: The government is in the process of formulating its own risk finance strategy and has requested the World Bank’s support in the preparation of a road map and work plan box continues next page
Strong, Safe, and Resilient • http://dx.doi.org/10.1596/978-0-8213-9805-0