Disasters cost the Philippine economy some P206 billion annually, according to the National Economic and Development Authority (Neda).
In a speech read by Neda Undersecretary Adoracion M. Navarro, Socioeconomic Planning Secretary Ernesto M. Pernia said the annual cumulative impact of disasters on the economy reached 0.5 percent to 0.6 percent of the GDP.
The impact of these disasters eventually cut the country’s GDP by 0.3 to 0.4 percentage point. This means if GDP growth reached 7 percent, the disaster will cut this growth down to 6.6 percent to 6.7 percent.
“Following disasters, we also see increases in school dropout rates, mental and psychological issues, outbreak of communicable diseases, and malnutrition. These have long-term effects, as they reinforce intergenerational transmission of poverty,” Pernia said.
Based on the 2017 to 2022 Philippine Development Plan (PDP), disasters caused by climate change have cost Philippine agriculture to suffer P163.6 billion in production losses between 2011 and 2015 alone.
The Neda said this is the reason the government has embarked on the codeveloping the Socioeconomic Resilience Assessment Methodology, which is based on the analytical framework of the World Bank report, titled “Unbreakable.”
Pernia said the Philippines is the first among the 117 countries to customize the socioeconomic- resilience methodology.
He said the government created an interagency technical working group (ITWG) in October 2015 to work on this methodology.
“This tool will be used to identify the appropriate geographic focus of interventions, and policy and investment priorities aimed at reducing losses, and managing the socioeconomic and fiscal impacts of disasters. Wherever applicable, the results of the resilience assessment will be used to update the Philippine Development Plan,” Pernia said.
In order to address the ill effects of disasters brought about climate change, the government plans to create an independent Disaster Risk Reduction Authority (DRRA) through proposed amendments to the Disaster Risk Reduction Management Act.
The government envisions the DRRA as the agency that will lead the coordination, monitoring, oversight and implementation of disaster-risk reduction and management nationwide.
“The authority will be equipped with the necessary competency and resources to engage new actors, particularly in the field of risk transfer and insurance, and build with the necessary structure to manage broader governance arrangements,” the PDP stated.
The World Bank earlier said natural disasters could cost the Philippine economy as much as 6.5 percent of GDP in well-being losses every year.
In the same Unbreakable report, the World Bank said the country also stands to lose 4.5 percent of GDP in annual average of asset losses.
Based on 2015 data, a 6.5-percent cut in GDP would translate to P493.6 billion, while a 4.5-percent loss would amount to P341.72 billion.
However, the World Bank said some well-being loses could be avoided if countries will put in place measures that would reduce the exposure of poor people to natural disasters.
The World Bank effort should be exerted toward protecting the poor by ensuring they do not live in fragile buildings and are covered by social protection as well as have access to finance.
In the Philippines, using absolute terms and reducing the exposure of 5 percent of poor people to natural disasters, this would already mean avoiding $3.3 billion-worth of well-being and $570 million in asset losses annually.