MANILA, June 21 – The government needs to combine the use of various financing and insurance instruments to speed up economic recovery after disasters, according to a study published by the Philippine Institute of Development Studies (PIDS).
Authored by PIDS consultant Deanna Villacin, the study noted that the government has been mainly relying on budget allocations to fund recovery and reconstruction.
“The uncertainties in terms of annual budget allocations and the protracted funds flow processes slow down reconstruction/rebuilding thus, adversely affecting economic recovery of disaster areas,” Villacin said.
The study thus underscored the need for the government to improve its overall disaster risk financing and insurance (DRFI) program.
“DFRI has to be anchored on an adequate, effective (in terms of implementation or execution), and efficient (i.e. cost efficient and timely) strategy,” it said.
Villacin noted that effective DRFI management requires strategies that combine the use of various DRFI instruments or mechanisms.
Such strategies also involve the levels of funding from each instrument based on the risk profile, fiscal position of the government, DRFI objectives and market conditions.
The study further said the structure also needs to address the uncertainty in terms of annual budget allocations to the National Disaster Risk Reduction and Management (NDRRM) Fund, the protracted funds flow processes, and ensuring effectiveness of outputs, integrating build-back-better principles.
The National Economic and Development Authority (NEDA) earlier estimated long-term average losses from disasters amounting to about PHP 206 billion per year.
The cumulative impact of past disasters to the economy was estimated at 0.5 to 0.6 percent of the country’s gross domestic product annually. (LDV/PNA)
