Gov’t urged to improve post-disaster reconstruction financing

The study noted the government has already been integrating more ex ante mechanisms, such as contingent credit lines and parametric insurance. (Photo: Philippine Institute For Development Studies/Facebook)

MANILA — The government needs to enhance mechanisms for financing post-disaster reconstruction in the country amid the frequency of occurrence of natural disasters and climate change, said the state think tank Philippine Institute for Development Studies (PIDS).

Deanna Villacin, Tatum Ramos and Marife Ballesteros, consultant, former research assistant and vice president, respectively, at PIDS, said natural disasters in the country have had recorded post-disaster reconstruction needs of about PHP32 billion in the last decade.

“If not effectively managed, such financial requirement can have adverse impact on government fiscal position and consequently to development planning and economic growth,” they said in a policy note.

The study found that while the current post-disaster financing instruments of the government may cover for less-costly recurring events, they will be inadequate to meet the needs to address medium to severe events.

To address this, the authors urged the government to enhance its ex ante financing mechanisms, especially in improving existing indemnity-based insurance programs as “the threat of natural disasters becomes more evident”.

The study noted the government has already been integrating more ex ante mechanisms, such as contingent credit lines and parametric insurance.

It also underscored the need to reduce funds allocated to damaged private properties.

“Given that the housing sector is largely private, the fact that it is receiving the bulk of resources may possibly be at the expense of more critical projects. Instead of allocating huge funds to it, the government should consider strengthening the role of the private sector in addressing damaged properties,” it added.

Aside from funding gaps, the authors further said the government should also improve its implementation processes, specifically those concerning the approval and release of National Disaster Risk Reduction and Management Fund (NDRRMF) and procurement in times of emergency.

The study noted the Office of Civil Defense has already approved the revised guidelines on accessing the NDRRMF, which are expected to facilitate the process.