Phl shares disas­ter risk fi­nanc­ing strategies in IMF meet

The Philippine Star - - BUSINESS - By MARY GRACE PADIN

Com­bin­ing dif­fer­ent risk fi­nanc­ing in­stru­ments is an im­por­tant strat­egy to en­able the govern­ment to pro­tect the pub­lic against the im­pact of nat­u­ral disasters, the De­part­ment of Bud­get and Man­age­ment (DBM) said.

Dur­ing a high level di­a­logue with other coun­tries, Bud­get Sec­re­tary Ben­jamin Dio­kno shared the Philip­pines’ ex­pe­ri­ence in disas­ter risk fi­nanc­ing and in­sur­ance, par­tic­u­larly on sources of funds, bud­getary in­stru­ments, and trends.

Dio­kno said fi­nanc­ing for disasters should fac­tor in the tim­ing of post-disas­ter needs, as well as long-term costs of the sources of fi­nanc­ing.

“The Philip­pine govern­ment rec­om­mends com­bin­ing dif­fer­ent risk fi­nanc­ing in­stru­ments to pro­tect against events of dif­fer­ent fre­quency and sever­ity,” Dio­kno said dur­ing the High­Level Di­a­logue on Disas­ter Risk and Fi­nanc­ing and In­sur­ance in In­done­sia.

“Risk lay­er­ing ... en­sures that cheaper sources of money are used first, with the most ex­pen­sive in­stru­ments used only in ex­cep­tional cir­cum­stances,” he added.

Cit­ing the Philip­pines, Dio­kno shared that the govern­ment has a standby loan fa­cil­ity which pro­vides im­me­di­ate liq­uid­ity in the af­ter­math of a disas­ter.

On top of this, he said the Bureau of the Trea­sury has also se­cured a Para­met­ric In­sur­ance Pol­icy from the Govern­ment Ser­vice In­sur­ance Sys­tem (GSIS) that of­fers pay­outs with­out need for ac­tual as­sess­ment loss, but is trig­gered based on mod­elled losses gen­er­ated us­ing the Philip­pines’ catas­tro­phe risk model.

Dio­kno also dis­cussed the dif­fer­ent bud­getary in­stru­ments avail­able for disas­ter risk man­age­ment and re­sponse, such as the Na­tional Disas­ter Risk Re­duc­tion and Man­age­ment Fund, Quick Re­sponse Fund, and Lo­cal Disas­ter Risk Re­duc­tion and Man­age­ment Fund.

He also em­pha­sized the im­por­tance of con­sol­i­dat­ing ef­forts among agen­cies work­ing on disas­ter risk re­duc­tion and man­age­ment.

Dio­kno cited the Philip­pines’ Risk Re­siliency Pro­gram (RRP), a na­tion­wide in­vest­ment pro­gram on cli­mate change, as a prod­uct of in­ter­a­gency ef­forts in the coun­try.

He said agen­cies in­volved in the im­ple­men­ta­tion of the RRP have adopted the DBM’s Pro­gram Con­ver­gence Bud­get­ing (PCB) pol­icy, wherein agen­cies are made to “work as one to meet com­mon ob­jec­tives, in­stead of com­pet­ing for bud­gets.”

“Through Pro­gram Con­ver­gence Bud­get­ing, the RRP has al­lowed the govern­ment to im­prove tar­get­ing of cli­mate in­vest­ments,” Dio­kno said.

The High-Level Di­a­logue on Disas­ter Risk and Fi­nanc­ing and In­sur­ance is one of the key events of the 2018 World Bank- In­ter­na­tional Mon­e­tary Fund An­nual Meet­ings.

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