Carlos G. Dominguez
Secretary of Finance
Event: World Bank’s Philippine Economic Update Online Launch Forum with the theme “Building a Resilient Recovery”
Background: The December 2020 Edition of the World Bank’s Philippine Economic Update includes the recent economic and policy development, growth outlook for the Philippines, and a discussion on Disaster Risk Management and Disaster Risk Financing.
—–
Mr. Ndiame Diop, Country Director for Brunei, Malaysia, Philippines, and Thailand of the World Bank; officials of the World Bank; fellow workers in government; good morning.
Thank you for the opportunity to speak with you today. I congratulate the World Bank for launching this year’s edition of its Philippine Economic Update, with a focus on disaster risk management and financing.
There is an obvious reason for the Philippines’ strong commitment to enhance its disaster and climate risk mitigation strategies.
The Philippine archipelago is located along the Pacific Ring of Fire, home to some of the most active volcanoes. We sit right on the typhoon belt, which is pummeled by an average of 20 tropical cyclones every year. We have been ranked ninth out of 181 nations in this year’s World Risk Index of the most disaster-prone countries.
These calamities inflict human, social, and economic costs on our people. We lose billions of pesos every year in damage to crops, properties, and infrastructure. These mounting losses dampen our overall economic progress.
As we faced the enormous challenge brought by COVID-19 on our people and on our economy, we also had to deal with a number of natural disasters this year.
2020 began with the eruption of the Taal Volcano. This caused much damage to communities just south of Manila. As we close the year, a series of powerful typhoons hit the Philippines in quick succession. They wreaked havoc in 12 out of the 17 regions of our country, claiming dozens of lives and damaging livelihoods and properties.
These recent events have shown that the climate emergency remains a formidable threat to our country—one that can undermine our efforts towards gradual recovery from the pandemic. We are aware that more of these climate-related challenges will come, as they are symptoms of a long-term crisis that we have yet to address.
This difficult year threw a harsh light on our vulnerabilities, but it has steeled our determination to proactively manage our risks and make our communities more resilient.
Over the past years, the Philippine Government initiated numerous programs for climate adaptation and mitigation, disaster risk reduction, and sustainable development.
We have put together a National Climate Change Action Plan, a Catastrophe Risk Model, and a National Asset Registry System to better deal with climate-related risks. In addition, we have a People’s Survival Fund that provides public financing to local government units for climate adaptation programs and projects.
Our National Disaster Risk Reduction and Management Council is organized down to the smallest political units to help localities prepare the logistics needed to save lives in the face of calamities.
We acknowledge the urgency of putting forward stronger climate adaptation and mitigation measures to ensure that Filipinos will not just survive, but thrive in a new and resilient economy that we are building.
The Philippines is turning the pandemic into an opportunity to accelerate our efforts to build sustainable and safer cities.
We are shifting our investments to clean energy resources and green technologies. In fact, the Philippines recently declared a moratorium on endorsements for greenfield coal power plants. We also liberalized foreign investments in the geothermal sector. These strides in utilizing clean energy sources are a confirmation of our country’s strong resolve towards sustainable development.
We also remain focused on ramping up our infrastructure program and pushing structural reforms that will improve business environment, foster competition, reduce trade costs, fast track the digitalization of our economy, and strengthen the country’s resilience to natural disasters.
We are fortunate to have faced the contagion and other calamities this year with strength on the food security front. The key components of our success in this area are the Rice Tariffication Law and the Agriculture Department’s effective management of our food supply.
As part of our economic recovery strategy, we will hasten the modernization of Philippine agriculture to boost the sector’s resilience against future emergencies.
We are also committed to deploy financial tools to build resiliency from the household to the national levels. We will constantly widen the inclusivity of our financial system by increasing the use of modern technologies.
Our financial readiness gave us solid footing in the battle against COVID-19. We owe this in large part to President Rodrigo Duterte’s prudent fiscal policy and political will to pursue reforms since the beginning of his term.
The series of tax reforms and other game-changing measures we passed over the last four years have strengthened our fiscal and economic stamina. Our sound financial position gave us the headroom needed to reallocate budget items and access emergency financing to fight the pandemic and address the aftermath of calamities that struck this year.
Even as we have to spend more for our COVID-19 and disaster response efforts, we will continue exercising fiscal discipline to ensure the resilience of our economy. We do not know when the next health crisis or disaster will be, but we know that it will come. We must be prepared.
We will strengthen the integration of disaster risk mitigation in our fiscal strategy. We will also explore innovative financing structures to proactively protect the fiscal health of our government against adversities.
The World Bank has been a staunch partner of the Philippines in all of its disaster response efforts by providing access to appropriate financing products.
Last year, the Bank helped us approach the international financial markets through the issuance of our first ever Insurance-Linked Security or CAT bond.
The Bank is currently supporting the Philippines through the Third Disaster Risk Management Policy Loan. This financing package aims to strengthen our country’s capacity to prepare for, respond to, and recover from natural disasters, including health emergencies like COVID-19.
The policy loan support follows two earlier Risk Management Development Policy Loans with a Catastrophe-Deferred Drawdown Option. These facilities effectively provided the government with immediate liquidity to help fund its disaster relief and reconstruction efforts.
We look forward to a strengthened partnership with the World Bank as we boost our competitiveness and financial sustainability while enhancing resiliency.
Even as we transition to a more sustainable domestic economy, the Philippines joins the call for broader international climate justice. While we are not just among the world’s heaviest emitters of greenhouse gases, we are one of the most vulnerable to the destructive effects of global warming. Climate justice is indispensable to achieving resiliency.
Under the leadership of President Duterte, the Philippines assumes its responsibilities under the framework of the Paris Agreement in fighting the climate crisis. We respect the regulatory benchmarks for allowable carbon emissions. We urge all countries to adhere firmly to their respective commitments under the agreement. We must also work together to come up with a broader and more comprehensive international climate action plan.
Protecting communities in climate-vulnerable countries like the Philippines must become a global effort. Our present challenges are previews of what other countries will face if the climate crisis worsens. If the international community beats back the climate emergency in frontline countries like the Philippines, we are more likely to succeed in adapting to this global challenge elsewhere.
We must fight the climate crisis on all fronts. Unlike COVID-19 in which vaccine development continues to make headway, there is no quick-fix solution to the warming of our planet. The effects of the climate emergency will be disastrous over the coming years unless we find the courage and resolve to undertake the measures needed to reverse it.
All nations and international stakeholders must raise cooperation on the climate crisis to the highest level.
Thank you.
@@@