The Department of Finance (DOF), in partnership with the Global Shield Secretariat and Institute for Climate and Sustainable Cities (ICSC), leads the establishment of enhanced climate-disaster risk finance and insurance (CDRFI) mechanisms for the Philippines.

“We aim to craft a proposal for a proactive solution, to be supported by Global Shield financing vehicles, a source of funding that is poised to bolster our financial defenses against the adverse effects of climate change and mitigate loss and damage, especially in the most vulnerable segments of our society,” DOF Chief of Staff and Undersecretary Maria Luwalhati Dorotan Tiuseco said in her speech at the Global Shield Country Workshop on August 13, 2025.

The DOF is the national authority responsible for mobilizing crucial financial resources for the country’s climate actions and solutions. It is currently leading the development of the Climate Finance Strategy and the updating of the Disaster Risk Finance and Insurance (DRFI) Strategy.

The Global Shield against Climate Risks is a joint initiative of the G7 and the Vulnerable Twenty Group of Finance Ministers (V20) aimed at strengthening financial protection in climate-vulnerable countries by providing more and better pre-arranged finance.

The workshop brought together stakeholders from the government, civil society, non-government organizations, private sector, academia, and bilateral and multilateral development partners to introduce the initiative and identify priority action areas for scaling up pre-arranged finance solutions.

The German Ambassador to the Philippines, Dr. Andreas Michael Pfaffernoschke also expressed his support to the Global Shield in-country process emphasizing the role of pre-arranged finance in reducing fiscal impacts of climate and disasters. As one of the G7 countries, Germany is one of the funding partners of Global Shield Against Climate Risks.

The Global Shield Secretariat and the ICSC are assisting the DOF through the In-Country Process, which involves a multisectoral stocktake and gap analysis in order to come up with a comprehensive assessment of the Philippines’ CDRFI landscape.

Pre-arranged finance forms an integral part of the government’s approach to disaster risk management and climate change adaptation. The Philippines has already implemented emergency funds, contingent financing, and sovereign insurance mechanisms under the 2015 DRFI Strategy.

However, a gap remains in establishing CDRFI as a cost-effective and accessible mechanism to address climate-related losses and damages faced by vulnerable people and communities.

“It is important to note that this is not a new strategy on its own. The Global Shield project will complement and be integrated into our broader national efforts,” Undersecretary Dorotan Tiuseco said.

“By investing in CDRFI tools, we are not just bracing ourselves for the next storm––we are making an investment in long-term economic stability,” Undersecretary Dorotan Tiuseco added.

During the workshop, stakeholders assessed the gaps in the Philippines’ CDRFI landscape and proposed action points to expand pre-arranged financial solutions. Participants also identified additional support that could be provided by the Global Shield and its partners.

Discussions during the breakout sessions highlighted the Philippines’ current disaster risk financing instruments, such as contingent finance and the quick response fund, which are used to support vulnerable communities.

The sessions also resulted in recommendations for innovative new instruments, including parametric insurance and micro-insurance. Furthermore, strategies were explored to fully utilize Local Government Units’ (LGUs) Disaster Response Funds for anticipatory financing.

“Resilience is not defined by the lack of vulnerability, but by our capacity to withstand shocks and adapt well in the face of adversity. There will always be challenges over the horizon, but with a strategic approach, we will overcome them,” Undersecretary Dorotan Tiuseco emphasized.