BusinessWorld
Posted on January 01, 2014 10:55:48 PM
THE FINANCE department is pushing for several mechanisms in a bid to help the national government, local communities and the private sector weather the impact of climate-related disasters.
“We’re working on the details right now, we should be ready to formally announce everything by the first few months of 2014,” Mr. Purisima said.
On the national level, he said the government was looking at the establishment of a climate resiliency fund. “The climate resiliency fund is going to be a true special fund. It will be used to climate-proof the Philippines, to make the Philippines more resilient.”
The fund, Mr. Purisima explained, can be used for initiatives such as strengthening -- or even relocating -- public buildings in order to help these withstand massive storms like last November’s Yolanda, or resettling people.
“For example, the Tacloban airport is in a vulnerable zone. The question is, do you keep it there or do you move it somewhere else? These types of questions and expenditures are best dealt with if you really build a fund. That would be intended to do that,” Mr. Purisima said.
“If we want to reduce the vulnerability of the country in the future, we have to manage extremes. There are times there will be too much water, so flood and water management. There will be times when there will be droughts, so we should look at funding projects to address that.”
The Finance chief said the government was studying schemes to implement this and also build resources.
“Meanwhile, at the lowest level, at the grassroots level, we’re actually studying right now, together with the GOCCs (government-owned or -controlled corporations), the BAP (Bankers’ Association of the Philippines), the GFIs (government financial institutions), and the Insurance Commission (IC), the creation of viable, affordable, sustainable insurance products,” Mr. Purisima said.
He noted that a large part of the damage caused by super-typhoon Yolanda was to private property -- houses, offices and farms.
“The natural thing in the future is to set up insurance mechanisms. So we’re studying that, and I think to make it viable, it has to be done in a way that there is maximum participation, so there will probably be government assistance.”
The department is likewise looking at creating a guarantee fund for lending institutions, Mr. Purisima added, to help increase industry access to credit after disasters.
“Banks operate for business. The risks they face when they lend to entities that have lost everything is higher ... So we’re working towards the creation of a guarantee fund,” he said.
“We’re looking at PhilExim (Philippine Export-Import Credit Agency) and other GFIs, like [the Trade department’s] SB Corp., to be able to offer guarantees to banks so they can offer very low interest rates ... and maybe part of this is not just lower interest rates, maybe periods where there will be no payments, grace periods.”
Lastly, the department, along with the IC, is studying mandatory disaster risk insurance for local government units (LGUs).
“This will require legislature [to pass a requisite law] ... but we’re studying this mechanism, where the premium will be taken from [LGUs’] calamity funds ... Most likely, we’ll ask the GSIS (Government Service Insurance System] to be the one to manage this,” Mr. Purisima said.
This measure, he added, can be expanded so that all key facilities -- like markets, municipal buildings and schools -- are insured.
Yolanda (international name: Haiyan), described as the most powerful storm to make landfall, pummeled several provinces in central Philippines last November.
The death toll currently stands at 6,155 individuals with 1,785 still missing. The storm also caused an estimated P36.69 billion in damage to farms and infrastructure.
The government last month unveiled its P361-billion Reconstruction Assistance on Yolanda Plan, which details the recovery road map that will be implemented up to 2017. -- Bettina Faye V. Roc
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