Disasters cost the Philippine economy US$4 billion annually

Government to create new body to manage disaster-related matters, including risk transfer and insurance

Disasters cost the Philippine economy US$4 billion annually

Insurance News

By Gabriel Olano

The National Economic and Development Authority (NEDA) of the Philippines revealed that the country’s economy suffers around PHP206 billion (US$4.09 billion) in losses each year due to natural disasters.
In response to this, the government will create an independent Disaster Risk Reduction Authority (DRRA) that will lead the nationwide efforts to monitor, supervise, and implement disaster risk reduction and management. This includes coordination with disaster insurance providers to help mitigate losses.

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The 2017 to 2022 Philippine Development Plan (PDP) details: “The authority will be equipped with the necessary competency and resources to engage new actors, particularly in the field of risk transfer and insurance, and build with the necessary structure to manage broader governance arrangements.”
In a statement, Socioeconomic Planning Secretary Ernesto Pernia said that annual cumulative impact of disasters on the economy was at around 0.5% to 0.6% of the entire country’s GDP. This means that these disasters hold back GDP growth by 0.3 to 0.4 percentage points. A GDP growth of 7% would end up being around 6.6% in actuality due to disasters.
According to data from the PDP, agricultural losses due to natural disasters were at PHP163.6 billion (US$3.25) in the period between 2011 and 2015.

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