PHILIPPINES - World Banksiteresources.worldbank.org/INTPHILIPPINES/Resources/PDNAVol2...Table 59 Ranking of Disaster Related Fatalities in the Philippines ... Figure 4 Comparative

i P O S T - D I S A S T E R N E E D S A S S E S S M E N T

P H I L I P P I N E STYPHOONS ONDOY AND PEPENG:

Post-Disaster Needs AssessmentSECTOR REPORTS

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INTRODUCTION 1

PRODUCTIVE SECTORS 5 Agriculture 6 Enterprise Sector 21

SOCIAL SECTORS 35 Housing Sector 36 EducationSector 50 Cultural Heritage 57 Health 59

INFRASTRUCTURE SECTORS 67 Electricity Sector 68 WaterSupplyandSanitationSector 75 Flood Control, Drainage and Dam Management 82 TransportSector 90 Telecommunications 96

CROSS-SECTORALISSUES 101 LocalGovernment 102 ImpactonEmploymentandLivelihoods 109 Social Impacts and Vulnerable Groups 117 Financial Sector 131 DisasterRiskReductionandManagement(DRRM) 145

Table of Contents

iii P O S T - D I S A S T E R N E E D S A S S E S S M E N T

Table 1 Damage and Losses in Agriculture SectorTable 2 Needs in Agriculture SectorTable 3 Damage in Agriculture Sector, by Region and by SectorTable4 ProjectedLossesfromLevel2DamagedAreas,byRegionTable 5 Total Losses in Agriculture Sector, by Sub-SectorTable 6 Crop Losses, by Region and by CommodityTable 7 Rice Production Loss, by RegionTable 8 Corn Production Loss, by RegionTable 9 HVCC Production Losses, by RegionTable10 SummaryofLossesintheLivestockSub-SectorTable11 SummaryofLossesintheFisheriesSub-Sector,byRegionTable12 DistributionofEstimatedLossesintheForestrySub-SectorbyRegion/ProvinceTable 13 Recovery Costs in Agriculture Sector, by Component and by CommodityTable14 NeedsoftheForestrySector,byRegionTable15 DamageandLossesinManufacturingTable 16 Damage and Losses in Wholesale and Retail TradeTable 17 Damage and Losses in TourismTable18 ReconstructionandRecoveryNeedsAssessmentinManufacturingTable19 ReconstructionandRecoveryNeedsAssessmentforWholesaleandRetailTradeTable20 ReconstructionandRecoveryNeedsAssessmentforTourismTable21 Damage,Losses,EffectontheExternalSectorandFiscalBudgetTable22 SummaryFinancialNeedsforReconstructionandRiskMitigationforHousingSectorTable23 AveragePhysicalDamagebyHousingTypeandLevelofDamageTable24 AverageDamageofHouseholdItemsbyHousingTypeandLevelofDamageTable25 Damage,Losses,EffectontheExternalsectorandFiscalBudgetforHousingSector, by RegionTable26 HousingReconstructiontoReplaceand“BuildBackBetter”HousingUnitsTable27 HousingConstructionRequiredtoEstablishSafeand“BuildBackBetter”Housingfor

Families Living Neat Water Hazards in Metro ManilaTable28 ProposedHousingSolutionsfortheReconstructionTable29 PercentageShareofDisaster-AffectedAreasinNationalStatistics, byTypeofFacilityTable30 Public-PrivateDistributionofEnrollmentandSchoolsinDisaster-AffectedAreas

List of Tables

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Table31 SummaryofDamageandLossesintheEducationSectorTable32 SummaryofDamageandLossesEstimatesintheEducationSector,byRegionTable33 SummaryofNeedsintheEducationSectorTable34 OwnershipStructure:EducationSectorTable35 Damage,Losses,ImpactontheExternalSectorandFiscalBudgetforCulturalHeritageTable36 NeedsforRecoveryandReconstructionforCulturalHeritageTable37 NumberandTypeofOwnershipofHealthFacilitiesintheAffectedAreasTable 38 Damage and Losses in the Health Sector, by Regional Distribution andbyTypeofOwnership(inPhpmillion)Table 39 Recovery and Reconstruction Needs in the Health SectorTable40 DamageandLossesinElectricitySector,byRegion(inPhpmillion)Table41 DamageandLossesinElectricitybySub-sector(inPhpmillion)Table42 GenerationLossTable43 DistributionSub-SectorDamageandLossesTable44 ForeignExchangeRequirementsTable45 RecoveryandReconstructionNeedsTable46 FinancingNeedsforRecoveryandReconstructionTable47 Medium-TermReconstructionNeeds(inPhpmillion)Table48 SummaryofRoadsDamageandLossesTable49 DamageandLossesinTransportSector,byRegionTable50 RecoveryandReconstructionNeedsTable51 EstimatedCostsofDamageinTelecommunicationsSectorTable52 EstimatedCostofRepairsTable 53 Estimated Damage to LGU AssetsTable54 EstimatedLGULossesTable55 PriorityRecoveryandReconstructionNeedsintheLGUSector(inPhpmillion)Table56 ImpactonLivelihoodsandIncomeLossesin2009,bySectorTable 57 Priority Activities to Recover Lost Livelihood IncomesTable 58 Needs in the Financial SectorTable59 RankingofDisasterRelatedFatalitiesinthePhilippines,1990-2007

List of Tables

v P O S T - D I S A S T E R N E E D S A S S E S S M E N T

Figure1 Philippines:TotalDamageandLossesfromTyphoonsOndoyandPepeng fortheEnterpriseSector

Figure2 GeographicDistributionofGrossValueAdded (Manufacturing,WholesaleandRetailTradeandTourism)

Figure 3a Housing Stock Totally Damaged, by TypeFigure 3b Housing Stock Partially Damaged, by TypeFigure4 ComparativeIncidenceoftheLeadingCausesofMorbidityintheAffectedAreas

DuringthePost-DisasterPeriodfromAugusttoOctoberwiththeSamePeriodofthePrevious Year

Figure5 DamageandLossestoWaterSupplyandSanitation,byOwnershipFigure 6 Peak Flood Discharge in Marikina RiverFigure7 DamagetoFloodControlInfrastructureFigure 8a Sector Share to Total Losses in IncomeFigure 8b Sector Share to Total Losses in WorkdaysFigure 9 Total Income Losses, by RegionFigure10 ExampleofaRiskMitigationFacility

Map 1 Damage and Losses in Enterprise Sector, by RegionMap 2 Damaged Housing, by RegionMap3 ImpactonInformalLivelihoods,byRegion

List of Figures

List of Maps

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Acronyms and Abbreviations

AADT AverageAnnualDailyTrafficBayantel BayanTelecommunications,IncorporatedBHS BarangayHealthStationBOM BureauofMaintenanceBPO BusinessProcessOutsourcingBSP BangkoSentralngPilipinasCAAP CivilAviationAuthorityofthePhilippinesCAR Cordillera Administrative RegionCBDRM Community-BasedDisasterRiskManagementCCA Climate Change AdaptationCDS City Development StrategiesCIS Communal Irrigation Systemckt-km Circuit KilometersCOA Commission on AuditDA DepartmentofAgricultureDECORP Dagupan Electric CorporationDENR DepartmentofEnvironmentandNaturalResourcesDepEd DepartmentofEducationDFON DomesticFiberOpticNetworkDigitel Digitel Corporation DILG DepartmentofInteriorandLocalGovernmentDOH DepartmentofHealthDOT DepartmentofTourismDOTC DepartmentofTransportationandCommunicationsDPWH DepartmentofPublicWorksandHighwaysDRM Disaster Risk ManagementDSWD DepartmentofSocialWelfareandDevelopmentDTI DepartmentofTradeandIndustryDU Distribution UtilitiesEC Electric CooperativesECCD Early Child Care DevelopmentECLAC EconomicCommissionforLatinAmericaandtheCaribbeanEO ExecutiveOrderEPI ExpandedProgramonImmunizationERC Energy Regulatory CommissionERS Emergency Restoration StructuresGFI Government Financing InstitutionGlobe Globe Telecom, IncorporatedGOP GovernmentofthePhilippinesGSIS GovernmentServiceInformationSystemGWh Gigawatt-hoursha hectare

vii P O S T - D I S A S T E R N E E D S A S S E S S M E N T

HFA HyogoFrameworkforActionHVCC High Value Commercial CropsIAS International Accounting StandardsIASC Inter-Agency Standing CommitteeIPC InstituteofPhilippineCultureIPP IndependentPowerPlant/ProducerJMC Joint Memorandum CircularJTWC Joint Typhoon Warning Systemkv KilovoltLGC Local Government CodeLGU Local Government UnitLGUOU LocalGovernmentUnit-OwnedUtilitiesLLDA Laguna Lake Development AuthorityLRT Light Rail Transit SystemLWUA Local Water Utilities Administration MDB MultilateralDevelopmentBanksMDF Municipal Development Fund MDFO MunicipalDevelopmentFundOfficeMERALCO Manila Electric CompanyMFI MicrofinanceInstitutionMMDA Metro Manila Development Authoritymn ha Million Hectaresmn MT Million Metric TonsMRT Metro Rail Transport SystemMSME Micro and Small Medium EnterprisesMt Metric TonsMVA Megavolt-amperesMW MegawattMWCI Manila Water Company IncorporatedMWSI Maynilad Water Services IncorporatedNAMRIA NationalMappingandResourceInformationAuthorityNCR National Capital RegionNDCC National Disaster Coordinating CouncilNDTN NationalDigitalTransmissionNetworkNEA NationalElectrificationAdministrationNEDA National Economic and Development AuthorityNGCP NationalGripCorporationofthePhilippinesNGO Non-government Organization NIA National Irrigation AdministrationNIS National Irrigation SystemNPA Non-PerformingAssetNPC NationalPowerCorporation

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NPL Non-PerformingLoanOCD OfficeofCivilDefenseO&M Operation and MaintenancePAGASA Philippine Atmospheric, Geophysical and Astronomical Services AdministrativePAGASA Philippine Atmospheric, Geophysical and Astronomical Services AdministrativePCG Philippine Coast GuardPDF Philippines Development ForumPDNA Post Disaster Needs AssessmentPiltel Pilipino Telephone CorporationPLDT Philippine Long Distance Telephone CompanyPNRC Philippine National Red CrossPOW ProgramofWorksRHU Rural Health UnitRMF Risk Mitigation FacilityRTIA RoadTrafficInformationApplicationSNAP Strategic National Action PlanSPUG SmallPowerUtilitiesGroupSPV Special Purpose VehicleTB-DOTS Directly-ObservedTreatmentScheduleforTuberculosisTelicphil TelecomsInfrastructureCorporationofthePhilippinesTOR TermsofReferenceTRANSCO National Transmission CorporationUN United NationsVAT ValueAddedTaxVOC Vehicle Operating Costs

Acronyms and Abbreviations

1 P O S T - D I S A S T E R N E E D S A S S E S S M E N T

The Post-Disaster Needs Assessment carried out in the aftermath of typhoons Ondoy and Pepeng (international name Ketsana and Parma, respectively) presents a quantification of the damage and losses to the economy, the social and economic impacts of the disaster, as well as a recovery and reconstruction strategy to address these.Thehighlightsofthesector-specificanalysisandtheprioritiesforreconstructionarehighlightedintheMainReport.Thesectorspecificassessments,whichinformedthereport’sconclusions,arepresentedinthepresentVolume.

The methodology usedfocusedtheanalysisonbothdamageandlossesandontheeconomicandsocialimpactsasfollows:

• Damage (direct impact)referstotheimpact(valuedatagreedreplacementcosts)onassets,stockandproperty.Theassessmenttakesintoaccountthelevelofdamageintermsofwhetheranassetcanberehabilitatedorrepairedoriftheassethasbeendestroyedcompletely.

• Losses (indirect impact)refertoflowsthatwillbeaffected,suchasproductiondeclines,reducedincomes,andincreasedexpendituresuntiltheeconomyandassetsarerecovered.Theestimatesarequantifiedatpresentvalue.

• Economic and social impacts include macroeconomic impacts, poverty impacts, employment andlivelihoodsimpacts,andsocialimpacts.Theanalysisaimstomeasuretheseimpactsatthenationalandsub-nationallevels.Qualitativeresearchmethods(focusgroupdiscussions,in-depthinterviewsandparticipantobservation)werealsousedtoprovideanoverviewofthedisaster’ssocialimpact.

The assessment of damage and losses provides a basis for determining recovery and reconstruction needs. Theassessmentofdamageprovidesabasisforestimatingreconstructionrequirements,whiletheestimationoflossesprovidesanindicationofthereductionordeclineineconomicactivityandinpersonalandhouseholdincomearisingfromthedisasters.Thetwoestimatesarethencombinedtoestablishoverallneedstoachievefullrecoveryofeconomicactivitiesatthemacro-economiclevelandattheindividualorhouseholdlevel.

Typhoons Ondoy and typhoon Pepeng caused substantial damage and losses, equivalent to about 2.7 percent of GDP.Thestormshitregionsofthecountrythataccountforover60percentofGDP(includingtheNationalCapitalRegion,whichaccountsforabout38percentoftotalGDP).Theadverseimpactsontheproductivesectorswerelargelyduetodamagedorlostinventories,rawmaterialsandcrops.Inaddition,businessoperationswereinterruptedbypowerandwatershortages,damagedmachinery,andabsentemployees,whichcontributedtoanoverallreductioninproductioncapacity.Asaresult,thedisasterisexpectedtohaveanegativeimpactonGDPgrowthintheshortterm.However,onceprojectedpublicandprivaterecoveryandreconstructionspendingareincluded,thenetimpactofthedisastersoneconomicactivityisexpectedtoresultinrealGDPgrowthof1.0percentin2009and3.5percentin2010whichimpliesadeclineofabout0.4percentagepointsin2009,followedbyanincreaseofabout0.4percentagepointsin2010,overthepre-disastergrowthestimates.

The poor and vulnerable were inordinately affected by Ondoy and Pepeng, and efforts to help restore their housing and their livelihoods are needed urgently.Inurbanareas,itisthepoorwhoconcentrateininformalsettlementsinat-riskareassuchasfloodplains.Similarly,inruralareas,itisthepoorestwhoenduplivingindangerousareassuchasriverembankments.Forthoselivingjust

Introduction

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abovethepovertyline,suchdisastersarelikelytopushthembackintopoverty.Indeed,thisPDNAestimatesthatinthemostaffectedareasofLuzon,theincidenceofpovertyin2009couldincreasebyasmuchas3percentagepointsasaresultofOndoyandPepeng,andby0.5percentagepointsnationwide.

A total of US$ 942.9 million is required to meet recovery needs, and a total of US$ 3.48 billion is required for the reconstruction efforts over the short term (2009-10) to medium term (2011-12). Inimplementingrecoveryandreconstruction,andlookingbeyondtherecentdisasterstothefuture,someareasstandoutasmeritingparticularattention.Inparticular:

• Rural Production: Immediaterestorationofrurallivelihoodsbeforetheendoftheyearisnecessarytoavoidlossofproductionduringthedryseason.

• Flood Management: Givenitsvulnerabilitytoflooding,protectingmetropolitanManilarequiresinstitutionalchanges,comprehensiveplanning,andinvestmentinbothrestorationandnewinfrastructure.

• Housing:Thevastmajorityofdamagetothehousingstockwasconcentratedintheinformalsectorwhichservesmainlylow-incomefamilies,sobuildingbackbettermeansprovidingbetteralternativesforinformalsettlers.

• Disaster Risk Reduction and Management (DRRM): TheexistingDRRMsystemneedstobecomemoreproactive,coherent,andeffective.

• Local Governance: LGUsshouldhaveakeyroleinimplementingtherecoveryandreconstructionprogramandfuturemeasurestomitigatedisasterrisk.

• Enterprise and Finance:Enterprisesneedtoregainworkingcapitaltoresumeactivitiesandwillneedaccesstofinancinginordertodoso.

Certain over-arching guiding principles will be essential to moving forward with the reconstruction program. Thepurposeoftheseprinciplesistoenhancetheeffectivenessofrecoveryandreconstructionefforts,increasetransparencyandaccountability,andensurethatresourcesaretranslatedintoresultsontheground.

• A transparent, accountable, and results-based recovery and reconstruction program. Itwillbeimportanttodevelopcomprehensiveandstraightforwardsystemsformonitoringactivities,trackingfunds,andevaluatingprojectsandprograms,includingtheprovisionofregularandtransparentreportingagainstallfundingsources.

• Community-based, people-centered, and equitable approaches. Community-based,participatoryapproachesthatengagelocalcommunitiesindecision-making,implementation,andmonitoringofactivitieswillincreasethequalityandspeedofreconstruction,alignprojectswithrealneeds,andlowertheriskofmisuseoffunds.

• Reduction of future risks. With typhoons being a regular occurrence in the Philippines, integrated disasterriskmanagementplansthattakeintoconsiderationalllikelysignificanthazardsareneededtoreducetheimpactoffuturedisasters.


The reports contained in this second volume of the PDNA present technical notes, by sector, on the derivation of damage, losses, and needs presented in the Main Report. They are the product ofjointtechnicalteamscomprisedofgovernmentagencies,localgovernmentunits,civilsocietyorganizations,privatesectorfirms,academia,andinternationaldevelopmentpartners.Thereportsalsopresentarecoveryandreconstructionframeworkforeachsector,whicharethebackboneoftherecoveryandreconstructionprogramoutlinedintheMainReport.Theyareintendedtoinformthedebateanddiscussiononhowtorefine,budget,andimplementtherecoveryandreconstructionplan.Theypresentpossiblesolutionstoassistthechallengingpolicyandprogramchoicestobemadegoingforward.Thereportslayoutoptionsforactionintheshortandmediumtermsothatnationalgovernment,localgovernmentunits,andthepeopleaffectedbythedisasterscanrebuildbackbetterandbemoresecurefromsuchdisastersinthefuture.Thefindings,interpretations,andconclusionsexpressedintheSectorReportsdonotnecessarilyreflecttheofficialviewsoftheorganizationsinvolvedinthepreparationofthisvolume.

QuestionsaboutthePDNAcanbeaddressedtoMr.RicardoSaludo,SecretaryGeneraloftheSpecialNationalPublicReconstructionCommission([email protected]);JehanArulpragasam,TaskTeamLeader,PDNATeam([email protected]);andAndrewParker,Co-TaskTeamLeader,PDNATeam([email protected]).

4 P H I L I P P I N E S T Y P H O O N S O N D O Y A N D P E P E N G4 P H I L I P P I N E S T Y P H O O N S O N D O Y A N D P E P E N G

Productive Sectors

“This was the roof of our shoes/slipper factory. We manufacture shoes and slippers which my children sell in the town center. . . So we did not leave our house because the machines/equipments which we use in making shoes and slippers might be stolen. ” -AresidentofPataynaIlog (DeadRiver)inBiñan,Laguna.

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AgricultureSummary TyphoonsOndoyandPepengcausedatotalofPhp3.8billionindamageandPhp24.8billioninimmediatelosses1 intheagriculture,fisheries,andforestrysector.Itadverselyaffectedatotalofabout480,000farmers2in7regionsofLuzon:CordilleraAdministrativeRegion(CAR),Regions,I,II,III,IV-A,IV-B,and5.Intermsofdamages,theseweremainlyconcentratedontheirrigationsassetsinthecropsub-sector(Php3.4billion)andintheforestry(Php0.4billion)sub-sector.Thecropssub-sectoralsoborethemajorbruntoftheimmediatelosses(Php23.5billion)followedbythefisheriessub-sector(Php1.2billion).Bycommodity,riceaccountedfor87percentoftheimmediatelosses.Meanwhile,agribusinesslosses,definedastheimpactoflossesininputsforfoodprocessingduetothetyphoons,wereestimatedtoreachPhp4.8billion.

Table 1: Damage and Losses in Agriculture Sector (in Market Prices in Php million)

Sub-sector Damage and Losses

Losses Damage Total Damage and Losses

Standing Crop

Total Loss - Scenario 1



With Standing

Crop Losses Only

With Standing Crop and Projected

2010 Losses (Scenario 1)





Crop Irrigation

23,454-

28,747-

34,819-

46,184-

-3,368

26,822 32,116 38,187 49,552

Livestock/Poultry

71 71 71 71 1 72 72 72 72

Fisheries 1,205 1,205 1,205 1,205 26 1,231 1,231 1,231 1,231

Forestry 58 58 58 58 369 427 427 427 427

Total 24,787 30,081 36,152 47,517 3,765 28,552 33,846 39,917 51,282

Scenario1-Lossesonlyaccrueduringdryseasonandallstructuresarerepairedbeforestartofthewetseason.Scenario2-LossesaccrueduringdryandwetseasoninCY2010Scenario3-lossesaccrueasduringdryandwetseasoninCY2010andanotherdryseason.

AroundPhp13.7billionwasestimatedtobeneededfortherecoveryofthesector.ThisincludesPhP1.4billionfortherestorationoflevel-13damagedirrigationsystems.About89percentoftheamountwillbesourcedfrompublicfunds,whichmayyetdecreaseasgovernmentfurtherfine-tunesitstargetinganddiscriminatesamongvaryingdegreesofdamagesintheaffectedareas.ReconstructionrequiresPhp2.8billionofwhich85percentareforrestoringlevel-24 damaged

1 Referstolossesfromstandingcropsandfromproductsoflivestock/poultry,fisheriesandforestry.2 Referstocropfarmersbothfullyandpartiallyaffectedbythetyphoons.Thisfigurewasestimatedbysummingthenumber

ofaffectedfarmerspercropeachderivedbydividingthenumberofhectaresaffectedbythetyphoonspercropbytheaverageregionalsizeoflandholding(inhectares)perfarmerpercrop.

3 Non-structuraldamagesthatareeasilyrepaired,suchasdesiltingofirrigationcanals4 Structuraldamagesthatwillrequiremajorrepaireffort.

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irrigationsystems.About99percentofthereconstructionrequirementswillcomefrompublicfunds.Giventherelativemagnitudeofthedamageandlosses,therecoveryandreconstructionforthesectorshouldprioritizethericefarmingareas,especiallyinRegions,I,IIandIII.Inordertopreventfurtherlossesincomingdryseasonharvests,ricefarmersshouldbeabletoplantbyDecember2009.Level1damagesinboththeNationalIrrigationSystem(NIS)andCommunalIrrigationSystem(CIS)mustalsobeaddressedbyendof2009atthelatest.Thelossinriceproductionwoulddramaticallyincreaseifpossiblelossesin2010areincludedduetolevel2damagesinirrigationinfrastructure.ItcouldrisetobetweenPhp30billiontoPhp47.5billion,dependingonwhenthesedamagesarerepaired.Thisunderscorestheneedforimmediateactiononirrigationreconstruction.

Table 2: Needs in Agriculture Sector (in market prices in Php million)

Sub-sector

Needs

Recovery Reconstruction Total

Short-term Medium-term By type of ownership

Public Private Public Private Public Private

Rice 8,679 - - - 8,679 -

Irrigation 1,4005 - 2,4006 - 3,800 -

Corn 563 - - - 563 -

HVCC 1,3317 1,331 - - 1,331 1,331

Livestock/Poultry - - 18 - 1

Fisheries 200 200 139 13 213 213

Forestry - - 380 - 380 -

Total 12,173 1,531 2,795 13 14,967 1,544

ThefinalcostofrecoveryandreconstructionwilldependonthemodalitiestheGovernmentofthePhilippines(GOP)choosestodelivertheseprograms.Thesecouldrangefrom(a)transfersinkindofkeyproductioninputs,suchasseedsandfertilizers;to(b)thedistributionofvouchersthroughwhichbeneficiarieswouldbeabletopurchasecommercialinputsatauthorizedstores,to(c)thecashtransferstobeneficiariesconditionedonclear,simple,criteria.Alternativeformsofdistributionwillentaildifferentadministrativecostsandtimeframesfordelivery.Moreover,ensuringsimplicityaswellastransparentandcost-efficienttransferarrangementswillbeimportanttoeffectivelyaddresstheidentifiedprioritysetofneeds.Inaddition,prioritizationofassistanceshouldtakeintoconsiderationboththemagnitudeandintensityofthelossesinagivenarea.

Background

Althoughtheagriculture,fisheryandforestrysectoraccountsforonlyabout16percentoftotalGDP,itis,nevertheless,crucialtothePhilippineeconomy.Itaccountsfornearly40percentoftotalemployment.Abouttwo-thirdsofthenation’s92millionpopulationandthree-fourthsofthepoordepend,atleastinpart,onthesectorfortheirlivelihood.In2008,thecountryrecordedagriculturalexportearningsofPhp182.8billionwhileagriculturalimportsreachedPhp361.5billion.Thecountryhasbeenanetimporterofagriculturalgoodssince1995.About10percentofthecountry’srice

5 Referstolevel-1repairs6 Referstolevel-2repairswithadditional20percentforimprovements7 ReferstovulnerablemembersamongHVCCfarmers8 Referstovulnerablemembersamonglivestock/poultryfarmers9 Referstovulnerablemembersoffisherfolks


needsisimported.Thecropssub-sectoraccountsformorethan60percentofthesector’soutputwhilefisheriesandlivestock/poultryrespectivelyaccountforabout20percentand16percent.Althoughtheforestrysector’scontributiontoproductionisminimal(about0.3percent),itsroleinsustainabledevelopmentisparamount.

Crops

Thetotalareaplantedinthecountryisabout12.9millionhectares(mnha).Thecroppingpatternisdominatedbyrice(4.5mnhaeffectiveareaplanted/harvestedwith3.0mnhaeffectiveareairrigated),coconut(2.7mnha)andcorn(2.7mnha).Therestisdevotedtosugarcane,highvaluecommercialcrops(includingvegetables,fruittrees,banana),andpasture.Productionofriceandcornamountstoabout16.8and6.9millionmetrictons(mnMT)respectively.Riceproductioncontributesabout19.8percentoftotalcropproduction.Coconutoilandbananasremainthecountry’stopagriculturalexportswithacombinedshareof37.2percent.

Irrigationhasbeencriticaltoenhancingfoodsecurityandimprovingagriculturalproductivity.PublicirrigationinthePhilippineshasbeentheresponsibilityoftheNationalIrrigationAdministration(NIA),whichisagovernment-ownedandcontrolledcorporation.TheNIAoperates205NationalIrrigationSystems(NIS)withatotalserviceareaofabout306,377hectares(ha)devotedmostlytoricefarming.Thisconstitutesroughlyhalfofthetotalirrigationserviceareainthecountry.TheotherhalfisservedbyCommunalIrrigationSystems(CIS)thatareownedandoperatedbycommunity-basedirrigators’associations(IA)andpump-liftirrigationsystemsthatareownedandoperatedbytheprivatesector.Thisbringsthetotalserviceareato1.43mnha,whichislessthanhalfofthetotalestimatedpotentialirrigableareaof3.13mnhainthecountry.Asaresultoflowinvestmentinoperationandmaintenanceduringthepasttwodecades,thegapbetweentheserviceareaandtheactualirrigatedareahasincreasedconsiderably.Asaresult,theNIAiscurrentlyintheprocessoftransferringincreasedO&MresponsibilitiestotheIAs.

Livestock/Poultry

Livestockandpoultryraisingareintegraltothecountry’sfarmingsystemsofallsizes.In2008,1.9mnMToflivestockmeatand0.76mnMTofpoultrymeatwereproduced.TheirtotalvaluewasestimatedatPhp184billionandPhp131billionforlivestockandpoultry,respectively.IntermsofcontributiontoagricultureGVA,livestockaccountedfor14percentwhilepoultrycontributed8percent.Swine,cattle,carabaoandgoat,inthatorder,arethemajorsourcesoflivestockmeat,whileinpoultrythemajorsourcesarechickenandducks.Chickenranksfirstamongpoultrywithavolumeofproductionof1.3mnMTin2008.However,inordertomeetdomesticsupplyneeds,thecountryimported43,758MTofpoultrymeat,49,837MTofbeefmeatand83,014MTofporkmeatin2008.

Fisheries

In2008,thetotalvalueoffisheryproductionreachedPhp215.5billionofwhich38percentcamefromaquaculture,33percentfrommunicipal(i.e.,smallscale)fishing,and29percentfromcommercialfishing.Thissectoremployedatotalof1,614,368fishingoperatorsnationwide(NSO2002censusforfisheries)ofwhich14percentwereinaquacultureactivities,while85percentandonepercentwereinmunicipalandcommercialfisheries,respectively.In2006,thePhilippinesranked10thintheworldinaquacultureproduction,contributing1.2percentoftotalglobalproductionof51.7millionmetrictons.Thisincludesproductionfrombrackishwaterfishponds,freshwaterfishpondsandfishpensandfishcagesinfreshandmarinewaters.Milkfish,tilapiaandtigerprawnsaretheaquaculturespeciesthatprovidethebiggestcontributiontothetotalvalueofproduction.


Forestry

ThePhilippineupland/forestecosystemcomprisesanestimated50percentofthecountry’stotallandareaanddirectlysupportsapproximately30percentofthepopulation,includingindigenouscommunities.Theforestecosystemprovidesvitalgoodsandservices.Theseincludewater,timberandnon-timberforestproducts,fuel-wood,wildlife,recreation,climateameliorationandwindbreaks.Forestecosystemsplayacriticalroleinregulatingwaterflowregimesandmaintainingspeciesdiversity,andincarbonsequestrationtomitigateglobalwarming.Theforestcoverisestimatedat7.2mnhaor23.9percentofthetotallandarea,basedon2002satellitemapping.Inthesecondquarter2009,totalproductionfromthesubsectoramountedtoPhp1.2billionincurrentprices.Butmoreimportantly,italsoprovidedecologicalbenefitstoagriculturalproduction,industries,waterandpowerneeds.

Damage and Losses

InitialestimatesofthetotaldamageoftyphoonsOndoyandPepengforthesectoramounttoPhp3.8billion,89.5percentofwhichareinNationalIrrigationSystems(NIS)andCommunityIrrigationSystem(CIS).Forestrypostedthenexthighestdamage,accountingforabout9.8percentoftotaldamages,followedbyfisheries(0.6percent)(seeTable3).

RegionIiswheremostofthedamagestoirrigationassetsoccurred(Php963million).ItwasfollowedbyRegionIIIwithPhp935million,RegionIIwithPhp572million,CARwithPhp420million,RegionIV-AwithPhp259million,RegionVwithPhp162million,andRegionIV-BwithPhp64million.

Mostofthedamagestoforestry(Php352million)wereintheCAR,whilemostdamagestolivestocktookplaceinRegionIVA.About65percentofthetotaldamagestofisheryassets(Php26million)werepostedinRegionIV-A,followedbyRegionIII(23percent).

Table 3: Damage in Agriculture Sector, by Region and by Sector (in Php million)10

Region IrrigationDamage to livestock

Damage to forestry

Damage to fishery

Total 11

CAR 420 - 352 1 773

I 963 - 14 - 977

II 566 - 3 212 572

III 935 - - 6 941

IV-A 259 1 - 17 277

IV-B 64 - - - 64

V 162 - - - 162

Total13 3,368 1 369 26 3,766

Fortheforestrysub-sectordamageswerecategorizedinto(a)forestland;(b)DepartmentofEnvironmentandNaturalResources(DENR)Projects;14(c)timbercrops;(d)agro-forestrycropsincludingfruittrees;e)mangrove;(f)buildingand(g)equipment/furniture.TheestimatedtotaldamageisaboutPhp369million,ofwhich,Php254million(or69percent)isduetothedamage

10 Totalsmaynotexactlyaddupduetorounding.11 Forotherinfrastructuredamages,seesectionofPDNAreportoninfrastructure.Infrastructuredamagesonpost-harvest

facilitiesarenotincluded.12 DA-FAOjointassessmentteamestimate.13 IncludesbothNISandCISdamagesandlevel1(Php1.4billion)andlevel2(Php2.3billion)damages.14 Referstoprojectassetsdamaged.


toforestland,Php80million(or22percent)isfrominfrastructure,Php13million(3.5percent)isfromtimbercrops,andPhp9.9million(or2.7percent)fromDENRProjects.Takentogetherthesefourcategoriesaccountforabout97percentofthetotalestimateddamagesinthesub-sector.Theremainingfourcategories,namely,agro-forestry,buildings,equipment,andmangroveaccountedforaboutPhp12millionor3percentofthedamages.

TotalimmediatelossesamountedtoaboutPhp24.8billionThis,however,couldrisetobetweenPhp30billiontoPhp47.5billionwhenlikelyfuturelossesareincluded.Ifweassumethatrepairofirrigationfacilitiesthatincurredlevel2damagesiscompletedbytheendofthisdryseason,theprojectedadditionallossisPhp5.3billion,foratotallossofPhp30billion(Table4).Iflevel2damagesremainunrepairedwithinthenexttwocroppingseasons,theadditionalprojectedlossisPhp6.1billion,foratotallossofPhp36.1billion.TheadditionalprojectedlossrisestoPhp11.4billioniflevel2irrigationdamagesremainunrepairedwithinthenextthreecroppingseasons.TotallosswouldincreasetoPhp47.5billionunderthisscenario.Thisunderscorestheneedtoimmediatelyrepairtheseirrigationsystemstopreventasignificantescalationoflosses,particularlyinriceproduction.

Table 4: Projected Losses from Level 2 Damaged Areas,by Region (in Php million)

Region Scenario 115 Scenario 216 Scenario 317

CAR 203 250 454

I 258 341 598

II 3,369 3,841 7,209

III 1,261 1,418 2,678

IV-A 96 102 197

IV-B 34 35 69

V 74 86 159

Total 5,295 6,073 11,364

Bysub-sector,about95percentofallimmediatelossesarefromcrops(Table5).Thiswasfollowedbyfisheries(4.9percent),livestock/poultry(0.3percent)andbyforestry(0.2percent).

Table 5: Total Losses in Agriculture Sector, by Sub-Sector (in Php million)

SubsectorLosses

Standing Crop Loss




Crop 23,454 28,747 34,819 46,184Livestock/Poultry 71 71 71 71Fisheries 1,205 1,205 1,205 1,205Forestry 58 58 58 58

Total 24,788 30,081 36,153 47,518

15 Lossesonlyaccrueduringdryseasonandallstructuresarerepairedbeforestartofthewetseason.16 LossesaccrueduringdryandwetseasoninCY2010.Thisscenariowasusedfortheestimationoftotallossesreportedin

thePDNAMainReport.17 LossesaccrueasduringdryandwetseasoninCY2010andanotherdryseason.


Crops

Bycrop,riceaccountedforPhp20.4billionorabout87.1percentoftotalimmediatelosses(Table6).HighValueCommercialCrops(HVCCs)followedatPhp2.03billionworthoflosses(8.7percent)andcornwithPhp998million(4.3percent).

Table 6: Crop Losses, by Region and by Commodity (in Php million)

RegionLosses

Total Rice18 Corn HVCC

CAR 1,075 487 717 2,279

I 7,051 18 951 8,020

II 2,751 438 135 3,324

III 8,135 20 136 8,291

IV-A 781 26 54 861

IV-B 122 8 9 139

V 505 0.876 33 539

Total20,421

(87.1%)998

(4.3%)2,035

(8.7%)23,453(100%)

Table7showsthatricelosseswerelargestinRegionsIII,IandII.RegionIIIlostPhp8.1billion (39.8percent)worthofrice,followedbyRegionI(Php7.1billionor34.5percent),andRegionII(Php2.8billionor13.5percent).CornlossesinCARandRegionIIsufferedthegreatestlossincornproduction,wherealmost93percent(Php925million)ofthetotallossincornwasrecorded.(Table8)

Table 7: Rice Production Loss, by Region (in Php million)

RegionRice

Area Affected (ha) Volume (MT) Value

CAR 44,888 68,692 1,075

I 133,537 432,236 7,051

II 112,783 171,402 2,751

III 218,644 481,031 8,135

IV-A 17,047 52,238 781

IV-B 16,157 7,221 122

V 37,872 34,484 505

Total 580,928 1,247,304 20,421

18 Alllossestimatesforriceusemarketprices.AboutPhp1billionwillbeaddedtotheestimatesifNFApaddysupportpricesareused.


Table 8: Corn Production Loss, by Region (in Php million)

Region

Corn

Area Affected (ha)

Volume (MT) Value

CAR 11,495 37,376 487I 1,186 563 18II 20,668 31,405 438III 607 1,361 20IV-A 1,046 1,732 26IV-B 484 521 8V 181 0.876Total 35,667 72,958 998

Table9showsthatHVCCproductionlosswasgreatestinRegionIwherePhp951millionor46.7percentoftotallossinHVCCwererecorded.CARfollowswithPhp717million(35.2percent).RegionsIIandIIIsufferedalmostequallossesinHVCCproduction,althoughtheareaaffectedandvolumelostinRegionIIIissignificantlylarger.

Table 9: HVCC Production Losses, by Region

RegionHVCC

Area Affected (ha)

Volume (MT)

Value (in Php million)

CAR 26,472 69,074 717I 6,299 44,638 951II 403 1,070 135III 1,335 13,260 136IV-A 536 5,357 54IV-B 101 886 9V 1195 832 33Total 36,341 135,116 2,035

Livestock and Poultry

Forlivestockandpoultry,thebiggestlosswasincurredinRegionIV-AamountingtoPhp43millionfollowedbyCAR(Php16million),andRegionI(Php7million)(Table10).

Table 10: Summary of Losses in the Livestock Sub-Sector (in Php million)19

Region Total Loss Percent ShareCAR 16 22.6I 7 10.3II 19 4 5.5III 1 1.6IV-A 43 60.1IV-B - -V - -Total 71 100.0

19 DA-FAOjointassessmentteamestimate.


Fisheries Sub-Sector

TotallossesinfisheriesamounttoPhp1.2billion(Table11).RegionIincurredPhp582millionlossinfisheries,whileRegionIIIlostPhp533million.Together,fisherylossesinthesetworegionscomprise93percentofthetotalloss.RegionIV-AfollowswithPhp48millionor4.1percentoftotallossesinfisheryandCARwithPhp9.0million(0.8percent).

Table 11: Summary of Losses in the Fisheries Sub-Sector, by Region (in Php million)

REGION Total Losses Percent share

CAR 9 0.7

I 582 48.3

II20 33 2.7

III 533 44.3

IV-A 48 4.0

IV-B - -

V - -

Total 1,205 100.0

Forestry Sub-Sector

Lossesinforestryareexpressedasthevalueofproductionofgoodsandserviceslost.ForthepurposeofthisassessmentandgiventhestateofassessmentdataavailablefromDENRoffices,lossesarecategorizedinto:a)agro-forestrycrops;b)timbercrops;andc)CO2sequestrationcapacity.ThetotalestimatedlossesfromallthreeregionsareaboutPhp58million,ofwhichPhp2.2millionor3.9percentisfromRegionI,Php10.3millionfromRegionII(18percent)andPhp45.0million (78percent)fromCAR(Table12).ThebulkofthelossesarefromtreecropsamountingtoPhp34.6millionor59percent,followedbyCO2sequestrationcapacityatPhp20.3million(35percent)andagro-forestrycropsatPhp3.5million(6percent).

Table 12: Distribution of Estimated Losses in the Forestry Sub-Sector, by Region/Province

Region

Losses

Agroforestry Crops

(in Php million)

Tree Crops

CO2 Sequestration Capacity

(in Php million)

Total (in Php million) Percent

I 0 1.0 2.1 2.2 3.9

II 2.9 6.3 1.0 10.3 17.9

CAR 0.5 27.3 17.2 45.0 78.2

Total 3.4 34.6 20.3 57.5 100.0

Agribusiness Losses

Lossestoagro-industryoccurredasaresultoflossesininputsintofoodprocessing.Asawhole,theestimatedlossesfortheagro-industrylossesamountedtoPhp4.8billion.Theselossesreflectthosesufferedintermsofstandingcrops.Intermsofrice,millersrepresentthemainsegmentoftheaffectedagro-industry,withlossesofaroundPhp4.6billion(95.4percentofthetotal).Withregard

20 DA-FAOjointassessmentteamestimate.


tocorn,derivedlossesamounttoPhP55million(1.1percent),mostlyreflectingthehighpercentageofself-consumptionofthiscrop.LossestohighvaluecropsgaverisetoPhp50.2millionlossestoprocessors(1.1percentofthetotal),whileforprocessorsoflivestockproductsthelossesamountedtoPhp1.4million(0.02percentofthetotal).Finally,lossesinthefisherysub-sectorgaverisetoderivedlossesofPhp115.2million(2.4percentofthetotal).

Priority Recovery and Reconstruction Needs

Giventherelativemagnitudeofthedamageandlosses,therecoveryandreconstructionforthesectorshouldprioritizethericefarmingareas.Topreventfurtherlosses,ricefarmersshouldbeabletoplantbyDecember2009atthelatestsothatthedryseasoncroppingisnottotallylostintheaffectedareas.Thisassumesthatthelevel1damageinboththeNISandCISwillbeaddressedalsobytheendof2009atthelatest.

Fortherecoveryprogram,itwouldonlybethecashrequirementestimates(derivedfromtheBureauofAgricultureStatisticscostandreturnsdata)thatwouldberelevantsincethenon-cashcomponentsshouldalreadybethecounterpartofthefarmer-beneficiaries(e.g,familylabor,laborpaidinkind).Forrice,thefinancingrequirementneededbyfarmerstoenablethemtofullyoperateduringthedryseasontotalsPhp8.7billion (Table13).Thebulkofthesefundswillbeusedtopurchasehiredlabor(38.4percent)andfertilizers(47.5percent).About6.9percentwillbeforfoodexpensesduringfarmingoperationsand5percentforseeds.AroundPhp143million(2.1percent)oftherecoveryfundsforricefarmerswillpayfortheinterestoftheircurrentloans,whichwillenablethemtokeeptheircreditlinesopenforthecomingwetseason.

Table 13: Recovery Costs in Agriculture Sector, by Component and by Commodity (in Php million)

Rice Corn HVCC TotalSeeds 337 68 13 418Fertilizer 3,178 269 3 3,450Hired labor 2,571 132 323 3,026

Interest paymenton crop loan

142 8 - 150

Foodexpense 461 20 61 541

Other cash expenses16

1,990 66 2,252 4,310

Total Cash Costs 8,679 563 2,652 11,894

Source:BureauofAgriculturalStatistics,CostandReturnsSurvey,2008.

Toreconstructirrigationsystems,theNationalIrrigationAdministration(NIA)planstocompletetherehabilitationworksintwophases.PhaseonewillcoverLevel1orshorttermrehabilitationneeds(costingaroundPhp1.4billion)whichwillentailimmediateremedialmeasurestosavestandingcrops.Somepreparatoryworkmaybeneeded.Thiscouldincludetherepairofcutorscouredembankmentstoallowirrigationwaterdeliveryanddistributionaswellasaccessforde-siltingandothercivilworkconstructionevenduringthewetrainyseason.Meanwhilephasetwo,whichcoversLevelIIormid-termrehabilitation(costingaroundPhp2.4billion,whichincludes20percentoverthedamageestimateforstructuralimprovements),willentailrestorationworks.PhasetwowillbetakenupafterdetailedsurveysanddesignsarecompletedsometimeinMay2010.

Forcornfarmers,therecoveryprogramisestimatedtocostatotalofPhp563million.Thebulkofthemoneywillgotofertilizers(47.7percent)andhiredlabor(23.5percent).Operationalfoodexpensesandinterestpaymentsareestimatedtorequire3.5percentand1.4percentofthefunds,respectively.


Meanwhile,therecoveryprogramofHVCCfarmerswillrequirePhp2.7billion.Hiredlaborwillneed12.16percentofthecashandfoodexpenseswillneedaround2.2percentofthesupport.Seedsrequire5.1percentoftherecoverymoneytoHVCCwhilefertilizersneed1.2percentoftotalHVCCsupport.

Publicfundswillbeusedfortherecoveryandreconstructionprogramsforriceandcorn.Notonlyarericeandcornfarmersamongthesmallestandmostvulnerableinthecountry,buttheiroutputisessentialtofoodsecurity.Ontheotherhand,itisestimatedthatonlyhalfofHVCCfarmerscanbeconsideredtobesmallandvulnerablefarmersand,thus,eligibleforpublicfundsupport,whichshouldamounttoaboutPhp1.3billion.

Thereisstillaneedforafirmestimateoftherecoveryfinancingrequirementforfisheries.Aroughestimateisthataboutone-thirdoftotallossesoraboutPhp400millioncouldcovertherecoveryneedsofthesub-sector,specificallyforprovisionoffingerlingsandfeeds.However,itwasalsoestimatedthatonlyabouthalfoftheaffectedfisherfolksaresmall-scalefishersand,thus,possiblyeligibleforpublicsupport.Thetotalpublicfundingrequirementforthesub-sectoris,therefore,estimatedtoamounttoaboutPhp200million.

Meanwhile,therecoverycostrequirementsforforestryandlivestock/poultryhaveyettobeestimated.Thesesub-sectorshavemoreneedofreconstructionthanrecoveryassistance.Itshouldbenotedthatthelossesinlivestock/poultryareconcentratedinRegionIV-A.Thisregionwill,therefore,bethefocusoftherecoveryprogramforthesub-sector.

Basedonanalysisofdamagesreportedfromthethreeregions,theneedsforeachprovinceintheforestrysub-sectorwereidentifiedandthesummaryforeachregionisshowninTable14.ThetotalneedforthethreeregionsisestimatedatPhp770million,ofwhichPhp753million(98percent)isforCARalone,TheremainingtwopercentissharedbetweenRegionIwithlessthantwopercentandRegionIIwithlessthanhalfapercent.TheneedsofRegionsIandIIarethesameasthetotalcostofdamageincurred.TheneedsinCARarethesumofthecostofdamageplusaninvestmentdesignedtomaketheentireregionbetterpreparedforfuturedisasters.ThisadditionalneedwashighlightedbyagroupofkeyDENR-CARofficersduringtheirworkshopon30October2009inBaguioCityandisestimatedtocostsomePhp400million.Itshouldbenoted,however,thatpartoftheneedsestimateforthesub-sectorincludedaboutPhp390millionforhazardmapsandCLUPs,whicharealsoidentifiedneedsofothersectors.Thus,onlyaboutPhp380millionareneededforpurelysub-sectorneeds.Publicfundswillbethemajorsourceoffinancing.

Table 14: Needs of the Forestry Sector, by Region (in Php million)

Region Cost

CAR 753

I 14

II 3

Total 770

Theserecoverycostestimatesdonotyetincludetheattendantadministrativeandlogisticalcosts.Thefinaltotalfinancingrequirementwilldependonthemodalitythroughwhichrecoveryassistancewillbedelivered.Forexample,government’sdirectprovisionofinputstoaffectedfarmerswouldentailmorecostscomparedtoavoucherscheme,whereaffectedfarmerswouldaccesstheirpreferredinputsfromaccreditedsuppliersordirectcashtransfers.


Becauseofcapacityconstraints,itmaynotbepossibletoattendallneedssimultaneously;thus,prioritizationmaybenecessary.Thefollowingprioritizationcriteriaarerecommended:a)thetotalnumberoffarmersorhectaresaffectedinagivenarea,andb)theintensityofthelossessufferedasaresultofthecalamities.AsshowninTable6,theintensityoflossesdiffersamongregionsandamongcommodities.

Inaddition,thereisaneedtodeterminethenumberoffarmerswhosefarmlandsarestillinundated.Forthem,alternativelivelihoodsupportratherthanfarmingassistancewouldbemorerelevant.Thesecouldcomeintheformofcashtransfersoveralimitedperiodoftimeinordertostartanewlivelihoodactivity,food-for-workprograms(e.g.,repairsofdamagedfarm-to-marketroads,de-silting/clearingofirrigationpassages,etc.),trainingandcapitalforalternativelivelihood,amongothers. 21

AfinalnoteconcernsthericeimportationrequiredtocompensatethelossesinproductionsufferedasaresultofOndoyandPepeng.Atthemomentthedataarenotsufficienttoestimate,withsomedegreeofconfidence,thetotalshortfallintheproductionofriceatthenationallevel.Thelossesinmetrictonsofricefortheareasaffectedbythetwotyphoonsareavailable(seeabove).Toestimatethetotalincreaseinimportationneeds,however,requiresdetermininghowthesupplyofricewilladjustintherestofthecountryasaresultofpricesandotherproductionincentives.Projectionsforproductionaredonethroughobservationofthestandingcrop,andpresently,thedryseasoncropisjuststartingtobeplanted.AtthemomenttheGOPhasestimatedtheshortfallinproductionas1millionmetrictonsofrice.ProcurementofricetofilltheestimatedshortfallinproductionhasalreadybeeninitiatedbytheNationalFoodAuthority.

Implementation Arrangements

ActivitiestoensureapromptrecoveryoffarmingactivitieswillneedtobecarriedoutbynolaterthantheendofDecember2009.Thiswillensurethatlandpreparationandplantingcanstillcatchupwiththestartofthedryseason,foraffectedfarmerstoharvestbyMay2010atthelatest.TheDAis,therefore,currentlydistributingfertilizersandseedssufficientfor1hectareforeachbeneficiarybuttofarmerswithtotallydamagedricefarmsonly.Notallaffectedfarmersarebeingassisted.Moreover,givenbudgetconstraints(Php750millionallocatedforfertilizers),itisnotcertainthatevenallricefarmerswithtotallydamagedfarmswillbeassisted.Giventhedisruptioninthecreditmarketbecauseoftheinabilityofmanyaffectedfarmerstoservicetheirproductionloans,thereisalsouncertaintyabouttheextenttowhichthefertilizersandseedsprovidedbygovernmentcanbeutilizedbythebeneficiariesduetolackofoperatingcapital.Toensureaswiftrecoveryoffarmingactivities,itisunlikelythatprovisionofseedsandfertilizerswillbesufficient.Othercomplementaryinputswillberequiredforfarmerstoensurethatplanting,transferofseedlings,andmanagementofcropsarecarriedoutproperly.Therewillbetheneedtohirelabor,rentmachinery,advanceleasepayments,andfinancesubsistenceduringthecroppingseason.Inaddition,toavoidacompletedisruptionofthelocalcreditmarket,itwillbenecessarytoensurethatfarmersdonotcompletelydefaultonloanscontractedduringthepreviouscroppingseason.Forthispurpose,paymentofinterestonoutstandingloanswillbenecessarywhilewaitingforarepaymentoftheprincipalatharvesttime.Thus,afullrecoverywillrequiredevelopingaprogramthatismorethanjustthedeliveryofprimaryinputssuchasfertilizersandseeds.Moreover,theNationalIrrigationAdministrationandtheLGUsshouldimmediatelylaunchtherepairoflevels1and2damagedirrigationsystemsassoonaspossibleasnottolosetheentiredryseasoncroppingintheaffectedareas.

Therearethreemainwaysthroughwhichrecoverysupportcanbetransferred:(a)transfersinkindofkeyproductioninputs,suchasseedsandfertilizers,(b)distributionofvouchersthroughwhich

21 SeethePDNAreportonsocialprotectionwhereacashtransferprogramforthemostaffectedhouseholdsisproposed,whichcouldfarmerswhosefieldsarestillinundated.


beneficiarieswouldbeabletopurchasecommercialinputsatauthorizedstores,and(c)distributionofcashthatthebeneficiarycoulduseintheinterestofhisorherownfamilyactivities,includingfarming.Eachformofdistributionentailsdifferentadministrativecosts.Ensuringsimplicity,speedofdelivery,aswellasensuringamoretransparentandcost-efficientmechanismofthetransferarrangementsshoulddeterminethechoiceofdistributionmechanism.

Inmostprogramsfordistributingin-kindinputssuchasseedsandfertilizers,itisestimatedthattheadministrativecosts(managingtheprocurement,transportation,storage,anddistribution)amounttoabout20percentofthecostoftheinputsprocured.Thus,thecurrentrecoveryeffortmaynotonlybeinsufficientbutmayalsobemoreexpensive.Inaddition,supportforothertypesofinputsandforsubsistenceconsumptionwouldinanycaserequiredistributionofvouchersorcash.Thus,itmightbeeasiertodistributethroughasinglevoucherorcash,basedonaper-hectareestimate,theestimatedrecoveryneed,exceptforhiredlaborandsubsistenceneeds,whichshouldbesupportedthroughdirectedcashtransfers.

Themainadvantagesofvouchersandcashoverdistributionofin-kindsupportare;(i)avoidingexcessiveadministrationcosts;(ii)flexibilitytothefarmer/fisherfolktoprocureinputsbasedontheirspecificproductionrequirements;(iii)ensuringthatthefarmer/fisherfolkreceiveinputsofappropriatequalityandquantity.Inaddition,suchasystemwouldpromotetransparencyandwouldaddressissuesofgovernanceassociatedwithpastinputsubsidyprograms.

Transfersincash,vouchers,orin-kindwouldallrequireasubstantialcommitmentbyLGUsinordertobecarriedoutsuccessfully.TheDA,incollaborationwithLGUs,hasalreadyhadexperienceinthedistributionofseedsandfertilizersbothin-kindandthroughvouchers.Unconditionalcashtransferstoaffectedfarmersbasedonfarmsizehavenotbeenattemptedbefore.Nevertheless,astheDAiscompletingtheregistrationofaffectedfarmersandgiventhatthiswouldbeaninterventionforfarmerslimitedtodisaster-affectedareas,itsimplementationcouldberatherswiftbuildingonthecurrentdatabeingusedforthegovernment’sinputdistributionprogram,providedthatthegovernmentdecidesonsuchamodalityassoonaspossible,sothatthemechanicsfortheprogramwouldbeagreedbetweenandamongthegovernment(centralandlocal),theconcernedfinancialinstitutions,theprivatesectorandcivilsocietygroupsforappropriatemonitoring.

Intermsoffinancingtherecoveryandreconstructionprogram,thiscanbedonethrough:(1)useofexistingresourcesforon-goingprograms;and(2)mobilizationofnewmoneythroughgrantsfortechnicalassistanceandloansforrecoveryandreconstructionefforts.

Ontheuseofexistingresources,Governmenthastheflexibilitytoredirectresourcesofongoingprojectstorestoredamagedinfrastructure.Anexamplewouldbetherehabilitationandreconstructionofdamagedirrigationfacilitiesbeingfundedunderongoingprojects.Onadditionalresourcesforreconstruction,Government’sownresources,aswellasgrantsandloansfrombilateralandmultilateralfinancialinstitutionswouldneedtobeimmediatelymobilized.Forexample,aboutPhp3.8billionisneededtoimmediatelycommencereconstructionofaffectedsystemsinordertoavertfurtheragriculturallossesinirrigatedricefarms.Assuch,aboutUS$70millionwouldneedtobemobilizedoutofthecalamityfundoroverseasdevelopmentassistancetocommencereconstructioneffortsforirrigationfacilitiesassoonaspossible.Inaddition,inagrarianreformcommunities,aboutPhp1.4billion(US$30million)wouldneedtobemobilizedtocommencethereconstructionofdamagedinfrastructuresuchasfarm-to-marketroads,bridges,communalirrigationfacilities,postharvestfacilitiesaswellasrestorationofaffectedlivelihoodactivities.InthetownsaroundLagunaLake,whereanumberoffarmsareinundatedandasaresultanumberoflocalinfrastructureandlivelihoodactivitieswereaffected,aboutPhp0.5billion(US$10million)areneeded.


Inthefinancingoftheseurgentreconstructionneeds,itmustbetakenintoconsiderationthatthemajorityoftheseinfrastructurearedevolvedtolocalgovernmentunits(suchascommunalirrigationfacilities,farm-to-marketroads,localfloodcontrol,riverbankprotection,wastewatertreatments,)and,hence,inthereconstructionefforttheGovernmentmayhavetoconsiderwaivingtheusualNG-LGUcostsharingguidelines,inordertoensureimmediatereconstructionofthedamagedinfrastructure.Also,sinceanumberoflivelihoodactivitieshavebeenaffectedanddisplaced,theGovernmentmaywishtoconsiderestablishinganewmechanismforcashtransfers,especiallyforfarmersandfisherswithinundatedfarmsanddisplacedlivelihoods.Suchacashtransferschemecouldbeputinplacefor3to4monthstoallowseverelyaffectedhouseholdswithrestoringtheirformerlivelihoodactivities.SuchaschemecouldbeimplementedbytheDepartmentofSocialWelfareandDevelopment(DSWD),incollaborationwiththeDeptofAgricultureandconcernedLGUswhowillassistintheidentificationoftheaffectedfarmandfishinghouseholds.PleaserefertothesectiononsocialprotectioninthePDNAMainReportformoredetailsonthisproposedcashtransferscheme.

Ensuring Sustainability of Recovery and Reconstruction Efforts

Itiswellrecognizedthatadverseclimaticeventshavepermanenteffectsonaffectedhouseholdsandfarms,theextentofwhichdependsonthespeedandmagnitudeofthereliefefforts.TheareasaffectedbyOndoyandPepengarevulnerabletosuchtypeofclimaticevents.Itisextremelyimportantforthecurrentreliefeffortstobesuccessfulinhelpingaffectedfarmstorecoverinthelong-runthatfurtherclimaticeventsthatmayhitthesameareasbedealtwithasefficientlyandswiftlyaspossible.Thecurrenteventclearlyshowsthattheinstitutionalresponsecapacitycanbesubstantiallyimprovedupon.Whilethemodalityofdistributionofreliefandrecoverysupporttofarmersandfisherfolkundertheactualcircumstancesisconstrainedbythecurrentsetupintheshortterm,inthemediumterm,substantialimprovementscanbeundertaken.

Inviewoftheabove,tosupportpromptrecoveryfromfutureclimaticshocks,thebestapproachisthe establishment, before the occurrence of the event,ofafarmregistryandinventoryofagriculturalinvestmentsthatwouldbesupportedbyaremotesensingsystem.Afarmregistrywouldallowidentifyingwhichfarms,andtheirsizeinhectares,areincludedinanaffectedarea,thelatterinturnidentifiedthrougharemotesatellite-basedsystem.Theinventoryofinvestmentswouldalsoallowtotrackthelocation,typeandvalueofinfrastructureintheaffectedarea.Linkingfarmerstobankaccountsthroughtheregistryofferstheopportunityofdistributingimmediatereliefthroughcash(theleastexpensivemodality)orvouchers(aslightlymoreexpensiveandsomewhatslowermodalitycomparedtocashtransfers).Ifin-kindtransfersareretainedasthepreferredoption(mostexpensiveandslowestmodality),theregistrywouldallowatleasttostrengthenthemonitoringsystem,minimizeleakages,andsimplifythelogisticcomplicationsofdeliveringlargeamountsoffertilizersandseedstoaffectedfarms.TheestimatedcostofestablishingsucharegistryintheareasofLuzonaffectedbyOndoyandPepengcanbeestimatedintheorderofPhp600million.22

22 ThefeasibilityandcostsofestablishingafarmregistryandinventoryofagriculturalinvestmentshasbeenanalyzedaspartofastudyprovidedtotheDepartmentofAgriculture.Theanalysispositivelyconcludesthatthenecessarypre-conditionsfortheestablishmentofaregistryinthePhilippinesaresatisfiedandthatitspotentialcoveragewouldbeextremelyhigh(about70percent-80percentofexistingfarms).


Recovery Framework: Agriculture, Fisheries, and Forestry Sector

Outcomes Baseline Priority Activities to December 2009

Priority Activities toDecember 2009-onwards

Crop sub-sectors Farmers recover their pre-damage production activity.

Main losses consistedofpartialor complete lossofstandingcrops(rice,corn,vegetables and fruits).Main damages consistofsiltingofirrigationcanals(level1damages),and damages to irrigation infrastructure(level2).

Priorityactivitiesforrecoveryandreconstruction:Transfertoaffectedfarmersresources required to cultivate affectedareas,(includinginputssuchasfertilizersandseedstransferredinkindorthroughvouchers;transferofcashequivalenttoestimatedcostofpurchasingadditionalcommercialinputs, hire machinery, hire labor, interest payments on previously existingproductionloans,andsubsistencerequirements).Preliminaryactivitieswouldincluderegistrationofaffectedfarmers,includingaffectedhectares.IdentifyEmergencyandalternativelivelihoodprogramsforfarmerswithinundatedfarmsDe-silt obstructed canals to reactivateproperwaterflow.Main capacity development activitieswouldconcerntrainingofrelevantLGUstafftoassistinthedistributionofvouchers,cashorin-kind production inputs, such as fertilizersandseeds.Totalcashrecoverycost:Php 12 billionofwhichPhp3,450.1millionareforfertilizers,Php418.4millionforseedsandPhp3,025.9millionforhiredlabor.Level 1 damages to irrigation systemsthatcanberepairedwithinashorttimeframe:Php 1.4 bn.Indicatorsofsuccess:Repairofdamagestoirrigationcanals:Kmsofcanalsde-silted,toensureflowofirrigationwatertoaffectedfarms.Hectaresofaffectedlandscultivatedandharvestedduringthe2010dryseasoncropperiod.

Priorityactivitiesforrecoveryandreconstruction:Restoredamagestoaffectedirrigation structures by reconstructing to standards thatwouldwithstandsimilartypeofclimaticdisasters.Equallyimportantwouldbetheincorporationoftechnicaldesign improvements to damagedirrigationfacilitiestoensureconsiderationsforclimatechangeadaptation.Preparatoryactivitiesforlong-term reconstruction and developmentactivitieswouldinclude:(i)identificationofirrigationinfrastructuresthatwouldberesistanttoclimaticeventsofsimilarmagnitudeofOndoyandPepeng;and(ii)preparationofprojectdesign,feasibilitystudiesandprogramofworks.Level-2 damages to irrigation systems that can be repaired inthemediumterm:Php 2.4 billion. Indicatorofsuccessinthereconstructionofheavilydamagedirrigationsystems:Irrigationinfrastructurewouldberehabilitatedandreconstructedwithimprovedcriteria(Kmsofcanalsandnumberofstructuresreconstructed)



Priority Activities toDecember 2009-onwards

Livestock sub-sector:Stocksofvarious species are re-established.

Main damages consistedofdisappearance or deathofcows,pigs,goats, and poultry

Priorityactivitiesforrecoveryandreconstruction:RecoveryefforttofocusonRegionIV-AIdentificationofmostvulnerablelivestock/poultryfarmersrequiredforpropertargetingfrompublicsectorFinalizationofrecoveryneedsassessment among vulnerable farmersPreparationofvoucherprogramdependingonrequiredscaleofinterventionforrecovery

Priorityactivitiesforprivatesectorrecovery/reconstruction:Reconstitutionofbackyardlivestock through animal dispersal programLivelihood programs to support heavilyaffectedfarmersamongthe most vulnerableDeliveryofvouchersifjustifiedbyscaleofinterventionforrecoveryTotal reconstruction needs: Php 1 million.Total recovery needs, still need to be estimated

Forestry sub-sector

Priorityactivitiesforreconstruction:MainfocuswillbeonCARSub-projectswillfocusonreforestation,agro-forestry,replacementofseedlings,andinfrastructurerequiredforstrengthening sector against futureclimaticeventsTotal reconstruction needs: Php 380 million

Fisheries sub-sector

Main losses consistedofpartialor complete loss offishstocksinfishponds,fishpens,fish-cages(aquaculture).Main damages consistedofpartialor complete destructionofaquaculture structures (fishponds,fish-pensandfish-cages)fishingparaphernalia (boats,fishcorral,gillnet).

Priorityactivitiesforprivatesectorrecovery/reconstructionIdentifymostvulnerablelivestock/poultryfarmersrequiredforpropertargetingfrompublicsectorPrepare vouchers to be distributed toaffectedfishfarmersforthepurchaseoffeedsandfingerlings

Priorityactivitiesforprivatesectorrecovery/reconstruction:ProvisionoffeedsandfingerlingsAquaculture structures rehabilitated and reconstructed Provisionofboats,gillnets,fishinggearstomarginalfisherfolkstofishinmunicipal/openwaterwherethereisnetgaininfisherystocksTotalrecoveryneeds:Php 200 million for support to vulnerable fisher-folksTotalreconstructionneeds:Php 36 million


Enterprise Sector

Summary23

Theback-to-backdevastationoftyphoonsOndoyandPepengexactedatotalofPhp111.4billionworthofdamageandproductionlossesintheenterprisesectoracrossthesixregionsoftheNationalCapitalRegion(NCR),CAR,RegionI,RegionII,RegionIIIandRegionIV-A.ThebulkofthelossescomprisedforegonerevenuesvaluedatPhp88.9billion(80percentoftotaldamageandlosses)asaresultofproductioninterruptionsandinventorylosses.InventorylosseswithanestimatedvalueofPhp78.7billionaccountedforasubstantialportionoftheforegonerevenues,asestablishmentshadpreparedfortheanticipatedincreaseindemandforthecomingholidays.TheremainingPhp22.4billion(20percent)representeddamagestobusinesspremises,includingbuildings,warehouses,machineryandequipment(seeFigure1).

Figure 1. Philippines: Total Damage and Losses from Typhoons Ondoy and Pepeng for the Enterprise Sector

Wholesaleandretailtradewasthemostaffectedsubsector,withdamagesandlossesamountingtoPhp89.3billion.ThiswaslargelyonaccountofPhp77.3billionworthofinventoryandproductionlosses.TheremainingPhp12billionconsistsofdamagetopremisesandequipment/machines.ThemanufacturingsectorsustainedPhp9.8billionworthofdamagetofactorysitesandmachinery,whichseriouslyimpactedthesector’sabilitytodeliverorders;thesewereparticularlyhighaheadoftheimportantChristmasseason.DamagetorawmaterialsandinventorystocksreducedfuturerevenuesbyafurtherPhp9.1billion.Tourismwasmoremildlyaffected,withtotaldamagesandlossesestimatedatPhp3.1billion.Disruptionofthetransportsectorcouldhavegeneratedlargerevenuelossesinthetourismsector,butthiswasoffsetbyasurgeindemandforhotelandrestaurantservicesbyfamiliesaffectedbytheflooding.

23 Theenterprisesectorcomprisesmanufacturing,wholesaleandretailtrade,andtourism.ThisreportbenefitsfromarapidassessmentofdamageandlossesfromtyphoonsOndoyandPepengconductedforthePDNAbyPulseAsiaon23-30October2009.

9.8 12.0

22.4

9.1

77.3

88.9

19.0

89.3

111.4

0.62.5

3.1

0.0

30.0

60.0

90.0

120.0

Manufacturing Wholesale & RetailTrade

Tourism Total

Damage Losses Total Damage & Losses

P billion

Source:PDNAestimates.

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Tohelptheenterprisesectorintheseareasrecoverfromtheselosseswillrequireamixoffinancingmechanisms.Thesector’srecoverywouldalsobefacilitatedbyarapidrecoveryofothersectorsproducingcomplementarygoodsandservices(e.g.,transportoragriculture).Aprivatesectorrecoveryandmanagementframeworkisessentialtofosterpreparedness,timelyresponseandeffectivemanagementofanyfuturedisasters.

Background

ThesixregionsofNCR,CAR,RegionI,RegionII,RegionIIIandRegionIV-Adrivetheenterprisesectorofthecountry.About64percentofthetotalgrossvalueaddedoftheenterprisesectorwasproducedinthesesixregionsovertheperiod2002to2008.NCR,beingthemosteconomicallydenseregioninthecountry,produces41percentoftotalmanufacturingofthenationaleconomy,26percentoftotalwholesaleandretailtradeand57percentoftourism.RegionIV-AbenefitsfromitsproximitytoNCRandnowplaysaleadingindustrialandexport-processingroleinthecountry.RegionIIIisthegranaryofLuzon,withalargeconcentrationofindustrialcompaniesandmanufacturers,warehouses,transportationandlogisticsservicesattendingtoagrowingpopulation.Almosthalfofthecountry’stotalpopulationresidesinthesesixregions.24

Theenterprisesectorintheseaffectedsixregionsgrewstronglyforthepastfewyears,makingalargecontributiontoGDPgrowth.From2002to2008,theenterprisesectorintheseregionsgrewby4.5percentannually.Theycontributed3.2percentagepointstothecountry’stotalenterprisegrowth,whiletheremainingregionscontributedonly1.8percentagepoints.

Figure 2. Geographic Distribution of Gross Value Added (Manufacturing, Wholesale and Retail Trade and Tourism)

Source:NSCB

Damage and Losses

DamageandlosseswereestimatedforenterprisesbasedonanenterprisesurveyespeciallycommissionedforthePDNA25.Thesurvey,undertakenforPDNAselsewherearoundtheglobe,allowedanassessmentofex ante and ex postproductiondecisionvariables.ThesedatawerethenextrapolatedfortheaffectedareasinLuzon(coveringNCR,CAR,RegionsI,II,IIIandIV-A)toestimate

24 AsofAugust1,2007(NSO).25 Thesurvey,undertakenon23-30October,isbasedonasampleofobservationsacrosssixmunicipalitiesandcitiesin

thedisaster-affectedareasofLuzon,e.g.Marikina,Pasig,Cainta,Dagupan,Sta.RosaandTuguegarao.Theobservationsconsistoffirms,engagedinmanufacturing,wholesaleandretailtrade,andhotelandrestaurants,ofvaryingassetsize.

0.3%

1.4%

0.3%

1.9%2.2%

2.9%0.8%

0.6%3.8%

9.8%

80.0%

60.0%

40.0%

20.0%

0%

40.5%

25.7%

7.8%

14.8%

6.5%

6.2%

56.9%

16.8%

%ofnationalGVA

Manufacturing Whole and Retail rade Tourism

NCR CAR Ilocos Cagayan Valley Central Luzon Calabarzon


thetotalvalueofdamageandlossesforeachregion(Map1).Aseparatetechniquewasusedforextrapolationformediumandlargefirmsandanotherformicroandsmall-sizedestablishments.26

Map 1: Damage and Losses in Enterprise Sector, by Region

Thesurveyprovidesindicationsofbaseline,damageandlossdata,includingrecoveryperiodandlikelysourcesoffinancingforrecovery.

26 Formediumandlargeenterprises,adjusteddatafromtheSecurityandExchangesCommissionisusedwhileforsmallandmicroenterprises,extrapolationisbasedonestimatesfromliteratureonthenumberoffirms.Regionalestimateswerecross-checkedwithregionalGDPdata,VATcollectiondataandinsuranceclaimdata.


Manufacturing Sector

Themanufacturingsectorsustained17percentoftotaldamageandlosses,mostlybymediumandlargecompaniesandineconomicallydenseregions. Some16,774establishmentsinthemanufacturingsectorexperienceddamageandlossesduetotheflooding.Theycomprised23percentofthetotalindustrialfirmsinthesixaffectedregions.AlmosthalfoftheaffectedfirmswereconcentratedintheMetroManilaandRegionIV-A,whichisaleadingindustrialandexport-processingzoneforsemi-conductors,pharmaceuticalproducts,automotivepartsandgarments.RegionIV-AandtheNCRarethetopregionsinthecountrywhichgeneratehighgrossvalueofmanufacturingoutputs.27 The manufacturingsectorinthesixaffectedregionssustainedPhp19billionworthofdamageandlosses.Whilethebruntofthefloodingwasfeltmostbythemediumandlargecompanies,small-scaleexport-orientatedmanufacturingfirmswerealsoaffected.Mediumandlargecompanies,about2,584ofthem,incurred93percentofthetotaldamageandlosses,whilesmallandmicroenterprisesshoulderedtheremainingsevenpercent.Therewere3,407affectedmicroandsmallenterprises(seeTable15).

Table 15: Damage and Losses in Manufacturing (in Php million)

Firms, by type Indicative Number of Affected Firms

Indicative Recovery Period (days)

Damage Losses

NCR

Micro 971 63.6 33.4 60.4

Small 307 150 76.8 168.7

Med/Large 964 60 8,925.0 6,220.2

Total 2,242 9,035.2 6,449.3

CAR

Micro 491 76.8 0.5 2.4

Small 155 19 0.8 4.3

Med/Large 24 75 10.8 3.1

Total 670 12.1 9.8

Region I

Micro 2,208 76.8 3.3 15.1

Small 698 19 5.0 26.6

Med/Large 49 75 22.4 6.4

Total 2,955 30.7 48.1

Region II

Micro 727 50.4 1.3 3.1

Small 230 19 1.6 2.1

Med/Large 22 75 9.8 4.3

Total 979 12.7 9.5

Region III

Micro 2,665 120 4.2 55.9

Small 842 120 9.3 168.9

Med/Large 484 75 220.5 578.7

Total 3,991 234.0 803.5

Region IV-A

Micro 3,721 120 10.6 139.9

Small 1,175 120 23.3 422.2

Med/Large 1,041 75 473.2 1,240.4

Total 5,937 507.1 1,802.5

Total

Micro 10,783 681/ 53.5 276.8

Small 3,407 671/ 116.8 792.8

Med/Large 2,584 671/ 9,661.7 8,053.2

Total 16,774 681/ 9,832.0 9,122.8

Source:PDNAestimates.1/Weightedaverageoftheobservationsinthesurveysample.

27 SeelatestAnnualSurveyofPhilippineBusinessandIndustry.


DamageinthemanufacturingsectorisestimatedtoreachPhp9.8billion.Thisamountincludestotallyorpartiallydestroyedbuildings,officesites,warehouses,equipmentandmachinery.Thedamagetophysicalpropertiesinterruptedproductionschedulesofbothdomesticandexportcommoditiesforseveralweeks.Onaverage,manufacturingfirmsintheaffectedareasexpecttoreturntotheirpre-disasteroutputlevels67-68daysafterOndoyandPepengstruckthecountry.Asidefromdamagetophysicalassets,manufacturingexperiencedPhp9.1billionrevenuelossesduetoslowdownsinproduction.Productiondelaysresultedinreducedinventoriesand,hence,lostordersfrombothglobalanddomesticbuyers.Manufacturingcompanieshadalreadysufferedearlierthisyearfromreduceddemandduetotheglobalrecession.Asidefromfloodinganddamagetophysicalassets,interruptionsinelectricitysupplyanddestroyedrawmaterialscontributedfurthertotheproductionlossesinmanufacturing.

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Wholesale and Retail Trade Sector

Thewholesaleandretailtradesubsectorsustained80percentoftotaldamageandlossesintheenterprisesector,largelyduetodamagedinventorybufferstocksfortheChristmasseason.JustascompanieswerebuildingtheirinventorybufferstockstomeetthehighdemandanticipatedfortheChristmasseason,OndoyandPepengswamped40,698establishmentsengagedinthewholesaleandretailtrade.Theseestablishmentsrepresent21percentofthetotalnumberoffirmsengagedinwholesaleandretailtradeintheaffectedregions.Asaresult,thesubsectorsustaineddamageandlossesvaluedatPhp89.3billion,largelyonaccountofinventorylossesestimatedatPhp74billionbymediumandlargecompanies.Adepletionofinventories,combinedwithaproductionslow-down,resultedinalossofsalesestimatedatPhp77.3billion.Damagetophysicalproperties,suchaspremises,goodsandserviceequipment,totaledPhp12billion(seeTable16).

Table 16: Damage and Losses in Wholesale and Retail Trade (in Php million)

Region Firms, by type Indicative Number of Affected Firms

Indicative Recovery Period (days)

Damage Losses

NCR Micro 2,017 94 69.4 125.5Small 1,043 113 261.2 573.5Med/Large 3,397 75 7,455.0 11,557.0Total 6,458 7,785.6 12,256.0

CAR Micro 1,020 105 1.1 5.0Small 527 82 2.8 14.8Med/Large 126 82 2.4 96.6Total 1,673 6.3 116.4

I Micro 4,586 105 6.9 31.3Small 2,372 82 16.9 90.5Med/Large 215 82 4.1 164.2Total 7,173 27.9 286.1

II Micro 1,511 52 2.8 6.4Small 781 120 5.3 7.3Med/Large 75 50 7.3 8.0Total 2,367 15.5 21.7

III Micro 5,535 67 8.8 116.1Small 2,862 91 31.7 573.9Med/Large 963 120 1,348.2 20,612.2Total 9,360 1,388.7 21,302.2

IV-A Micro 7,727 67 22.0 290.6Small 3,997 91 79.2 1,435.6Med/Large 1,942 120 2,716.0 41,580.0Total 13,666 2,817.2 43,306.2

Total Micro 22,396 811/ 111.0 575.0Small 11,583 1021/ 397.2 2,695.6Med/Large 6,719 731/ 11,533.1 74,018,0Total 40,698 861/ 12,041.3 77,288.6

Source:PDNAestimates.1/Weightedaverageoftheobservationsinthesurveysample.


Damageandlossesinthewholesaleandretailtradesubsectorweresignificantastheyimpactedeconomicallydensegeographicareas.Intermsofspatialdistribution,RegionIV-A,RegionIIIandtheNCR,accountedforalmostall(99.5percent)ofthetotalvalueofdamageandlossesandforthelargestnumber(72.4percent)ofwholesaleandretailestablishments.RegionIV-AandNCRregionsarerelativelyhighlyagglomeratedareaswithdensepopulationandeconomicactivities,wherewholesaleandretailtradingaboundstoprovideindustrialandmanufacturingfirmsan“extensionarm”intheproductionchain.RegionIII,ontheotherhand,isoneofthemaingranariesofthecountry.CAR,RegionIIandRegionIaccountedfor27.6percentofthetotalnumberofaffectedwholesaleandretailestablishments,butonly0.5percent(orPhp474.0million)ofthetotaldamageandlosses.Alargenumberofwholesaleandretailtradebusinessesrepresenthome-basedenterprises(orsmall‘fleamarket’-typeestablishments);theirdamageandlossesaremostlycapturedinthelossesreportedbytheagriculture,housingandlivelihoodsectors.

Smallandmicroestablishmentswerehithard. ExceptforCAR,allfiveregionshadhighconcentrations(above80percent)ofaffectedwholesaleandretailestablishmentsthatoperatedonsmallormicroscales.RegionIIandRegionIstoodout,as97percentoftheaffectedestablishmentsaresmallormicro.Theaveragenumbersofdaysforsmallandmicroestablishmentstoreturntotheirpre-disasterscaleofoperationsareestimatedtobe107and81days,respectively,whicharenoticeablyhigherthanthe73dayrecoveryperiodofmediumandlargecompanies.Smallandmicroestablishmentsinwholesaleandretailtradewerethereforeseverelyincapacitated.Whiletheyaccountforonly4.2percentoftotaldamageandlosses,theresumptionofnormaloperationswilltakelongerformostofthem.Mediumandlargecompanies,ontheotherhand,shouldered95.8percentoftotaldamageandlossesbutareestimatedtobeabletoreturntotheirnormaloperationsmorerapidly.

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Tourism Sector

TheimpactofOndoyandPepengonthetourismsubsectorwaslesssevereandaccountedforthreepercentofthetotaldamageandlossesoftheenterprisesector.Thedeclineinthenumberoftouristsandcommutersduetodelaysandcancellationofflights,seatravelanddisruptionsinroadtransportationcouldhavereducedtourismsectorrevenuessignificantly.However,thiswasoffsetbyasurgeindemandforhotelandrestaurantservicesbyfamiliesaffectedbythefloodingwhocouldaffordtostayinhotelsorresortsfortemporaryshelter.Nonetheless,theareasmostseriouslyaffectedbyfloodingexperiencedreducedpropertyvalues,whichcreateanegativewealtheffecttopropertyowners.ThetourismsubsectorlostPhp2.5billioninrevenuelosses.DamagetopremisesandequipmenttotaledPhp576.0million(seeTable17).Supply-sidefactorsreducedproductionoftourismservices. Inadditiontothefloodinganddamagetoequipment,disaster-inducedoperationalconstraints,suchasreducedlaborforceandelectricityshortages,exacerbatedtheproductionslowdownoftourismservices.

Table 17: Damage and Losses in Tourism (in Php million)

Region Firms, by type Indicative Number of

Affected Firms

Indicative Recovery

Period (days)

Damage Losses

NCR Micro 448 79 15.4 27.9Small 368 75 92.2 202.4Med/Large 573 55 400.9 964.6Total 1,390 - 508.5 1,194.9

CAR Micro 227 150 0.2 1.1Small 186 52 1.0 5.2Med/Large 35 75 n/a 53.5Total 448 - 1.2 59.8

I Micro 1,019 150 1.5 6.9Small 837 52 6.0 32.0Med/Large 42 75 n/a 63.9Total 1,898 - 7.5 102.8

II Micro 336 150 0.6 1.4Small 276 14 1.9 2.6Med/Large 9 75 0.4 0.3Total 621 2.9 4.3

III Micro 1,230 150 2.0 25.8Small 1,010 75 11.2 202.5Med/Large 194 64 3.9 150.1Total 2,434 17.1 378.4

IV-A Micro 1,717 150 4.9 64.5Small 1,411 75 28.0 506.7Med/Large 292 75 5.9 225.9Total 3,420 - 38.8 797.1

Total Micro 4,977 931/ 24.7 127.8Small 4,088 511/ 140.2 951.3Med/Large 1,145 631/ 411.1 1,458.2Total 10,211 691/ 576.0 2,537.3

Source:PDNAestimates.1/Weightedaverageoftheobservationinthesurveysample


NCR,whichhasthehighestconcentrationofaffectedhotelandrestaurantestablishments,washardesthit,accountingfor55percentofthetotaldamageandlossesinthetourismsubsector.RegionIV-AandRegionIIIaccountedfor27percentand13percentofthetotaldamageandlosses,respectively.Intermsofthesizeofenterprises,microenterprisesengagedinthetourismsubsectorwerebadlyhit. Smallandmicrotourismestablishmentsthatwereaffectedbythefloodingconstituted89percentoftotalnumberofestablishmentsbuttheirshareoftotaldamageandlosseswasonly40percent.Theaveragerecoveryperiodwashighestamongmicroestablishments,at91days.Smallhoteliersandrestaurateursestimatedneeding51daystoreturntothepre-disastersituation.Mediumandlargeestablishments,whichincurredtheremaining60percentofdamageandlosses,indicated61days.


TheenterprisesectorneedsPhp66.8billionforreconstructionandrecoveryactivities.ThisamountcoversPhp64billionforreconstructionandimprovementactivitiesthatincludethepossibilityofresettlingbusinessestosaferareasandPhp2.8billionforworkingcapital.Largeandmediumenterprisesaccountfor96percentofthesetotalreconstructionandrecoveryneeds.Fromaregionalperspective,RegionIV-AneedsPhp32.8billion(49percent)foritsreconstructionandrecoveryefforts,followedbyNCRPhp17.5billion(26percent)andRegionIII(24percent).TherestisforregionsinnorthernLuzon.

Afinancingschemeofgrantsandconcessionaryloansisneededformicroandsmallbusinesses.ThefinancingschemeshouldbecomposedofcarefullypricedandstructuredBusinessDisasterLoans,whichisaRiskMitigatingFacility(RMF)-backedloan,andgrantsforthemicroandsmallbusinessestoaccelerateshortandmedium-termreconstructionandrecovery.28Asdiscussedinthefinancialsectorreport,grantsshouldbedirectedtoaffectedestablishmentswithnoproductiveassetsleftandwithnegligiblecreditworthiness.Smallandmicrobusinessesareinthemostdifficultsituationbecausetheyarealreadyindebtedandlikelytohavedrawndownmostoftheirprivate(companyorpersonal)savingstofinance70percentoftheirdamageandlosses.Noneoftheaffectedmicroenterpriseshaveinsurancecover,whilesmallbusinessesmighthave20percent.Bothbusinesses—microenterprisesinparticular—wouldhavetorelyoninformallendersforfinancingintheabsenceoftargetedpolicymeasurestoprovideaccesstocheapersourcesoffinance.Accesstomicro-credithasbecomemorelimited,asmicro-creditproviderswerealsoaffectedbythetyphoonsaftersomeoftheirexistingclientsinthefloodedareasbecamedelinquent.

Medium-sizedcompaniesneedacreditlineforreconstructionandrecoveryneeds. The credit line should bepackagedintheformofBusinessDisasterLoansthatareforalongertermandwithaquickprocessingtime.29Thiswouldbeaccessibletomedium-sizedcompanies(aswellassmallandmicrobusinesses)thatsustainedonlypartialdamageandlosses.TheexistingSocialSecuritySystem(SSS)CalamityLoanprogramonlycaterstomicroenterprises.Noconcessionaryloansshouldbeprovidedtolargecompanies,sincetheyhaveothersourcesoffundstofinancereconstructionandrecoveryactivities.

Affectedbusinessescanresorttoexistinggovernmentmeasuresthatwillhelpearlyrecoveryofbusinesses. The1997TaxCode,asamended,providessignificantreliefforaffectedtaxpayers,whichincludesValue-AddedTax(VAT)inputrefund,incometaxdeductibilityofnon-insuredlossesandlosscarryforward.

28 GrantsandconcessionaryloansprovidedbytheprivatesectorforenterpriseswouldbefacilitatedbypublicsectorguaranteesofaroundPhp5.6billion(seeFinancialSectornote).


Manufacturing

TheoverallneedsofthemanufacturingsubsectorareestimatedtobePhp11.1billion.Theseneedsaredividedinto(i)provisionforworkingcapital,amountingtoPhp741.3million,and(ii)relocation,reconstructionorimprovementofdamagedpremises;machineryandequipment,amountingtoPhp10.3billion(seeTable18).AmixofgrantsandBusinessDisasterLoansisneededtoencourageafasterresumptionofproduction.

Table 18: Reconstruction and Recovery Needs Assessment for Manufacturing (in Php million)

Region Reconstruction Recovery TotalNCR 7,543.2 207.1 7,750.3CAR 8.7 0.6 9.3I 38.6 3.7 42.3II 8.7 1.5 10.2III 859.3 164.2 1,023.4IV-A 1,903.9 364.2 2,268.0Total 10,362.3 741.3 11,103.6Ofwhich:public:138.1(grants);private(withgovernmentguarantees):933.9;private(withoutgovernmentguarantees):10,031.6

Relocationactivitiesshouldconsiderexternaleconomiesofscale.Whenestablishmentsrelocatetosafersites,theriskofdisturbingthebenefitsderivedbycompaniesfromexternaleconomiesofscaleduetospatialclusteringofindustriesbecomesamajorpolicychallenge.Locatingineconomicallydenseareasprovidescostsavingsandpositivesynergiestoestablishments.Everyeffortshouldbemadetosustaineconomiesofscalethroughrehabilitationoflifelineinfrastructuressuchasroads,electricityandwater.Substantialresourcestosatisfythereconstructionandrecoveryneedsinmanufacturingshouldbedirectedintoleadingareas.NinetypercentofthereconstructionandrecoveryneedsinmanufacturingarisefromtheNCRandRegionIV-A.

Wholesale and Retail Trade

TherecoveryneedsforthewholesaleandretailtradesubsectorareestimatedtobePhp1.6billion.Micro,smallandmediumenterprisesneedfinancingthroughgrantsformicroand/orBusinessDisasterLoansforworkingcapital.AtotalofPhp53billionisneededforreconstructionactivities,includingimprovementsondamagedpropertiesand/orrelocatingtosafergrounds(seeTable19).

Table 19. Reconstruction and Recovery Needs Assessment for Wholesale and Retail Trade (in Php million)

Region Reconstruction Recovery TotalNCR 8,326.4 773.9 9,100.4CAR 74.0 6.2 80.3I 153.5 18.8 172.4

II 10.2 5.0 15.2III 14,679.8 238.2 14,918.0IV-A 29,714.3 540.1 30,254.4Total 52,958.3 1,582.3 54,540.6

Ofwhich:public:330.7(grants);private(withgovernmentguarantees):4,587.1;private(withoutgovernmentguarantees):49,622.8


Acceleratingthereconstructionandrecoveryprogramsinsectorsthatarelinkedwithwholesaleandretailtradeisnecessarytoboostproduction.Fast-trackingtherecoveryintheagricultureandmanufacturingsectors,whichsupplymostofthegoodsandservicestowholesaleandretailtradesubsector(backwardlinkages),willhelpboosttheproductioninthetradesector.Similarly,enablingthelogisticssectors,e.g.,transportation,telecommunication,warehousing,andothersupportservices,suchasbanks(forwardlinkages),willalsofacilitateafasterrecoveryinwholesaleandretailtrade.

Supportfortheagricultureandinformalsectorscanstrengthendemandforgoodsandservicesprovidedbythewholesaleandretailtradesector.Restorationoflivelihoodprogramsintheagricultureandinformalsectorisessentialforprovidingjobsandincomestodisplacedpeopleandthosewholosttheirjobs.Revivingspendingpowerwillcushionthenegativeimpactofthedevastationonconsumerdemand.

Tourism

Aconsiderableportion(59percent)ofthetotalneedsbythetourismsectorisforreconstructingdamagedbuildings,sitesandequipment.ReconstructionneedsarevaluedatPhp726.0million,whilerecoveryneedsforworkingcapitalamounttoPhp508.0million(seeTable20).Acceleratingtherecoveryandreconstructionofthehousingandtransportationsectorswouldfeedbackpositivelyinreducingoperationallossesinthetourismsector.Manyworkersinlabor-intensiveindustries,suchashotels,resortsandrestaurants,werenotabletoreturntoworkbecauseeither(orboth)thebusinessneighborhoodwasfloodedortheyhadtoattendtotheirownfloodedhomes.Rehabilitatinghousingandtransportwillallowtheworkerstoreturntotheirjobsmorequickly.Lifelineinfrastructures(e.g.,waterandelectricity)arecriticalforenablinghotelsandresortstoresumenormaloperations.Thishighlightstheimportanceofcommunity-businesssectorpartnershipssincethewholecommunityandbusinessoperatorswillbothbenefitfromrestoringlifelinepublicgoodsanddisposingdebris.

Marketcommunicationneedstobeintegratedintothetourismdisastermanagementplanandtheoveralldisastermanagementplanofthecountry.Marketcommunicationtocomplementtheoverallschemeofreconstructionandrecoveryeffortsisessentialsinceanydisastertendstohavelongereffectsonthetourismsector.30Thetourismindustrygenerallypossessesahighlyelasticdemandperlevelofperceivedrisk.31Evenifthetyphoonandfloodingdisastersarelocalized,theireffectstendtospillovertothewholetourismindustry.

Table 20: Reconstruction and Recovery Needs Assessment for Tourism (in Php million)

Region Reconstruction Recovery TotalNCR 402.1 264.3 666.4

CAR 21.2 13.7 34.9I 30.2 18.5 48.8II 0.7 0.8 1.5III 93.8 70.6 164.4IV-A 178.1 139.7 317.8Total 726.1 507.6 1,233.7

Ofwhich:public:88.2(grants);private(withgovernmentguarantees):103.8;private(withoutgovernmentguarantees):1,041.7Source:PDNAestimates.

30 Faulkner,Bill,2003.TowardsaFrameworkforTourismDisasterManagementinJeffWilksandStephenPage(eds.)ManagingTouristHealthandSafetyintheNewMillennium.Oxford,UK:ElsevierScienceLtd.

31 Ibid.citingGonzales-HerreroandPratt(1998).


Private Sector Crisis and Recovery Management

APrivateSectorCrisisandRecoveryManagementFrameworkisessential.Businessesarevulnerable,notonlytofloodsbutalsotodisaster-relatedlifelineimpacts(e.g.,electricityandwaterdisruption)anddisaster-inducedoperationalproblems.Commonly,businessestablishmentstendtofocustheirreconstructionandrecoveryeffortswithintheirsites,butnotoncommunity-widesourcesofvulnerabilities,whicharemostlyoffsite.Thissituationstillputsthebusinesscommunityinavulnerableposition,sincereconstructionandrecoveryactivitieshaveelementsofapublic good.Businessreconstructionandrecoveryneedsaretiedwithcommunity-wideloss-reductionactivities.Businesseshaveanimportantstakeinthepromotionofahigherlevelofresistancetodisastersintheircommunitiestoresumeoperationsmorerapidlyinthesamewayascommunitiesbenefitfromimprovedpublicfacilities.APrivateSectorCrisisandRecoveryManagementFrameworkwouldmakethebusinesscommunityunderstandthat“makinglifelinesandotherkeyelementsinthecivilinfrastructuremoreresistanttodisaster-relateddisruptionswillhelpreducelossestoindividualbusinessbyreducingthelikelihoodofbusinessinterruptions.”32Thisframeworkshouldbeintegratedwiththecountry’soveralldisastermanagementframework.


DevelopingthePrivateSectorCrisisandRecoveryManagementFrameworkwouldinvolveNDCC,theSpecialNationalPublic-PrivateReconstructionCommission,governmentlineagenciesandspecialbodiesincludingtheDepartmentofTradeandIndustry(DTI),DepartmentofTourism(DOT)andBangkoSentralngPilipinas(BSP),chambersofcommerceandtradeassociationsandcivilsociety.Aprivateorganizationshouldbeinvolvedintheidentificationandscreeningofdisaster-affectedestablishments(seedetailsinthefinancialsectorreport).

32 Webb,Gary,KathleenTierney,JamesDahlhamer,1999.“BusinessesandDisasters:EmpiricalPatternsandUnansweredQuestions.”DisasterResearchCenter,UniversityofDelaware.Preliminarypaper#281.


Recovery Framework: Enterprise Sector

Outcomes Baseline Priority Activities to December 2010 Priority Activities to December 2012

Achieve6.2percent(2009)and1.1percent(2010)growthinmanufacturingsubsectorfromthe baseline pre-disastergrowthfiguresof-6.4percent(2009)and0.8percent(2010)

Themanufacturingsubsector sustained P9.8billionworthofdamage to buildings, warehouses,equipment and machinery.ItalsoincurredP9.1billionworthofrevenuelossesfromdamagedinventories and other disaster-induced operationslosses.Atotalof16,774establishmentswereaffected.

1. Screeningandsegmentingestablishmentswhowillqualifyfor:

• financingfacilities: – grants and concessionary loans

(intendedforsmallandmicroenterprises)

– specialcreditline,e.g.BusinessDisasterLoanProgram(intendedformediumbusinesses)

• interestcredits2. Approvalanddisbursementofgrants,

loans/creditstobusinesses;approvalofinterestcredits.

3. Restorationoflifelineinfrastructures(e.g.,electricityandwater)

FinancingNeedsforManufacturing: Php 11.1 billion

Identificationof“safe”sitestorelocateindustrialfirmsProvisionofsameorbetterinfrastructuresMarketthe“safe”industrial siteDevelop and implement a Private Sector Crisis and Recovery Management Framework

Achieve0.6percent(2009)and2.2percent(2010)growthinwholesaleand retail trade subsectorfromthe baseline pre-disastergrowthfiguresof2.5percent(2009)and2.9percent(2010)

Damage and losses in theinthewholesaleand retail trade subsector reached P89.3billion.Ofwhich,inventorylossesforall establishments comprisedP72billion.Some40,698establishmentsinwereaffected.

1. (sameas1and2above)2. Identifyandimplementrapidrecovery

programs on livelihood and employment inagricultureandinformalsector.Thiswillrestorespendingpowerandwillfeedintowholesaleandretailtrade.

3. Identifyandimplementrapidrecoveryprogramsinsectorshaving“backwardlinkage”withwholesaleandretailtrade(e.g.manufacturing,agriculture)

4. Identifyandimplementrapidrecoveryprogramsinsectorswhichhave“forwardlinkage”withwholesaleandretailtrade(e.g.,logistics)

FinancingNeedsforWholesaleandRetailTrade:Php 54.5 billion

1.(sameas#4above)

Achieve4.8percent(2009)and3.6percent(2010)growthinprivate services, whichincludesthetourism subsector, fromthebaselinepre-disastergrowthfiguresof3.2percent(2009)and3.4percent(2010)

Damage and losses in the tourism subsectortotaledP3.1billion.P2.5billionapportioned to damage to premises and equipment.Atotalof10,211establishmentswereaffected.

1. (sameas1and2–seethirdcolumnonmanufacturingsection)

2. Identifyandimplementrapidrecoveryinthetransportandhousingsectorswhichwillfeedintoreducingdisaster-inducedoperations(supply-side)lossesinthetourismsubsector.

3. Developmarketcommunicationstrategytoreducepersistenceof‘negativeperception’

FinancingNeedsforTourism:Php 1.2 billion

1. Developandimplement a Tourism Sector Disaster Recovery and Management Framework(tobe integrated in Private Sector Crisis and Recovery Management Framework)


Social Sectors

“My husband is a taxi driver in Baguio City and had to keep working. The children were absent [from school] for two weeks because they have no books, notebooks, pencils and clothes.” –WomanfromAguias,Naguillian, La Union

JeromeAscañ

o


Housing SectorSummary

ThehousingsectorwasheavilyimpactedbytyphoonsOndoyandPepengwhichleftabout220,000homescompletelyorpartiallydamagedbyfloodwatersacrossLuzon(Map2).Hundredsofthousandswerelefthomeless,withdamageandlossesestimatedatPhp25.5billionandPhp8.9billion,respectively(Table21).Damagesincluded:(i)damagetothehomeitself;(ii)householditems,estimatedasafractionofthetotalconstructioncost;and(iii)damagetohome-basedinformalmicro-enterprises.Thebiggestshareofdamageisconcentratedintheinformalsectorandconsistsofmakeshiftdwellingslocatedinfloodproneareas.Mixedandstrongmaterialdwellingsexperiencedlesstotaldamagebutmoderatelevelsofpartialdamage,whiletraditionalandhigh-endmaterialhomesexperiencedtheleastamountofdamage.Lossesincluded:(i)thecostofthedemolitionandrubbleremovalfordestroyedhomes;(ii)temporarylossofrentalincomeincurredbyownerswhosestructuresweredamaged;(iii)thecostoftemporaryshelterschemesforthosemadehomelessbythefloods.Amongmakeshiftandmixedhousing,thenumbersofrentersarehigh,accountingformostoftheloss.

Table 21: Damage, Losses, Effect on the External Sector and Fiscal Budget for Housing Sector (in Php million)

Damage LossesExternal sector Fiscal budget

Public Private Public Private

- 25,453.8 2,221.8 6,650.3 5,629.3 4,203.1

Thetotalfinancingneeds,basedonin-cityrelocationwhichisconsistentwiththeGovernment’spreferredhousingpolicyoption,arePhp75.7billionfortheperiodofthePDNA(plusPhp17.0billionfortwofurtheryears)(Table22).Financingisneededinthefollowingareas:(i)technicalassistance;(ii)capacitydevelopment,(iii)housingrepair/riskreduction,(iv)shelterandtransitionalhousing;(v)housingreconstructionand(vi)housingforfamilieslivinginflood-proneareas.Theneedsinhousingincludeabout94,000newhousingunitsrelatedtodamagecausedbythetyphoons.Inaddition,approximately83,000householdsarecurrentlylivinginlandconsideredatriskfromwater-relatedhazards.Relocationofthesehouseholdstohighergroundisnecessarytoensuretheirsafety.Constructionunderthe“buildbackbetter”premisewillrequireensuringimprovedhousingdesignandconstructionsolutionsintendedtoreducecostsforpeoplebeingrelocatedandtoensuretheirparticipation.

Table 22: Summary Financial Needs for Reconstruction and Risk Mitigation for Housing Sector (in Php)

0-6 mos 7-12 mos 13-36 mos 36-60 mos Total %TechnicalAsistance 79,900,000 119,850,000 199,750,000 - 399,500,000 0.4%CapacityBuilding 65,330,009 65,330,009 195,990,028 - 326,650,047 0.4%HousingRepair/RiskReduction 2,819,172,480 2,819,172,480 1,409,586,240 - 7,047,931,200 7.6%ShelterandTransitionalHousing 2,414,427,229 1,810,820,422 1,810,820,422 - 6,036,068,074 6.5%HousingReconstruction 2,812,226,328 11,248,905,312 42,183,394,920 - 56,244,526,560 60.6%Housing related to WaterHazard(MM) 454,456,400 681,684,600 4,544,564,000 17,042,115,000 22,722,820,000 24.5%Total 8,645,512,447 16,745,762,823 50,344,105,610 17,042,115,000 92,777,495,881 100.0%

Mar

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ante


Map 2: Damaged Housing, by Region


Toreducetheimpactoffuturestorms,policiesanddevelopmentpracticesinurbandevelopmentandhousingneedtobeaddressed.ThemostimportantinitiativeistoensurethatLGUsdevelopcomprehensivelandusemapsthattakeintoaccountrisk-sensitivelanduseplanning.Fromthesemaps,itisnecessarytophaseinandenforcezoningordinancestoensurehousingisnotlocatedinareasofeminentdanger.NationalandLGUpoliciesonhousingneedtobedevelopedtoensurethatacoherentprogramofslumupgradingandurbanrenewalcanbedevelopedinthecontextofpreparingaCityDevelopmentStrategy(CDS)33.Forhouseholdsrequiringrelocationduetodisasters,programsshouldalwaysensureparticipatorymechanismsleadingtoconsensus-basedsolutions.Itisalsonecessarytoensurethelong-termlivelihoodsofdisplacedhouseholdsthroughmeasuressuchasin-cityresettlementclosetoexistingemployment;theprovisionofnew,ampleincomeopportunitiesinhousingsitesoutsidemetropolitanManila;andaffordabletransportand/orhousingfacilitiesforwageearnersofresettledhouseholdswhoworkinthecity.Inaddition,newandimprovedfinancialintermediationpracticesareneededtoensurethatthecurrentwillingnesstopayamongmostlow-incomehouseholdsistransformedintoreliablemortgagerepayments.Inmostcases,targetedsubsideswillberequiredtoensureaffordabilityforthepoor.Insomecases,public-privatepartnershipsolutionscouldbecraftedtoenablethefinancingoflow-incomehousingbytheprivatesector,inwhichcaseNGOandprivatesectorintermediation(microfinance)wouldbethepreferredmodality.

Affected Housing and Immediate Relief

Thehousingstockintheaffectedareasisdefinedintermsoffivetypes:

Vernacular dwellings.Composedofreadilyavailable,inexpensive,primarilynativematerials,thesestructureshousedallFilipinosbeforetheSpanishperiod,andtheyarestillbeingwidelyusedbylow-incomepeopleinvillagesandruralareastoday.Vernaculardwellingsworkwellasaprotectionagainsttheelements,are20sqminsize,andareelevateduptotwometersovertheground,asasimpleyeteffectivedesignagainstflooding.Thesepile-dwellingstructuresfeaturewoodentrunksastheirfoundation,bambooandcogongrassforthemainbody,andrattanstripstobindthemtogether.Theroofismadeofbamboo,coveredbyathicklayerofstraw,oftenfeaturingsmallopeningsatthetop,creatinganaturalventilationsystemandlettingstrongwindgothroughthestructurewithoutdamagingit.Moreover,theirlightnessandflexibilitymakethemextremelyresilienttoearthquakes.Thelowerfloorhostsdailyactivities,whiletheupperonehasalargebedroom.Usually,thetoiletislocatednearthehouse.

Makeshift dwellings.Usuallybuiltbytheownersoutofsecond-handmaterials,thesedwellingsareusuallyfoundininformalsettlementsinthecities.Onaverage,makeshiftdwellingsare20sqminsizeandfeatureamainstructureoflighttimberbeamsandboard,coveredbyoverlappingmetalsheets.Theyareveryweak,andmanyofthemarelocatedinareashighlypronetoflood s, suchasriverbanks,waterways,easements,andalluvialplains.Typically,thesedwellingsarethehousingstockforthepoorandlow-incomeearners.Sometimes,evensalariedincomeearners,suchasgovernmentemployeesandteachersliveinthesedwellings,asthehighlandvaluepreventsthemfromaccessingformalhousing.Itiscommonthattheoccupantsofthesedwellingsdonothavepropertytitleandarethereforeataconstantriskofeviction.

Mixed dwellings.Mostofthelowermiddle-incomeresidentsliveinmixedhousesofabout30sqm.Theyaremadeofconcreteblockscomprisingofpoorlyreinforcedconcretepillarsattheirfourcorners.Often,thesepillarshaveonlyaverticalsteelbarattheircore.Theroofisusuallymadeoflighttimberbeamscoveredbyundulatedmetalsheets.However,theirstructureandthe

33 FormoreinformationonCityDevelopmentStrategiesseehttp://www.citiesalliance.org/ca/cds.


heavinessoftheirwallsmakethemveryvulnerabletoearthquakes.Liketheprevioushousingtype,thisdwellingisfoundinfloodproneareas,althoughtheslighthigherwealthoftheiroccupantsallowthemtoaccessbetterlandfortheirconstructionincomparisonwiththeprevioushousingunit.Theycanbeinformalorinformalsettlements.

Strong dwellings.Themiddleclassliveinhousesofabout50sqm,whosewallsandroofaremadeofreinforcedconcrete.Inmanycases,eachbuildingfeaturesmultiplehousingunits(condominiums)andthishousingisfoundintownsandcities.Giventhehigherwealthoftheirhouseholds,themajorityofthempossesslegalownershipoftheirstructure,withvariousyetgenerallylowriskofflood.However,theirstructuralfeaturesarenormallynotstrongenoughforanearthquakepronecountry,asbeamsandpillarshavepoormetalreinforcementandoftendonothaveanystirrups.

High-end dwellings.Thelasttypeofhousingisusedbythewealthiestpopulation,hasanaveragesizeof200sq,anditswallsandroofaremadeofreinforcedconcrete,althoughtheirstructuralstandardisbarelysufficientforacountrypronetoearthquakes.Giventhewealthoftheiroccupants,theyareusuallyfoundinareaswithalowrisktofloods,butincreasingly,duetotheskyrocketingurbanizationinlargercities,manyofthesehousingunitshavebeenbuiltinfloodproneareas,tobeclosetotransportcorridorsortocommercialdistricts.

OndoyandPepengcauseddamageinabout300LGUs.Thedisasterhasforcedhouseholdsaffectedtoresideintemporaryevacuationcenters(about90,000),moveinwithrelativesorfriends,seekshelterelsewhere,orsimplyreturntotheirprovinces.Theimmediatefocusofthenationalandlocalgovernmenthasbeentoprovideshelterandfoodforthoselefthomelessbythefloods.Mostevacuationcenterswerecreatedfromexistingpublicfacilities,usuallyschoolbuildings,coveredcourts,barangayhalls,andotherpublicfacilities.Privatevenues,suchaschurches,alsoassistedinprovidingshelteroptions.

Damage and Losses to the Housing Sector

ThroughsitevisitstothemostaffectedLGUs,itbecameclearthatthemaincauseofdestructionwasthelocationofthedwellings,ratherthanthebuildingmaterial.

AllhousesinthePhilippinesareprivatelyowned.ThereareafewdwellingsbuiltbyLGUsandcentralagencies,butastheyareallgiventofamiliesunderrent-to-ownprograms—atypeofsubsidizedmortgage—theirownershipcanbeconsideredprivate.ThetotaldamageswereestimatedatPhp25.5billion,allintheprivatesector.Housinginaffectedareasexperiencedeitherpartialortotaldamagessincefloodingvariedinseverity.Totallydamagedhomeswereclassifiedasthosestructuresthatcouldnotbesalvaged;partiallydamagedhomesexperienceddamagetooneormorephysicalfeatures,butcanberepaired.Thisdefinitionisvalidformerelyeconomicreasons,relatedtotheestimationofdamageandlosses,anddoesnotimplythatalltotallyorpartiallydamagedhousescouldberebuilt,asmanyofthemarelocatedinfloodproneareas34.Anaveragevalueforeachhousingtypewasestimatedcoveringthephysicaldamagetothehousingstructureanddamagetohouseholditems(Table23andTable24).

34 AccordingtogovernmentfiguresreleasedbytheNationalDisasterCoordinatingcouncil,about28,000homesweretotallydestroyed,whileabout190,000werepartiallydamaged.However,duetotheimmediateneedsofthedisaster,datacollectionwasstillongoingatthetimeofthisPDNA.Thehousingsectorteamdecidedtodouble-checkthesefiguresinthemostaffectedlocalgovernmentunits,whichfeatured85percentofthedamagedhouses.Basedonthisfurtherresearch,figureswereeventuallyupdated.


Table 23: Average Physical Damage, by Housing Type and Level of Damage (in Php)

Totally damaged Partially damagedTraditional houses 100% 20,000 50% 6,000Makeshiftdwellings 100% 20,000 50% 6,000Mixed-materialhouses 100% 112,000 40% 33,600Strong-material houses 100% 600,000 20% 180,000High end houses 100% 5,000,000 10% 1,500,000

Table 24: Average Damage of Household Items, by Housing Type and Level of Damage (in Php)

Totally damaged Partially damagedTraditional houses 100% 15,000 40% 6,000Makeshiftdwellings 100% 15,000 40% 6,000Mixed-materialhouses 100% 100,000 40% 40,000Strong-material houses 100% 500,000 40% 200,000High end houses 100% 3,000,000 40% 1,200,000

Traditionalhousingdemonstratedabilitytowithstandstrongwindsduetotheflexibilityandwindpermeabilityoftheirmaterialsandtheircorrectlocation:onlyafewofthemareamongthosethatwereeithertotally(twopercent)orpartiallydamaged(onepercent).Makeshiftdwellingsrepresentthemajorityofthetotallydamagedhousing(78percent),andahighpercentageofthosepartiallydamaged(37percent).Mixedhouses,whicharemadeofconcreteblocksandmetalroof,havesufferedlessdamagebecauseoftheirslightlybetterlocation:theyhavebeenonlypartiallydamaged(50percent),whereasamuchlowerpercentagehasbeentotallydamaged(17percent).Onlyafewconcretehousesareamongthosetotally(threepercent)orpartiallydamaged(10percent),asthewealthoftheiroccupantspermittedthemtoaccesssaferareas.Lastly,nohigh-endhomesweretotallydamaged(0percent),butafew(1.5percent)wereamongthosepartiallydamaged.Homesthatwerewashedawaylosteverything(100percentofthehousingvalueand100percentofthehouseholditemsvalue).Thephysicaldamagetothepartiallydamagedhouseswascalculatedasapercentageoftheconstructionvalue(50percentfortraditionalandmakeshiftdwellings,40percentformixedstructurehouses,20percentforreinforcedconcretedwellings,and10percentforhigh-endresidences.Sincethosewithpartiallydamagedhousingwereabletorecoveraportionoftheirbelongings,only40percentoftheirvaluewastakenintoaccountasaphysicaldamage.Tocapturetherealvalueinsuchadifferentiatedhousingstock,differentunitcostsweregivenforitemsthatcanbetypicallyfoundineachhousingtype.35(Figure3aandFigure3b).

Prevalentintheinformalsector,home-basedbusinessesusuallyoccupythefirstlevelofastructure,therefore,intheaffectedareasthesebusinessesweredestroyedordamaged36.Damagesintheinformaleconomywerechallengingtoestimate,primarily,becauselittlebaselinedataexistonthescopeoftheinformalsectorinmostLGUs.Datarelatedtoenterprisesregisteredunderamayor’s

35 Thehousingteambasedthesevaluesoninformationfromthe2006FamilyandIncomeExpendituresSurvey,interviewswithevacuees,andtailoredmarketanalysis.Acrosshousingtypes,commonassetsincludedelectronics,clothing,furniture,cookingequipment,aswellasotherassetsownedbytheoccupants,suchascars,bikes,andmotorbikes.

36 Sari-saristores(smallconveniencestores),tailoringandrepairshops,computercenters,andbeautyparlors,aresomeofthecommonmicro-enterprisesfoundinthehome.Vendorsandtricycledrivers(motorcycletaxis)arealsoconsideredinthiscategory,astheystoretheircapital(merchandiseinthecaseofvendorsandtricycleinthecaseofdrivers)intheirhomes.Damagestofoodgoods,sewingmachines,tools,andequipmentrelatedtoincomegeneratingactivitiesareconsideredpartofhouseholddamages.


permitwereused.Informationfromseveralsocio-economicprofilesofinformalsettlementswasalsousedtoestimatetheprevalenceofhome-basedmicro-enterprisesincommunities.Avaluewasgiventoahome-basedbusinessforlightandmixedstructuresonly.Thefigurewasaveragedfromarangeofcapitalinvestmentamountsasreportedbylocalgovernmentlendingagenciesandinterviewswithinformalsectorbusinessowners.

Theestimationofthelossestookintoaccountthecostofclearingup,demolishing,removingrubble,transportingtolandfill,anddebrisprocessing,thecostoftemporaryshelterscheme,andthelossofrentalincome.Costofdemolition,rubbleremovalandprocessingwasestimatedat10percentoftheconstructioncost.Thismeansthatfortotallydamagedhousingthecostwas10percentofthetotalvalue,includingconstructionandhouseholditems,whereasforpartiallydamagedhousingthis10percentwascalculatedontherealphysicaldamageofeachhousingtypedefinedaspertheaboveexplainedmethodology.

Theevacuationcentersplantostayopenatleastfor90days,andthecostofelectricity,water,food,andsanitationfacilities(aboutPhp80perpersonperday)ismainlycoveredbythepublicsector,withfoodandclothingdonationsalsocomingfromtheprivatesector.Victimsoutsidetheevacuationcentersarebeingassistedbytheirrelatives(atanaveragecostofPhp40perday).Whentheevacuationcentersclose,itislikelythatsomeofthosemadehomeless,especiallyinMetroManila,willberelocatedtoareasawayfromtheirexistinghomes.Experiencesuggeststhatabsentnewlivelihoodopportunitieswithasimilarlevelofsecurityandremunerationaspreviouslivelihoods,peoplerelocatedmaychoosetoreturntotheirpreviousplaceofresidence.Ensuringcommunitycohesionismaintainedisalsoimportant.Otherswhocannotbeaccommodatedthroughgovernment-supportedrelocationprogramsmayseekalternativeaccommodationwithrelatives,seekshelterontheirown,ortheymayfeeltheyhavefewalternativeoptionsotherthanrebuildmakeshiftdwellingsinfloodproneareas.

Lossesinrentalincomearedistributedasfollows:outofthedamagedhousingstock,30percentoftraditionalandmakeshiftdwellings,50percentofthemixedhouses,25percentofthosemadeofreinforcedconcrete,and10percenthighendhousingwererentedout.Thedurationofsuchlosseswascalculatedbyaccountingthetimeneededtoreconstructeachhousing(traditional,threemonthsfortotallydamagedandoneandahalfforpartially;makeshift,threemonthsfortotallyandoneandahalfforpartially;mixed,eightmonthsfortotallyandfourforpartially;concrete,12monthsfortotallyandfourforpartially;highend,18monthsfortotallyandfourforpartially).Theaveragerentalwasestimatedfollowingdirectinterviewswiththeaffectedpopulation(vernacularPhp500;makeshiftPhp500;mixedPhp3,000;concretePhp6,000;Phphighend100,000).Asaresult,thetotallosseswereestimatedatPhp8.9billion,ofwhichPhp2.2billionfellinthepublicsectorandPhp6.7billionintheprivatesector.

Figure 3a. Housing Stock Totally Damaged, by Type

Figure 3b. Housing Stock Partially Damaged, by Type

2%3%

17%

78%

2%

10%

37%

50%

1%

Mixed ma terial houses

Strong ma terial houses

High end houses


Additionalexpensesintheexternalsector werecalculatedwithoutconsideringthatmanyhousesshouldberebuiltelsewhere;thiswillbecapturedbytheneedsassessmentbelow.Thereconstructionofthehousingstock,asitwasbeforethedisaster,wouldrequireanincreaseintheimportationofconstructionmaterials(forinstance,steelandotherbuildingmaterials,estimatedatPhp3.7billion)andhouseholditems(forinstance,carsandsomeelectricappliances,estimatedatPhp1.9billion).ThetotalamountoftheseadditionalexpenseswasestimatedatPhp5.6billion.Theestimationconsideredalsotheeffectofthefiscalbudget.ThisincludeddirectgovernmentspendingfromtheCalamityFundthatwouldbelikelyusedforimmediateneedsbeyondreliefbythecentralgovernment(PHP2.0billion)andbytheLGUs(Php1.8billion).Inaddition,therewillbeareductionintaxcollectionduetofallinutilityconsumption(Php120million),aswellasareductionintaxesduetolossinrentalincomeandconsumption(Php333million).ThereforethetotalimpactonthefiscalbudgetwouldbePhp4.2billion.(Table25)

Table 25: Damage, Losses, Effect on the External Sector and Fiscal Budget for Housing Sector, by Region (in Php million)

Region Damage LossesExternal sector Fiscal budget

Public Private Public PrivateCAR - 781.6 68.2 204.2 172.9 129.1

I - 2,625.0 229.1 686.0 580.5 433.4II - 1,597.4 139.4 417.3 353.3 263.8III - 327.7 28.6 85.6 72.5 54.1

NCR - 6,529.6 570.0 1,706.0 1,444.1 1,078.2IV-A - 13,574.7 1,184.9 3,546.5 3,002.1 2,241.5

V - 5.4 0.5 1.5 1.2 0.9XII - 12.4 1.1 3.2 2.7 2.0

Total - 25,453.8 2,221.8 6,650.3 5,629.3 4,203.0

Needs in the Housing Stock

FloodingassociatedwithOndoyandPepengtotallydestroyed27,602unitsandaffectedabout40,000houseswhichneedtoberebuiltelsewhere.Takingintoaccountreplacementoflostunits,reducing“doublingup”ofhouseholdsandsecondaryrelocationcausedbynewconstructionitisnecessarytorebuildover93,700newhousingunits.ThetotalinvestmentfortheunitsisPhp56.2billion.Thebreakdownofthehousingtypes,numberofhousingunitsandcostispresentedinTable26.

Table 26: Housing Reconstruction to Replace and “Build Back Better” Housing Units (in Php)

Number of Housing UnitsLocation FinishedMidrise CoreMidirise CoreHorizontal ServiceLot TOTALNCR+IVA 8,081 48,487 12,433 6,216 75,217OtherRegion 2,150 6,450 6,616 3,308 1,852TOTAL 4,154 15,702 14,456 7,228 93,741 Total Cost (in Php) MarketRate SelfBuiltSocialHousingwithCapitalSubsidy TOTALNCR+IVA 4,848,685,920 29,092,115,520 7,459,516,800 3,729,758,400 45,130,076,640OtherRegion 1,290,070,080 3,870,210,240 3,969,446,400 1,984,723,200 11,114,449,920Total 6,138,756,000 32,962,325760 11,428,963,200 5,714,481,600 56,244,526,560


Inadditionthereareabout83,000housesinpotentiallycatastrophicdangerasaresultoftheirlocationinwaterhazardsintheMetroManilaarea.Overtheshorttomediumtermitwillbenecessarytorelocatetheseunitstosafegroundrequiringatleastanequalnumberofunitsandpossiblymoreif“doublingup”andsecondaryresettlementisnecessary,atanestimatedcostof Php22.7billion.(Table27)

Overall housing needs.ThefinancingneedsofthehousingsectorwerecalculatedbythePDNAmethodologytoincludethetotalhousingneedsasmarketvalueaswellasreplacementofhouseholdandlivelihooditemslostduringflooding.Thetotalneedsintheshort-termhavebeenassessedatPhp21billionandinthemedium-termatPhp49billion.Itisevidentthattheneedsidentifiedcannotbecoveredbyagovernmentsponsoredorfacilitatedprogram.

Theassessmentidentifiedthreedistinctstakeholders:(i)vulnerablegroupsdisplacedbyfloodingfromthetwotyphoonsthatdonothavethefinancialmeanstorecoverwithoutassistancefromawell-structuredlow-incomehousingprogram;(ii)thelargenumberofhouseholdslocatedindangerareaswhoneedtoberelocatedtoreducelifethreateningconditions;(iii)otherfamilieslivingininformalsettlements—withsubstandardaccesstoservicesandinover-densifiedareaswithnoproperaccessroads.Thefirsttwogroupsidentifiedinthisneedsassessmentrequirepriorityaction,whilethethirdandlargestgrouprequiresalonger-termstrategyofurbanrenewalandslumupgrading.

Thevastmajorityofhousesdestroyedwereinunsafelocations,andapproximately20percentofallpartiallydestroyedhousesarealsoinunsafeareasandwillneedtoberelocated.Oftheremainingaffectedhouses,60percentwillberepairedandhavevulnerabilityreductionmeasures.Theremaining20percentwillbeonlyrepaired.Forthehouseswhichwillremainontheiroriginalsites(80percentofpartiallydamagedhouses)abetterwarningsystemandevacuationplanwillneedtobeimplemented.Thisapproachseekstooptimizescarceresourcesandbeprogressivebytargetingthepoorandvulnerablegroups.

ThecalamityissuperimposedonahousingdeficitinthePhilippinesestimatedtobe3.7millionin2010.InMetroManilaalone,thetotalbackloghasbeenprojectedtoreachcloseto500,000units(UrbanDevelopmentandHousingFinalReport,HUDCC).ThecausesfortheproliferationofslumsandthehousingdeficitinManilaarewellunderstoodbylocalexperts.Themagnitudeofthecalamityinthehousingsectorcanbemanagedasacatalyticeventtowardsimprovingaffordablehousingsupplyandlanduseplanning.Ifhandledas“businessasusual”thehousingproblemsthatalreadyexist,particularlythoserelatedtohousingofthepoor,willbeexacerbated.

Key Polices on Reconstruction

Land Use.Oneofthemostimportantfactorscontributingtothegravemagnitudeofthecalamityiscurrentlandusepattern,practice,andpolicy.Currentlegislationalreadyprohibitsthesettlementonlanddeemedtobedangerous.However,enforcementhasnotbeeneffective37.Intheshortrun

37 Asof30October2009,inMetroManilaalone82,931familiesareconsideredtoberesidinginlanddeemedtobedangerousduetoproximitytoawaterway.

Table 27: Housing Construction Required to Establish Safe and “Build Back Better” Housing for Families Living Near Water Hazards in Metro Manila (in Php)

Unsubsidized Requiring Subsidies to Target Poor Rise Core Mid Rise Core Horizontal Site and Service Total SubsidizedUnitsWaterHazard 0 49,758 24,879 8,293 82,930Costperunit(PHP) 600,000 330,000 100,000Total Cost per Type (PHP) 0 16,420,140,00 5,473,380,000 829,300,000 22,722,820


itisnotfeasibletorelocatethislargepopulation.However,measuresneedtobetakenbeforethenexttyphoonseasontoensurethesafetyofthemostvulnerablehouseholds.Itisnecessaryforthemunicipalitiesaffectedbythefloodtoupdatetheirlanduseplans.Itisalsourgenttoestablishaprogramtocompleterelocationinthemedium-term.Householdsalreadydisplacedduetothetotaldestructionoftheirhousesbythetyphoonsshouldnotbepermittedtoreturntolandthatisclearlyunsuitableforhousing.Landshouldnotbeleftidleandvulnerabletoillegalresettlement.Alternativelandusesuchasparks,sportsfacilities,plantnurseries,urbanforests,andurbanagricultureamongothersareoptionsfortheseplotsofland.

Relocation Policy.Anequallyimportantconsiderationiswhetherrelocationwilltakeplace“incity”closetowheretheaffectedpopulationwasresiding,or“offcity”/“nearcity”,somedistancefromtheywereresidingmakingitnecessaryforfamiliestofindalternatelivelihoodorfacehightransportationcostsandcommutingtime.Theprincipalmotivationforoff-cityrelocationisintheexpediencyoftheprocessaswellasminimizingtheimmediatefinancialconsiderationsrelatedtothecostofland.Nevertheless,theeffectivenessofoff-cityrelocationthroughouttheworldisnotencouraging.Givenhardshipsencounteredbyfamiliesahighproportionofresettledfamiliestendtoreturntothelocationfromwhichtheyweredisplaced.AsreportedtothePDNAteam,theexperiencewithoff-ornear-cityresettlementinthePhilippinesfollowsthisglobaltrendandhaslowreportedretentionrates.Absentimmediatealternativegivenashortageofland,intheshorttermtheneedforsomenear-cityrelocationmaybeinevitable.Inthesecircumstances,itwouldbeimportanttocarryoutanindependentandparticipatorysocio-economiccost-benefitevaluationofthePhilippineexperience.Suchanassessmentwouldprovideinsightintotheeffectivenessandsocialimpactof“nearcity”relocation.Suchananalysiswouldpermitanobjectiveassessmentoffeasibleshort-,medium-,andlong-termoptionsforresettlement.

ThePDNAteamissensitivetotheneedsexpressedbyHUDCCtocommititselftoin-cityrelocationasthefirstrelocationoption.Giventhecostsandcomplexitiesofin-cityrelocation,itisnecessarytodevelopnewandefficientsolutionstoachievecost-effectiveurbanrehabilitation.In-cityrelocationhasbeenstronglysupportedbyinternationaldevelopementandpartnersinothercountriesandisconsideredgoodpracticeasexemplifiedbyongoingworkinBrazilandinIndia.InthecaseofthePhilippines,thefeasibilityofthisapproachwillbedefinedbythelevelofcommitmentandeffortbyallstakeholders.

ThePDNAteamhasestimatedthefinancialneedsbasedonanin-cityrelocationstrategy.Thisapproachwillrequireeffectiveidentificationandmappingoflandsuitableforhousingincludinglandwherehighdensityinformalhousingcanbefound.Theadvantageofworkingonlandcurrentlyusedforinformalhousingincludeslowrelativecost,theopportunitytopromoteproperurbanformandanenvironmentconducivetoupgrading.Byrelocatingaffectedareastoareaswhichalreadyrequireupgrading,asecondarybeneficiarypopulationwillbeidentifiedexpandingthebenefitsofthereconstruction.Thisiscriticalinbuildingaconstituencyforpromotingincityrelocation.

Thepracticeofoff-cityrelocationshouldbeconsideredasasecondoptionandrequiresnotonlytheparticipationbutalsotheconsensusofthebeneficiaries.Furthermore,forthegovernmenttobeabletoavailitselfofODAtosupporthousingdevelopmentprograms,itwillbenecessarytoensurecompliancewithrelevantsafeguardpoliciesofinternationaldevelopmentpartnerscoveringrelocation.

Housing Solution.Fourdifferenttypesofhouseswillbeusedunderthe“buildingbackbetter”philosophyforlowandlowermiddle-incomehousing:


• Vertical housing units built under commercial scheme with finishing.Thistypeofhousingistargetedtolowermiddleincomehouseholds.Itisimportanttoensureaviablesolutionforthissegmentoftheincomedistributionwhichwouldotherwisecompeteanddisplacethepoorerhouseholdsfromcorehousing.

• Vertical “sweat equity” core housing,prevalentstyleforNCRandotherurbanizedareas.Thiswillnomorethanfivestories,permittingdensificationwhilealsoallowinghouseholdstolowertheircostbyvolunteeringapproximately1,000hoursofworkandbyreceivingcorehousingrequiringfinishing.

• Core horizontal housingbuiltundertheprovenmodelsofvariousNGOsincollaborationwithlocalandnationalgovernmententities.Thishousingwillrequire“sweatequity”fromeachhouseholdandwillproduceacorehouseofnolessthan26squaremetersinawellplannedandservicedsite.

• Self built horizontal housing on an improved lottargetingthepooresthouseholds.Itwillprovidethemwithasafesolutionandwillfocusonimprovingthequalityofhousingfromalocationalperspectiveaswellasonensuringsustainableservices.

Itisexpectedthatmidrisehousingsolutionswillbebuiltinbrownfieldsitesensuringtheorderlydensificationofurbanareaswhilehorizontalsolutionswouldbeprimarilygreenfieldsolutionsexpandingtheurbanareawhereappropriate.Forthispurpose,itiscriticalthataninventoryoflandavailableandsuitableforbrownfieldandgreenfielddevelopmentbeconductedasoneofthefirststepstoreconstruction.

GiventhescarcityoflandsuitablefordevelopmentintheNCRandRegionIV-A,in-cityrelocationwillrequiresignificantuseofmedium-risehousingasthepredominanthousingsolution.Outsidethesetworegions,thehorizontalhousingsolutionwillpredominate.InNCRandIV-Aitisexpectedthat60percentofthereconstructionhousingsolutionsfortheinformalsectorwillbecoremedium-risecondominiumbuildings.ThesemidrisecondominiumsareexpectedtobebuiltfollowingthegeneralprinciplesthathavemadeprogramslikeHabitatforHumanitysuccessful.ForregionsotherthanNCRandIV-A,thehorizontalsolutionisexpectedtobeappliedtoreplaceapproximately30percentoftheaffectedhouses.Dependingontheabilityandwillingnesstopayoftheaffectedhouseholds,thebalanceofthemedium-risebuilding(10percent)couldbeproducedthroughcommercialpracticeswithfinishedinteriors.

Table 28: Proposed Housing Solutions for the Reconstruction (in Php)

Land Type Housing Type Unit Cost NCR and IV A Other Regions

Brownfield Finished Mid Rise 600,000 10% 10%

Brownfield Core Mid Rise 330,000 60% 30%

Greenfield CoreLowDensity 220,000 20% 40%

Greenfield Serviced Lot 100,000 10% 20%

Housing Design.Thephysicaldesignshouldbeconceivedinaparticipatorymannertoensureinputfrombeneficiaries.Forexample,inTaguigCitythe26sqmfootprintoflow-income,medium-risehousingfeaturessufficientlyhighceilingstohaveexpandableloftspace.Theseunitsneedtohavewindowsontwooppositesidestohavecrossventilation.Selfbuilthorizontalhousingdesigncanalsoconsiderthisfeature.Siteandservicesselfbuilthousingwillleavefreedomtothehouseholdsamongdifferentdesigns.


Site Development Standards.Currentsitedevelopmentstandardsandpracticeareresultinginclutteredurbanspacesthatdonotprovideadequateaccessforemergencyvehiclesandenoughpublicspacestoenablerecreation–especiallyforchildrenandtheelderly.Itisproposedthatnewhousingaddressthisdeficiencyandincludeamenitiesnecessaryforphysicalandmentalhealth.BestpracticesfromthePhilippinesorothercountriescanbeconsideredbutshouldbeadaptedtolocalconditions.

Whicheverthehousingsolutionselected,itwillneedtofitintoanoverallcommunitydevelopmentinitiativethatshouldensurehouseholdsareintegratedintotheirnewenvironmentasmembersofaneighborhoodandacommunity.Akeyaspectofthisintegrationwillbeapracticalinductiondidacticprogramwhichwillenablemembersofthehouseholdtobondwiththeirnewcommunity,aswellasbegintoorganizethemselvesinthecaseoftheverticalhousingsolutionsascondominiumorganization.Periodicmonitoringandtechnicalassistancetotheassociationswillbeprovided.

Overall Financing Needs and Implementation Strategy

Financing Recovery and Reconstruction. Thereconstructionwouldhavesixmajorfinancingsources:(i)nationalgovernmentcontributions,includingcapitalsubsidiesaswellasintheformofpublicland;(ii)localgovernmentequitythroughlandandothercontributions;(iii)beneficiaryequityasmonthlyorweeklypaymentbythehouseholdsandtheir“sweat-equity;”(iv)directprivatesectorinvestments;(v)donationsandsubsidiesfromNGOs;(vi)loansandgrantsfrominternationaldonors;(vii)crosssubsidiesfromtheretailincomederivedfromtheproposedcommercialdevelopmentschemes;(viii)loansandgrantsfrominternationaldonors.

Household Contribution.ItisestimatedthathouseholdsrentinghousesintheMetroManilaslumsarepayingPhp500-2,000onamonthlybasis.Thiswillingnessandabilitytopayofthehouseholdsshouldberecognizedandincorporatedintoasustainablefinancingstrategy.Theabilitytopaycouldbedesignedtoincludeoverseasremittancesinadditiontowages.Thosecouldstrategicallybeusedtoimprovetheborrowingcapacityofasignificantnumberofhouseholds.Itisalsoessentialtokeepinmindthat,whilerepaymenttogovernmententitieshashadverylimitedsuccessrepaymentsforhousinginvolvingHabitatforHumanityandotherNGOshaveperformedwell.Thereforetheeffectivenessoftherepaymentofmortgagesisprobablyaffectedmorebyinstitutionaldesignratherthannecessarilybyabilitytopay.

Targeted Housing Subsidies. Targetedhousingsubsidiesshouldbeprovidedtoensurereconstructiontakesplaceandisfinanciallyviable.Itisestimatedthathousingsubsidieswouldvarybetween30-60percentofthevalueofthehousing.HousingsubsidiesmaycomefromdiversesourcesincludingthenationalandlocalgovernmentsaswellascharitableorganizationsandNGOs.Theminimumproposed housing subsidy could be equivalent to the per-household investment currently being allocatedbyNHA.Thetargetedsubsidiesshouldbeintheformofcapitalsubsidies,notinterestratesubsidies,tominimizedistortionsinthehousingfinancemarketandsoasnottocrowdouttheparticipationofpublicandprivatefinancialinstitutions.

Retail business rents.Totheextentpossiblethemidrisehousingwillbemixeduseandwillencouragecommercialandlightindustrytobebasedinthegroundfloorunitsfacingopenaccessstreets.Averagerentalcostsfora27sqmarearangefromPhp4,000–8,000permonth.Therentsareexpectedtofinancepartofthetotalbuildingcostdependingonlocationandfeasibilityoftheuseofcommercialspace.Itisalsopossiblethatthetenantsofthebuildingwillchoosetocollectivelyrentcommercialspacetoestablishtheirretailandserviceestablishments.


Private Sector Investment.Undersomecircumstances,itmaybepossiblefordevelopmentofhousingtotakeplacethroughviablepublic-privatepartnerships(PPPs)aswellasotherdirectinvestments38.Thiswouldenablewin-winarrangementswherethepoorcanrelocatewhileenablingtheprivatesectortodeveloplandownedbythenationalorlocalgovernment,thuscoveringthecostsofsignificantimprovementtothehousingandlivelihoodofthepoor.

Loans and grants from international donors.Thereareexistingdonor-fundedprogramsforpro-poorandlow-incomehousinginthePhilippinesthatcanbetappedtosupplementlocalresourcesforthereconstructionprogram.Inaddition,itispossibletodevelopnewprogramstoaddressthespecificreconstructionneeds.

It is evident that the economic damage and losses cannot be included directly into an implementable needsanalysis.Itisthereforenecessarytodefineafinancialplanwhichfocuseson:(i)technicalassistance;(ii)capacitybuilding;(iii)housingrepair/riskreduction;(iv)shelterandtransitionalhousing;(v)housingreconstruction;and(vi)housingforfamilieslivinginareaofinfluenceofwaterhazards.ThetotalfinancingneedsarePhp75.7billionforthePDNAperiod(andPhp17.0billionforanadditionaltwoyears,foratotalofPhp92.8billion);thebreakdownispresentedinTable22.

Technical assistance is required to enable the government to develop and implement a housing reconstructionstrategyinthecontextofafunctionalslumupgradingandhousingpolicy.Thiswillrequireestablishingtheknowledgeandinformationtoscaleuplow-incomehousingprograms.Paralleltothetechnicalassistanceitisnecessarytoensurecapacityisestablishedwithinthenationalandlocalgovernments,aswellasspecializedagenciesandNGOstodesignandmanageurbanupgradingprogramsofthemagnituderequiredforreconstruction.

Housingrepairandriskreductionmeasuresareimportantandneedtobeundertakentoensuresafehousing.Whileitisdifficulttoenvisionviableimplantationofsuchaprogramtheneedsassessmentrecognizesthefinancialrequirementtomakeitpossible.

Anareawhichrequiresmoreworkbyallstakeholdersistherecognitionofaviableprogramoftemporary/transitionalhousing.Thelargenumbersoffamilieswholosttheirhousesarebeingabsorbedintothealreadycrowdedhousingstock.Theneedsassessmentincludesresourcesforamodestprogramtoenablefamiliestoavoidunsafehousingconditionsthroughtransitionalhousing.ThetransitionalhousingprogramwouldallocatePhp40perpersonperdayuntilapermanenthousingsolutionisprovided.Itisestimatedthatone-thirdofthedisplacedfamilieswouldbeplacedinpermanenthousingeveryyear,enablingthetransitionalhousingprogramtoconcludeinthreeyears.Thefamilieslivinginwaterhazardareaswouldnotgothroughtransitionalhousingandareexpectedtobeprovidedpermanenthousingwithinfiveyears.

38 RepublicAct(RA)7279ortheUrbanDevelopmentandHousingAct(UDHA)exemptstheprivatesectorfrompayingtaxesonsocializedhousingprojects.Thisistoencouragetheprivatesectortoparticipateindevelopingsocializedhousingsitesbymakingitaviableprojectfortheprivatesector.


Recovery Framework: Housing

Outcomes Baseline Priority Activities toDecember 2010

Priority Activities toDecember 2012

Establish a post disaster shelter and transitional housing program

As outlined in sector report.

Designinformationsystemtoenabletrackingofpostdisasterdisplacedfamilies;providesupporttoexistingshelter initiatives to enable them to handover to a transitional housing program;instituteandinitiateaprogramoftransitionalhousing

Main output is a transitional housingsystem,incooperationwithinternational agencies

Financing needs: Php 4.2 billion

Transitional housing system be in place and begin to contractasfamiliesareableto be placed in permanent housingunits.


Undertake Post Ondoy and Pepeng housing reconstruction initiative


OnehundredpercentoflandplotsrequiredforresettlementInMetroManila and outside Metro Manila identifiedandsurveyed;RiskSensitiveLanduseplanwithimplementationguidelinesprepared;Resettlementplanpresentedandagreed;25percentoflandarearequiredwithlegalagreementtoproceedwithclearingandconstruction;Newpilotmidrise housing solutions completed inatleast5MetroManilaaffectedLGUs;Traditionalnewhorizontalresponsecompletedinatleast10LGUsoutsideMetroManila;repairsto30percentofdamagedhousesinMetroManilaand40percentoutsideMetroManila;LandPlotsforRelocationidentifiedandattaininglegalclearancetoproceed;NationalSlumUpgradingStrategycompleted;Surveyofinformalsettlementsentered into live data base completed.


EightyfivepercentofnewhousingsolutionsinaffectedMunicipalitiescompletedandoccupied;90percentofdamagedhousesreconstructedandrepaired.


Establish a housing repair risk reduction program


Design and establish a national programofpostdisasterrepairandriskreduction.


Implementationofprogramincludingawarenesscampaign





Program on sustainable housing forfamilieslivinginwaterhazardareas


Surveyofinformalsettlementsentered into live data base completed.

Resettlement plan presented and reachconsensus–35%oflandplotsrequiredforresettlementforhousesin danger areas

ConstructionofHousingsolutionforatleast5000families


Resettlement plan presented andreachconsensus–60%oflandplotsrequiredforresettlementforhousesindanger areas

ConstructionofHousingsolutionforatleast15,000additionalfamilies


Establish the capacity to design and implement large scale urban reconstruction and upgrading programs


Design/adaptationanddeliveryofcourses in urban management, land useplanning,slumupgrading,etc.

Financing needs: Php 200 million

Design/adaptationanddeliveryofcoursesinurbanmanagement, land use planning, slum upgrading, etc.


Establish the knowledge,informationandpolicyframeworkforsuccessfulurbanupgrading


PreparationanddeliveryofTAtoproduceandestablish:housingreconstructionsectorstrategy;nationalslumupgradingstrategy;transportcorridorandinformalsettlementsstudy;informalsettlementgeographicinformationsystem;housingsectorPDNApreparationsystem;climatechangeadaptationprogramforurbanareas;inventoryoflandsuitableforrelocation;nationaldatabaseonslums;nationalprogramtoproduceCLUP at municipal level

Financing needs: Php 130.7 million

Final preparation and implementationofpolicesandcompletionofsystems:housing reconstruction sectorstrategy;nationalslumupgradingstrategy;transport corridor and informalsettlementsstudy;informalsettlementgeographicinformationsystem;housingsectorPDNApreparationsystem;climatechange adaptation program forurbanareas;inventoryoflandsuitableforrelocation;nationaldatabaseonslums;national program to produce CLUP at municipal level


Total financing needs

Php 25.4 billion Php 50.3 billion


Education SectorSummary

Overamillionschoolchildrenand21,000daycareworkersandteachershavebeenaffectedordisplacedbytyphoonsOndoyandPepeng.Atotalof3,417schools,36collegesanduniversities,andabout2,800daycarecenterswereaffectedordamaged.Theaffectedordisplacedchildrensufferedeither(i)disruptionsintheirschooling,(especiallythosewhoweremovedtoevacuationcentersorwhoseschoolsweretransformedintoevacuationcenters);or(ii)wererelocatedand,alongwithchildrenintheirhostschools,weremadetogothroughmultipleshiftsthuscuttingdowntheirtimeontaskforlearning.Manyoftheschoolchildrenandteacherslosttheirschoolsuppliesandtextbooks.Childrenagedbetween3to5yearsofagewerealsoaffected.Theirkeydutybearers,thelocalgovernmentunitsandlocalsocialworkerswereabsorbedinrespondingtoaffectedfamiliesandtourgentreliefoperations.Effortsshouldbemadetorestoreeducationfortheaffected/displacedchildrenbecauseitisbothlife-savingandlife-sustainingandgivesthechildrenasenseofnormalcy,stabilityandstructure.

TotaldamagesandlossesintheeducationsectorareestimatedatPhp2.7billion.TotaldamageisvaluedatPhp2.5billionandincludesthefollowingassets:(i)schoolbuildingsandfurniture;(ii)computerandequipment,and(iii)educationalmaterials.Thepublicsectorshareoftheoveralldamageisapproximatelytentimeshigherthantheprivateshare.EstimatedlossestotaledPhp230millionandincludethefollowingcosts:(i)demolitionandrubbleremovaland(ii)repairingtheschoolsthatwereusedastemporarysheltersafterOndoyandPepeng.Theproportionofpublictoprivateisfourtooneinthecaseofthelosses.

ThetotalrecoveryandreconstructionneedsareestimatedatPhp3.5billion,ofwhichPhp417millionarerequiredforrecoveryandPhp3.1billionforreconstruction.OfthetotalPhp3.5billionfinancingneedsforbothrecoveryandreconstruction,Php2.8billionwillbesourcedfromthepublicsectorandPhp695millionfromtheprivatesector.

Thepolicyagendaforthissectoristogivetopprioritytotheimmediaterepairandrehabilitationofdamagedlearningfacilities.Inaddition,resilienceshouldbebuiltintorepairandreconstructionactivitiesinordertoensurecontinuityofeducationindisastersituations.Inthelongrun,thereisaneedtostrengthenthecapacityofthepartnersofgovernmenttoadvocatefortheintegrationofdisaster-riskreductionaswellasitsintegrationintheregulareducationprograms.

Background

Themajorityofthedisaster-affectedareas,suchasNCR,RegionIV-A,RegionIII,andRegionV,aremajoreducationalcentersinthePhilippineswithahighconcentrationofelementary,secondary,andhighereducationalinstitutions.

CombinedNCR,RegionIII,RegionIV-A,andRegionVaccountfor39percent,41percent,and48percentofthetotalelementary,secondaryandtertiaryenrollment,respectively.Twomainreasonsexplainthehighenrolmentrateinsomeofthedisaster-affectedareassuchasRegionI,RegionIII,RegionIV-A,andRegionIV-B:(i)thequalityofeducation,reflectedinabove-averagescores

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innationalexaminationsfortheelementaryandsecondarylevel;and(ii)unproblematicphysicalaccesstoschools.Theseareasalsoreceiveoverhalfofthetotaleducationalmaterialsdistributedtoelementaryschoolpupils.

Fortysixpercentofelementaryschools,49percentofsecondaryschools,and61percentoftertiaryeducationalinstitutionsarelocatedinthedisasteraffectedareas.Fiftytwopercentoftotalelementaryteachersand57percentoftotalsecondaryteachersareassignedtotheseareas.Thedistributionofenrollment,schoolsandteachersintheaffectedareasdisaggregatedbylevelofeducation(elementary,secondaryandtertiary)ispresentedinTable29.

Table 29: Percentage Share of Disaster-Affected Areas in National Statistics, by Type of Facility

Level Enrollment Schools Teacher

Elementary 53 47 52

Secondary 44 49 57

Tertiary 62 61 —

Thepublicsectorplaysadominantroleinthedeliveryofbasiceducationalserviceswhiletheprivatesectorplaysacentralroleinhighereducation(seeTable30).

Table 30: Public-Private Distribution of Enrollment and Schools in Disaster-Affected Areas

Level

Enrollment (percent)

Schools/ Institutions (percent)


Elementary 92 8 89 11

Secondary 80 20 60 40

Tertiary 34 66 38 62

Immediate and Ongoing Recovery Efforts

AfterOndoyandPepeng,theDepartmentofEducation(DepEd)identifiedthelocationofdamagedschools;assessedthestatusofthefacilities;startedtoplanfortherelocationofschoolssituatedindisaster-proneareas;andinitiatedtoimplementqualityimprovementstodamagedschoolsthatcannotberelocated.

Prioritywasalsogiventominimizingthelengthofschoolinterruptionandtoimplementingalternativelearningmodalitiesforchildren.AlthoughDepEdstartedtodistribute467,676sparebooks,morethan11milliontextbooksweredamagedorlost.Difficultieswerealsoexperiencedinreplacingdamagedfurniture,equipmentandcomputers.

Governmentagencies,internationaldonor,charitableorganizations,andNGOsimmediatelyrespondedbyprovidingeducationalpackagestoaffecteddaycarecenters;schoolsuppliestoprimaryandsecondaryschool-agedchildren,teachers’packs,librarybooks,andrecreationalmaterialsandbyfinancingthecleanupoffloodedfacilities.Privatebusinessesalsodonatedfood,water,books,blanketsandsomeconstructionmaterialstodisaster-affectedschools.


Damage and Losses Assessment

OndoyandPepengcumulativelyaffectedatotalof3,417elementaryandsecondaryschools;36collegesanduniversities,over2,800daycarecenters,884,626schoolchildrenand21,000daycareworkersandteachers.Mostoftheschoolswerepartiallydamaged,withdamagesaffectingmostlyclassrooms.Othertypesofdamagesinclude:(i)booksandotherinstructionalmaterials;(ii)schoolsuppliesofchildrenandteachers;(iv)equipmentandcomputers;(v)cloggedrestrooms;(vi)damagedroofs,ceilings,andgutters;(vii)brokenglasses,collapsedbuildingfoundations,anddamagedfurniture.

TotalestimateddamageandlossestotaledPhp2.7billionofwhichtheoveralldamageisvaluedatPhp2.5billion.DamageandlossespertainingtothepublicsectorareestimatedatPhp2.2billion.TheremainingPhp600millionrepresentsthetotaldamageandlossincurredbytheprivatesector.Sincethebulkofthedamagedfacilitiesareelementaryandsecondaryschools,thecentralgovernment’sshareofthetotaldamageisalmostequaltothewholeamount.ThecostofdamagedschoolsisPhp1.3billion;furnitureaccountsforPhp56million;equipmentforPhp59million,textbooksforPhp739million;andcomputersforPhp53million.

TheestimatedlossestotaledPhp230million,ofwhichPhp180millionpertainstothepublicsector,andtheremainingPhp50milliontotheprivatesector.Asinthecaseofdamageestimate,thelossisfullybornebythecentralgovernment.Thelocalgovernments’shareisnegligible.(Tables31and32).

Table 31: Summary of Damage and Losses in the Education Sector (in Php million)

School Type

Damage Losses

Public Private Total Public Private Total

Elementary 1,620.9 200.3 1,821.2 147.7 18.3 166.0

Secondary 228.0 152.0 380.0 20.8 13.8 34.6

Tertiary 120.8 193.7 314.5 11.1 17.9 29.0

Total 1,969.7 546.0 2,515.7 179.6 49.9 229.5

Table 32: Summary of Damage and Losses Estimates in the Education Sector, by Region (in Php million)

Region Damage Losses Total

CAR 268.9 104.0 372.9

Ilocos 673.9 14.0 688.0

Cagayan Valley 211.7 46.0 257.7

Region III 374.9 57.8 432.7

NCR 423.2 1.0 424.1

Region IV-A 446.3 5.1 451.4

RegionIV-B 4.2 0.4 4.6

Bicol 112.6 1.2 113.7

Total 2,515.7 229.5 2,745.2


Theestimatedlossesexperiencedintheeducationsectoraremainlyattributedtothecostofdemolitionandrubbleremovalaswellasrepairingtheschoolsusedastemporaryshelters.Ontheotherhand,thecostofrecruitingandtrainingsubstituteortemporaryteachers,thecostofcleaningfloodedschoolfacilities,andthecostofrentingtemporaryschoolfacilitiesarenegligible.Thecleaningtaskswereassumedbyadministrators,teachers,parents,andcommunityvolunteers.


TotalrecoverycostisestimatedatPhp417millionandtotalreconstructioncostatPhp3.1billion.Thus,thetotalrecoveryandreconstructioncostareestimatedatPhp3.5billion.Thebulkofit,Php2.8billion,isforrecoveryandreconstructionofelementaryeducation.

Table 33: Summary of Needs in the Education Sector (in Php million)

School TypeRecovery Reconstruction Total

Short-Term

Medium-Term

Short-Term

Medium-Term

Short- Term

Medium-Term

Elementary 319.1 0.27 971.2 1472.2 1,290.3 1,472.5

Secondary 66.7 0.06 202.5 307.2 269.2 307.3

Tertiary 31 0.01 42.7 64.3 73.7 64.3

Total 416.8 0.34 1216.4 1843.7 1,633.2 1,844.1

Thereisanimmediateneedtorepairandrehabilitatedamagedlearningfacilities.Themainactivitiesshouldfocuson:(i)immediatecleaning,repair,andrehabilitationofdamagedschools,earlychildcaredevelopment(ECCD)centers,andcollegeanduniversityfacilities;(ii)replacementofdamagedinstructionalmaterials,equipmentandlostschoolsupplies;(iii)repairandrehabilitationofdamagedwaterandsanitationfacilities;(iv)reviewofconstructionstandardsanddevelopmentofrelocationguidelines;and(v)assessmentofpre-schools,elementaryandhighschoolsinhighriskareas;and(vi)planningforlong-termsolutions,includingrelocation.Theseactivitiesmaycontinueintothemedium-term.

Resilienceshouldbebuiltintorecoveryandreconstructionactivitiesinordertoensurecontinuityofeducationindisastersituation.Toachievethisoutcome,short-termactivitiesestimatedatPhp297millionshouldentail:(i)creationofalternative/temporarylearningspacesforaffected/displacedchildren;(ii)provisionofalternativedeliverymodesoralternativelearningsystems;and(iii)provisionofECCDpackages.Psychosocialandhealthservicesforchildrenandteachersshouldbeintegratedintheeducationalresponsethroughtheprovisionofpsychosocialcareandcounselingandthetrainingofschoolofficials;theseactivitiesareestimatedatPhp17million.


Asafeandsecurelearningenvironmentshouldbeputintoplacetopromotetheprotectionandwell-beingofstudents.Intheshortrunpriorityshouldbegivento:(i)engagingstudentsinemergencyandtransitioneducationalactivitiesthatpromotedisasterpreparedness,riskreduction,healthandhygieneprotection;and(ii)deliveringdisasterpreparednesstrainingforcollegestudentsandschoolofficials.TheestimatedcostisPhp49.8million.Inthemediumterm,thetrainingofteachersanddaycareworkersondisasterriskreductionandminimumstandardsforeducationinemergencyshouldbepursuedwithafocusondaycarecentersandschoolslocatedindisaster-proneareas.

Table 34: Ownership Structure: Education Sector (in Php million)

School TypeRecovery Reconstruction


Elementary 262.2 65.6 1954.7 488.7

Secondary 54.7 13.7 407.8 101.9

Tertiary 16.7 4.2 85.6 21.4

Total 333.7 83.5 2448.1 612.0

Totaldamageisheavilyaccountedforbypublicassets,mostparticularlypublicelementaryandhighschoolbuildings.Totallosseslikewisefollowthesamepattern.RegionIaccountsforarelativelyhigherproportionoftotaldamage,whiletheCARaccountsforarelativelyhighproportionoftotallosses.Thepublicproportionofreconstructionfinancingneedsisfourtimeshigherthanprivatefinancingneeds.Therecoveryfinancingneedswillbeheavilysourcedfromtheprivatesector.


WithinthecurrentinstitutionalframeworktheDepEdtakesresponsibilityforcleaning,repair,rehabilitatingandrelocatingelementaryandhighschools.TheCommissiononHigherEducation(CHED)playsanimportantroleincoordinatingsimilareffortsaffectinghighereducationalinstitutions.

Donoragencies,theprivatesector,andNGOscansupportthegovernment,throughDepEd,in:(i)providingcontinuouseducationduringandpost-disastersituations;(ii)extendingpsychosocialandhealthservicestochildrenandteachers;(iii)providingasafeandsecurelearningenvironmentthatpromotestheprotectionandwell-beingofstudents;andiv)providingtechnicalassistanceinenhancingcapacityofgovernmentpartnersondisasterpreparednessanddisasterriskreduction.


Recovery Framework - Education

Outcomes Baseline Priority Activities to December 2010Priority Activities to

December 2012

Reconstruction:Repair and rehabilitation ofdamagedlearning facilities,materials and equipment.

Total damage and lossesoftyphoons“Ondoy”and“Pepeng”arevaluedatPhp2.7billion.TheDepartmentofEducation reports that3,417schoolsweredamaged(2,914elementaryand503highschools)whichincludesthelossofinstructionalmaterials, school equipment, and computers.Thirtysix(36)collegesanduniversitieswerealsoadverselyaffected.Approximately2,800day care centers have alsobeenaffectedordamaged.

Priority Activities• Immediatecleaning,repair,and

rehabilitationofdamagedschools,colleges,universities,andECCDfacilities.

• Replacementofinstructionalmaterials,damaged computers and other equipment.

• Repairandrehabilitationofdamagedwaterandsanitationfacilities.

• Reviewofconstructionstandardsanddevelopmentofrelocationguidelines

Assessmentofpre-,elementary,andhighschools in high risk areas and suggest long-termsolutions,includingrelocation.Outputs/Indicators• Constructionstandardsmanual• Relocationguidelines• Rehabilitationandrepairof2,950

schools, ECCD centers, colleges and universities

• Instructionalmaterialandequipmentreplaced

• Rehabilitationandrepairofatleast1,500damagedwaterandsanitationfacilities.


Priority activities continuing Financing needs: Php 1.8 billion

Recovery:Replacement ofdamagedlearning and instructional materials

Approximately2,800day care centers, 140,322preschoolchildren,2,914elementaryand503high school libraries wereaffected.

PriorityActivities:• Deliveryoflibrarymaterialsforatleast

40percentofaffectedschools.• ProvisionofECCDpackagesforatleast

40percentofthedaycarecenters.Outputs/Indicators:• DeliveryofECCDpackagesto1,123day

care centers• Deliveryof100-BookLibraryto2,914

elementary schools• Deliveryof100-BookLibraryto503high

schools Financing needs: Php 53.3 million

Continuityofeducation even during disaster situation.

Ninetyeight(98)schoolswerebeingused as evacuation centers.Overamillion pre-schoolers and schoolchildren and25,000daycareworkersandteachershave been displaced bytyphoons“Ondoy”and“Pepeng”andsubsequentflooding.

Priority Activities Respondtotheneedsofc.560,000•affectedschoolchildrenandover14,000daycareworkersandteachers.Alternative/temporarylearning•spacesestablishedforaffected/displaced children Provisionofalternativedelivery•modes/alternativelearningsystemProvisionofECCDandteachers’•packs.

Outputs/IndicatorsConstructionofatleast300•alternative/temporarylearningspaces.Deliveryof75ECCDpackagesand•225100Bk-librarysetsDeliveryofstudents’packsto•c.430,000elementaryandhighschoolpupils.Deliveryof13,200teachers’packs.•Provisionofalternativedelivery•mode modules to at least 5 percent ofaffectedelementaryandhighschoolchildren.



Outcomes Baseline Priority Activities to December 2010Priority Activities to

December 2012

Psychosocial and health servicesforchildren and teachers integrated in the educational response.

Continuing education during disaster situation is a priority forthissector.Thetrainingof28,906affectedteachersanddaycareworkersin psychosocial care and counseling is a priorityconcern.

Priority Activities Provisionofpsychologicalcareto•targetedstudents.

Outputs/IndicatorsDeliveryofpsychosocialcareto•atleast40percentoftargetedstudents Trainingofc.3,400daycare•workersandteachersonbasicpsychosocialcare.

Financing Needs: Php 17.1 million

Safeandsecure learning environment that promotes the protection andwell-beingoflearners

Clean,safe,andsecure learning environment is highlighted by the destructionofwaterand sanitation facilitiesinschoolsandlearningcenters.

Priority Activities Engage students, administrators, •teachers, and parents in emergency education and transition educational Disasterpreparednesstrainingfor•colleges and universities, PTAs, and NGOs.

MainOutputs/MeasurableIndicatorsTrainingofc.3,400teachers/•daycareworkersontransitionaleducational activities, disaster risk reduction and minimum standards oneducationinemergencies.Trainingof64,000collegestudents•ondisasterpreparedness.


Trainingof•about5,000trainersforteachers and day care workersondisaster and disaster risk reduction and minimum standardsforeducation in emergency

Financing Needs: Php 0.3 billion

TOTAL Php 1.6 billion Php 1.8 billion


Cultural HeritageThetropicalstormOndoyandtyphoonPepengaffectedanumberofculturalheritageassets,suchas thea tres, museums, historical churches, shrines, archaeological sites, cultural landscapes, and historiclandmarks.Thepotentialofculturalheritageassetsasbothelementsandtoolsforlocalsocio-economicdevelopmenthasbeenwidelydemonstrated.Theirroleinreducingpovertyandsupportingeconomicgrowthoflocalcommunitieshasbeenintegratedinthedevelopmentagenda.

Assessing damage and losses to cul tural heritageassetsisasite-specificexercise.Theirvarietyrequiressite-by-siteassessmentsandaunitcostapproachcannotbeeasilyapplied.Therefore,toestimatetheirdamage,losses,andneeds,thePDNAteamdidsubstantialeffortstoestablishaclosecollaborationwiththegovernmentagenciessincetheveryearlystagesoftheprocess.39 More than 100siteswereconsidered,anddamagewasreportedfrom45ofthem(Table35).Theestimationoflossestookintoaccounttheincomelossfromtickets anddonations(religioussitesearnmostoftheirfundsthroughdonationsgatheredduringweddings,whicharelikelytodropforatleastoneyear).Theimpactontheexternalsectorwasassessedthroughprojectedincreaseinimportsforrestorationworksneeded,whereastheprojectedimpactonthefiscalbudgetfeaturedreductioninfiscalflowduetotheunavailabilityoftheseassetsuntiltheircompleterestoration.

Table 35: Damage, Losses, Impact on the External Sector and Fiscal Budget for Cultural Heritage

Damage Losses Total External Sector

Fiscal Budget Region Public Private Public Private Public Private

Total 279,810,912 - 25,567,260 - 305,378,172 - 4,582,095 3,950,985

I 33,381,442 - 3,050,174 - 36,431,616 - 546,644 471,353

CAR 8,394,327 - 767,018 - 9,161,345 - 137,463 118,530

II 19,586,764 - 1,789,708 - 21,376,472 - 320,747 276,569

III 2,798,109 - 255,673 - 3,053,782 - 45,821 39,510

NCR 61,558,401 - 5,624,797 - 67,183,198 - 1,008,061 869,217

IV-A 153,896,002 - 14,061,993 - 167,957,995 - 2,520,152 2,173,042

V 55,962 - 5,113 - 61,076 - 916 790

XII 139,905 - 12,784 - 152,689 - 2,291 1,975

39 InvolvedlocalauthoritiesincludedtheProtectedAreasandWildlifeBureauoftheDepartmentofEnvironmentandnaturalResources,NationalCommissionforCultureandtheArts,PhilippinesChapteroftheInternationalCouncilonMonumentsandSites,DepartmentofTourism,IntramurosAdministration,andlocalUniversities.Adhoctrainingwascarriedout;afterward,thevariousagenciescollecteddatathroughtheirchannelsandperipheraloffices.InitiallytheanalysisfocusedontheassetsofinternationalsignificanceinscribedontheUNESCOWorldHeritageListanditsTentativeList,andafterthatitwasexpandedtocomprisesitesofnationalandlocalsignificance.


The needs for recovery and reconstruction (Table36)comprisedtheestimationofimmediateneeds(suchasemergencyrescue,temporarystorageofartifactsinalternativelocations,andtemporarysiteroofing).ItalsoincludedtheneedstoensureacompleterestorationoftheassetsaffectedbyOndoyandPepeng,reducetheirvulnerabilitythroughretrofittingmeasuresandbetterpreparedness(planstomovetheartifactstosaferlocationsincaseoffloodwarning).Giventhecurrentcapacityofthelocalgovernment,itisreasonabletoestimatethatcompletereconstructionwillrequireatleastthreeyears,economicresourcesbeingavailable.

Table 36: Needs for Recovery and Reconstruction for Cultural Heritage (Php)

Recovery Reconstruction Total Region Short term Medium term Short term Medium term Short term Medium termTotal 15,340,356 14,061,993 167,886,547 153,896,002 183,226,903 167,957,995

I 1,830,104 1,677,596 20,028,865 18,359,793 21,858,970 20,037,389CAR 460,211 421,860 5,036,596 4,616,880 5,496,807 5,038,740

II 1,073,825 984,340 11,752,058 10,772,720 12,825,883 11,757,060III 153,404 140,620 1,678,865 1,538,960 1,832,269 1,679,580

NCR 3,374,878 3,093,638 36,935,040 33,857,120 40,309,919 36,950,759IV-A 8,437,196 7,734,096 92,337,601 84,642,801 100,774,797 92,376,897

V 3,068 2,812 33,577 30,779 36,645 33,592XII 7,670 7,031 83,943 76,948 91,613 83,979


Table 37: Number and Type of Ownership of Health Facilities in

the Affected Areas

Region Government Private I 40 78II 39 53III 61 152IV-A 67 206CAR 37 20NCR 53 189Total 297 698Source:BureauofHealthFacilitiesServices,PhilippineDepartmentofHealth.ListofLicensedGovernmentandPrivateHospitalsandOtherHealthFacilitiesasofDecember31,2007.

HealthSummary

TyphoonsOndoyandPepenghadsignificanteffectsonthehealthofthepopulationlivinginthemostaffectedareas:RegionsI,II,III,IV-A,CARandNCR(Table37).Theimmediatehealth-relatedconcernsfocusedon:(i)thetreatmentofinjuriescausedbythestorm;(ii)theprovisionofcontinuousbasichealthservices;(iii)thepreventionandtreatmentofdiseaseoutbreaks;and(iv)managementofshortandlonger-termpsychologicaleffectsamongtheaffectedpopulations.Anequallycriticalpriorityisrestoringthehealthsystemthatwasdamagedtobeabletocontinuetheprovisionofhealthservices.

TheestimatedtotaldamageandlosswroughtbythestormsamountstoatleastPhp5.8billion,ofwhichthepublicandprivatesectorsharestotalPhp2.15billionandPhp3.66billion,respectively.Withinthepublicsector,damagestonationalgovernmentownedfacilitiesamountedatPhp1.16billion;whilePhp0.54billionarerelatedtolocalgovernment-ownedhealthfacilities.TheNCR,followedbytheRegionIaccountedformostofthedamagetobothtypesofpublicfacilities.LossesareestimatedtobePhp860millionforboththeprivateandpublicsectors.(Table38)

Table 38: Damage and Losses in the Health Sector, by Regional Distribution

and by Type of Ownership (in Php million)

Damage Loss

PublicPrivate Public Private

National Local

CHD I 359.10 180.19 1,021.36 - -

CHD II 52.94 * 100.27 - -

CHD III 3.03 37.04 75.89 - -

CHD IV-A * 36.75 69.60 441.03 418.62

CAR * 27.32 51.74 - -

NCR 751.84 265.03 1,925.85 - -

Total 1,166.91 546.33 3,244.71 441.03 418.62

Source:PhilippineDepartmentofHealth,PhilippineHealthInsuranceCorporation,Localgovernmentunitreports*-Nofiguresreported

Restorationofthehealthsystemwouldstartwiththereconstructionoffacilitiesthatsustainedthemostdamageandlossesintermsofinfrastructureandequipment.Facilitieswereprioritizedaccordingtotheir:(i)capacitytoresumeregularservices;(ii)levelandextentofserviceprovided;and(iii)scaleofservicesprovidedtothegeneralpopulationandcatchmentareastheyserve.The

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estimatedfinancingneedsforrecoveryandreconstructionofpublicsectorfacilitiesisestimatedatPhp2billion.Althoughprivatesectorneedscannotbedetermined,preciselytheyhavebeenestimatedonthebasisofpublicsectordataatPhp3.17million.TheGovernmentisencouragedtodevelopapolicytoimplementstandardbuildingcodes,highlightingminimumcriteriaforbothpublicandprivatehealthfacilitieslocatedinhazard-pronegeographicalareas,aswellasaddresscrucialhealthrequirementsinexistingdisasterplans.

Background

ThePhilippinepublichealthcaresystemwashighlycentralized,withtheDepartmentofHealth(DOH)havingsoleownershipandresponsibilityforallhealthfacilities,personnelandprogramsinthecountry.Intheearly1990s,theapprovaloftheLocalGovernmentCode(LGC)of1991(ortheDevolutionLaw)grantedlocalgovernmentunits(LGUs)administrativeautonomyfromthenationalorcentralgovernment.WhileLGUsbecameindependentimplementersofallhealthprograms,DOHretaineditsoversightof,andtookprimaryresponsibilityfor,priorityhealthprogramsthathadnationalimpacts,suchastheExpandedProgramonImmunization(EPI),theDirectly-ObservedTreatmentShortCourseforTuberculosis(TB-DOTS)andtheprevention,treatmentandcontrolofotherendemicdiseaseslikeHansen’sDisease,Malaria,Schistosomiasis,Filariasis,etc.Insodoing,DOHtooktheresponsibilityofprovidingforalltheessentiallogisticalandtechnicalrequirementstoruntheseprograms.Indisaster-settings,theDOHisresponsibleforsubsidizingemergencyhealthprogramswhicharerelatedtotheabove-mentioneddiseasesandareheavyinlogistics.

Thenationalgovernmentoperatestertiary(medicalcenters)andspecialtyhospitals(heart,lungandkidney)throughoutthecountry.Provincesusuallyownandoperatetertiaryand/orsecondarylevelhospitalfacilities(i.e.provincialanddistricthospitals)whilemunicipalitiesorcitiesoperatetheirownhealthfacilities(mostlycommunityhospitals,andruralhealthunits(RHUs)).Barangaysareresponsibleforhealthstations(BHSs),althoughsomeofthelargercitiesalsooperatesecondaryortertiarylevelhospitals.Intheprivatesector,therearecounterparthospitalandhealthfacilitiesthatarebeingrunasprivateenterprisesbycorporationsorindividuals.Theirrevenuederivesprimarilyfrompatientfees,directlyorthroughinsuranceschemessuchasPhilHealth.

Immediate Response

Healthfacilitieswereseverelyaffectedbytheheavyrainsandthesubsequentflooding.Infrastructurebecameinaccessibleduetosubmersionorisolation;equipmentandmedicalsuppliesweredamagedorrendereduseless;andhealthservicesseverelydisrupted.

Immediatereliefoperationsconcentratedonensuringthesafetyofhealthpersonnelandpatientsinaffectedfacilitiesandareaseitherthroughrescue,transfertootherfacilitiesand/ortheprovisionofessentialsuppliesoffood,water,clothingandmedicalsupplies.Watertestingwasundertakeninstrategicsites,includingevacuationcenters,whilewaterdisinfectantwasdistributedtotheevacueesandtetanustoxoidinjectionsweregiventoallthosewhosufferedinjuries.

Thereliefeffortalsoconcentratedonensuringthatdisplacedpeopleinandoutoftheevacuationcenterswereadequatelytreatedforacutediseasescauseddirectlyorindirectlybythetyphoonsaswellastocontinueservicetoregularpatients.Portabletoiletsweresetupintheevacuationcentersandwatersupplytrucksweredeployedtoaffectedareas.

The DOH sent out emergency and regular health teams that included medical, psychosocial, public health,nutritionandwater,sanitationandhygienestafftoallaffectedareasandevacuationcenterstoattendtotheneedsoftheevacuees.Volunteerdoctors,nursesandaideswerealsodeployedtogetherwiththehealthteams.HealthpromotioncampaignsviaTV,radio,newspapers,andtheinternetwerescaledupandhealtheducationmaterialsweredistributedintheevacuationsites.


Figure4showstheleadingcausesofmorbidityreportedintheaffectedareasduringthepost-disasterperiodascomparedtothenumberofcasesinthesameareasduringthesameperiodlastyear.Itisnotablethattherewasanincreaseinthenumberofleptospirosis,typhoidandinfluenzacases.Thisincreaseisduetothecongestionintheevacuationcenters,inhouseholdsandthelossofadequateshelterfortheevacuees.Leptospirosiscasesdramaticallyincreasedduetotheprolongedfloodinginsomeareasthatforcedpeopletoregularlytraversethroughinfectedfloodwaterstoresumetheirnormalactivities.Thusthosewithopenwoundsorbreaksintheirskinwhowadedinthefloodwatersbecamemoresusceptibletocontractingthedisease.

Figure 4 Comparative Incidence of the Leading Causes of Morbidity in the Affected Areas During the Post-Disaster Period from August to October with

the Same Period of the Previous Year.

Source:ReportscomingfromthedifferentDOHCentersforHealthDevelopmentinregionsI,II,II,IV-A,CARandNCRfromtheperiodSeptember27,2009toNovember11,2009.Nodatareportedforinfluenzaduringthesameperiodin2008.

Damage and Losses

Damage

TwentypercentoftotalhealthfacilitiesintheaffectedareassufferedpartialdisruptionordamageestimatedatPhp5.8billionwithanapproximate60-40splitbetweentheprivateandpublicsectors,respectively.Withinthepublicsector,mostofthedamageandlosseswereinthenationally-ownedhealthfacilities,asDOHtertiaryandspecialtyhospitalsaremainlyconcentratedinhighlyurbanizedareassuchasMetroManilawhichwashighlyaffectedbythedisaster.

Damagewasmainlycausedbyrainwaterandmud.Healthfacilitieswithbasementfloorssufferedmoredamagesincetheywerehostingdiagnosticfacilities,electricalclosets,powergenerators,laundryfacilities,andautoclaves.Mostofthepharmaciesthatwerelocatedonthefirstfloorweresimilarlyaffected.CATscans,laboratoryandradiologicequipmentwerealsodamagedordestroyedandtransportvehicleslikeambulancesandservicevehiclesweresubmergedinthefloodwaters.Somehospitalsandfrontlinehealthserviceunitssuchasruralhealthunitswereabletocontinueoperationsdespitetheflooding.However,ittookmorethanaweektoclearthewaterlevelbeforeresumingoperations.Thehardesthitfacilitiesarestillencounteringdifficultiesinresumingnormalservicedelivery.

Losses

Lossesincludedcostsincurredfor:thedirectprovisionofbasichealthservicestoaffectedpopulations,treatmentofinjuries,diseasesurveillanceintheaffectedareas,publichealthinformationcampaigns,environmentalhealthmeasures,vectorcontrol,transportofpatients,salaryofstaffassignedtothedifferenthealthandemergencyresponseteams,medicalequipmentandsupplies,revenuelosses,mediumtolong-termpsychologicalcare,andtreatmentofdifferentdiseases(i.e.acuterespiratoryillness,diarrhea,febrileillnesses,influenza-likeillness,pneumonia

12,00010,0008,0006,0004,0002,000 28

4134

148 698

9,129

1,126

0

4,922

11,485

7,435

Dengue

Lepto

spiro

sis

Typhoid

Influenz

a0

2008 2009AcuteW

.Diarrhea


andleptospirosis).Directcostswerealsoincurredforclearingoperations;tooperatefiretrucksandwatertankerdeploymentforhealthfacilitycleaning,haulingofwastematerials,drainingandflushingofwaterandwastewatersystems.Medicalrecordswereeithersoakedordamagedinwaterorbecameirretrievable.Hospitaladmissionandemergencyroomlogbookswereeitherlostorsoakedinwater.Recordsforreimbursementofmembers’claimsfromPhilHealthwerealsocompromisedinanumberofthehospitals.


ThetotalrecoveryandreconstructionneedsinthehealthsectoramounttoPhp5.2billion,thebulkofwhich(Php4.2billion)isforreconstructionrelatedactivities(seeTable39).

Table 39: Recovery and Reconstruction Needs in the Health Sector

Recovery Reconstruction

991.6million 4.2billion

Thehealthsectorpost-disasterrecoveryandreconstructionstrategyisfour-foldandentails:theresumptionofnormalservicedelivery;recoveryfromthenegativehealthimpacts;makingthehealthsectorbetterpreparedfordisasters,and;reconstructionofhealthfacilitiesthatweredamagedanddestroyedbythetyphoons.

Resumption of normal service delivery

Recoveryshouldfocusontheneedtoprovideshort-termhealthinterventionsthatwouldbringbackandensurecontinuousfunctioningofthehealthsystemtoprovidebasichealthservicesandpreventandmanagethehealthconsequencesofdisasters.Surveillancesystemsshouldbeinplaceduringandaftertheoccurrenceofdisasterstocloselymonitorthehealthsituationandpreventorprovidetimelyinformationfortheappropriateresponsetodiseaseoutbreaks.Publichealthinformationcampaignsshouldbeundertakentotimelycommunicateessentialhealth-risks.

Recovery from the negative health and nutrition impacts

Disaster-relatedhealthimpactsonthepopulationshouldbeminimizedbyprovidingcontinuoushealthservices.Focusshouldshiftfromgeneralemergencydistributionstotargetedservicesalignedwithspecificneedsofdifferentpopulationgroups.Particularattentionshouldbegiventoprovidereproductivehealthmedicinesandsuppliesforpregnantwomen,lactatingmothersandnewborns;supplementaryfeedingprogramsforchildrenunderfivewouldalsobenecessary40.Unfavorablelivingconditioninevacuationcenters,especiallypoorhygiene,coupledwithlackofdietarydiversitywillmostlikelyleadtoahigherincidenceofdisease.Specialattentionshouldbegiventothechronicallyillwhosepre-existingconditionsarefurtheraggravatedbythedisasters:inparticularthedisabledandtheelderly.TheworstaffectedareaintermsofvulnerabilitytohealthandnutritionislikelytobeLagunaRegion(RegionIV-A)duetothehighpopulationdensities.

Reconstruction of health facilities

Reconstructionwouldincludetheconstructionandrepairofalldamagedhealthfacilitiestobringthembacktotheleveloffunctionalitypriortothedisasters.TheGovernmenthasalreadydevelopedcriteriaforprioritizingthehealthfacilitiesforimmediatereconstruction.Thecriteriaare

40 Theseprogramsplayanimportantroleinminimizingtheriskofmalnutritionandindoingsoincreaseresiliencetodisease.


asfollows:(i)abilityofthehealthfacilitytoresumenormaloperationsafterthedisaster;(ii)levelandextentofhealthservicesbeingprovidedtothepublic;and(iii)extentofcatchmentpopulationandareabeingserved.Thus,forhospitals,DOHhasidentifiedthefollowingfacilitiesforpriorityinthereconstructionphase:AmangRodriguezMedicalCenter,MarikinaCity,MetroManila;RegionIMedicalCenter,DagupanCity,Pangasinan;TreatmentandRehabilitationCenter,TaguigCity,MetroManila;RogacianaMercadoDistrictHospital,Sta.Maria,Bulacan;PasigCityGeneralHospital,PasigCity,MetroManila.Thecostsofinfrastructureandequipmentdamagedbythetyphoonsinthesehospitalsweresomeofthehighestintheirareasandhospitalcategory.

Thegovernmentwasabletocost-outretrofittingexpensesfornationally-ownedhealthfacilities.Itwasrecognizedthatreconstructionshouldincludereplacementcostandthosecomponentsinthedesignthatwouldimprovethefacilities’abilitytowithstandandenduresimilardisastersinthefuture.Itwouldalsobebeneficialinthelongrunthatallhospitalsandmedicalfacilitiesfollowinternationalsafetystandards.Thiswouldmakehospitalsandmedicalfacilitiesmoreresilientnotonlyinminimizingtheeffectsofdisastersbutalsoinservingthehealthneedsofthepopulationwithinitsvicinity.

ThetotalreconstructionneedforthepublicsectorisapproximatelyPhp1.7billion.Itisestimatedthathealthfacilitiesalreadyprioritizedforreconstructionwouldcompriseabout30percentofallaffectedfacilitiesandwouldentailaninitialcostofapproximatelyPhp513.97million.

Therestofthehospitalsandruralhealthfacilitiesmustalsoberepairedtomakethemoperationalataminimumlevelandtoensurethedeliveryofbasichealthservices.Asanexample,inMarikinaCityalone,onlytwooutof16healthcenterswereoperationalafterthedisaster.Thereislikewiseaneedtosetthecriteriaforprioritizingthereconstructionofhealthcentersastheyprovidethefrontlinehealthservicestothepopulation.Approximately20percentoftherestofthehealthfacilitieswouldinitiallyrequireassistanceintheamountofPhp359.8million.Theshort-termreconstructionneedwouldrequireatleastPhp873.8million.

Thereconstructionneedsfortheprivatesectoraremoredifficulttoquantifysincethereisnoreadilyavailabledatatodeterminetheextentofthedamagesincurred.EstimatesindicatethatapproximatelyPhp1.65billionwouldbeneededinitiallytoenablethehardesthitfacilitiestorecoverfromtheeffectsofthedisaster.Prioritiesperfacilitywouldvarybasedontheowner’sabilitytofinanceneedsandastotheavailabilityofexternalfinancingthatwouldbeabletoprovideadequatesupportandgreaterflexibility.

Improving health systems for better disaster response

Thereisanopportunitytoimprovetheresiliencyoffacilitiesbyincreasingbothphysicalstructuresaswellasstrengtheningthehealthsystemtobeabletocopewithormitigatetheeffectsoffuturedisasters.Asseeninpreviousdisasters,medicalprioritieshaveshiftedfromfocusingonindividualpatientstowholepopulations.Existingcapacitiesofthefacilitieswerenotprepared.Hospitals,inparticular,needtohaveaplanandstrategytoquicklyfree-upcapacityanddeliverhealthcareinalternatecaresites.Inlikemanner,healthpersonnel(e.g.primarycarephysiciansandotherfrontlinehealthworkers)assignedtodisaster-proneand/orhigh-riskareasmustundergoemergencypreparedness and response trainings and should be consulted in disaster preparedness planning efforts.Ithasalsobeenproposedthatthegovernmentconstructfacilitiesthatcanserveaswarehouseswhereadditionalmedicalequipmentandsuppliesareavailabletohealthfacilitiesthatmaybeaffectedbydisasters.Therewouldbeaneedtoreviewwhatmedicines,medicalsuppliesandotheritemsareneededinthesefacilitiesandinwhatquantitiesaspreparationforanyemergency.


Thelongertermobjectivesoftherecoveryandreconstructionshouldfocusonimprovingthecapabilityofhealthproviders,andthefunctionalityofthehealthsystem.Bothrecoveryandreconstructioninthehealthsectorshouldhaveaholisticapproach,whichwouldincludeinterventionstoensureadequatepharmaceuticals,bloodandothersupplies,improvedhealthinformationsystems,adequatestaffingsupplyandcapabilities,functionalreferralsystems(amongpublic&privatefacilities),qualityofserviceofhealthfacilities,healthfinancingbuffersofthefamilies,aswellasformalandinformalengagements/collaborationswithcommunitygroupsandhealthcareorganizations.Healthmanpowershouldnotonlybeincreasedbutqualityofservicesmustbeimproved.

Hospitalsshouldconstituteanetworkandbeabletoprovidecross-supporttoeachotherinemergencysituations.Atthisscopethegovernmentshouldfacilitatethedraftingofacooperationagreementinwhichhealthfacilities,LGUsandcommunitiescancollaborateandcoordinatetheirefforts.Ideallyinthisframeworkforcooperationnotonlythecoststobuildthesystemshouldbeincluded,butalsothecostofdevelopingproceduresandguidelinesnecessaryfordisasterplanning,mitigation,trainingandresponse.Astrongercollaborationbetweenthegovernmentandprivatesectorinhealthmonitoringandprovisionofservicesduringtimesofdisasterwouldminimizethemorbiditiesandmortalitiescommonlyassociatedwithdisasters.Improvingthehealthofpeoplewoulddefinitelymakeiteasierforthemtogobacktotheirproductivelivespriorthedisaster.


Thenationalgovernmentwouldbeabletoutilizefundstoaddresstheneedsofsomeofitshealthfacilitiesbutwouldneedadditionalsupporttofundallitsrequirements.Developmentpartnersthathaveexistingprojectswiththegovernmentmaybeabletoquicklyaddresspartofthoseneedsbyre-aligningorreallocatingexistingprojectresourcesorthroughadditionalfinancingmechanisms.TheDOHmaybeabletousesomeofthesefundstoassistLGUsintheformofperformancegrants.

TheLGUsmayalsobenefitfromthepreviously-mentionedmeasureswithinexistingprojectsthattheymayberecipientsof.However,forLGUsthatarenotpartofexistingprojects,financialassistancethroughinstrumentstobeofferedbynationalfinancinginstitutionsmaybeexplored.

TheDOHwouldrequiretechnicalassistanceinthefollowingareas:• useofastandardtoolfordamageandlossassessmentandtheproceduresentailedinits

implementation,• collaboratewiththeprivatesectorintheuseoftheaforementionedtoolandprocedure,

assessmentofthehealthhumanresourceimplicationsofsuchdisastersandhowtoplanforit,• costingandtrackingoffuturedisasterreliefeffortsbothwithinandoutsideoftheDepartment• possibilityofharmonizing,integratingorcreatinganinterfacebetweenthedifferentexisting• informationsystemswithintheDepartmentincludingthatwiththeLGUsandprivatesector,

developingdisasterpreparedness,mitigationandresponseagreementwiththeprivatesectorandLGUs.


Recovery Framework: Health



100%ofallpublichealthfacilitieswouldhavebeen reconstructed and refurnished

Theextentofdamageininfrastructureandequipment in the public sector amounts to Php 1.7 billion.

Priority Activities

– Reconstructionofhospitals and medical facilitiesthathavebeenconsiderablydamaged: Php 514.972 million

– Allotherfacilitiestoundergorepairs:Php 359.78 million

– Main proposed measures andtechnicalassistance:developmentofapolicyon“disasterresilience”inconstructiondesign;assessment on the possible harmonization ofdifferentexistinginformationsystems,includingfromLGUs;reviewofcurrentdisasterpreparedness and development a disaster responseplan.

Outputs:

– Allpreviouslyidentifiedhealthfacilitiesforprioritizationwouldhave undergone repair and reconstruction that includes “disaster resiliency”andareabletoprovide100%oftheirprevioushealthservices.

– All policy and development capacity measures in place by the endof2010.

FinancingNeeds:Php 873.75 million for the reconstruction

– Allotherfacilitieswouldhavebeenfullyreconstructed and refurnished.

– FinancingNeeds:Php 840.08 million



Allprivatehealthfacilitieswouldhaveaccesstosoftloans

Theextentofdamageininfrastructureandequipment in the public sector amounts to Php 3,244.71 million.

-Prioritywillbegivento hospitals and medical facilitieswhichhaveaconsiderableamountofdamagedinfrastructureandequipment,highnumberofservicesofferedandlargenumberofpopulationbeingserved.Followingthesameformulainthepublicsector,theinitialneedwouldbePhp 1.65 billion.

-Output:afacilityismadeavailableforprivately-ownedandoperatedhealthfacilitiestoaddresstheirfinancingneedsinthereconstruction phase

-Allotherhospitalswouldhaveaccesstoeasycredit.

-FinancingNeeds:c/olocalbankingsectorand/orotherIFIs

-Allotherfacilitieswouldhavebeenfullyreconstructedandrefurnished.

-FinancingNeeds: Php 840.1 million

TOTAL FINANCING NEEDS Php 873.75 million for the public sector

Php 1.65 billion for the private sector

An estimated amount ofPhp 991.6 million is requiredfortheimmediaterecoveryphasebeforetheendof2009overandabovethe previously mentioned figures.ThiswouldaddresstheneedsofmostLGU-andprivately-ownedhealthfacilitiestobringingbackservicestowhatitwasbeforethedisasterbutforwhichadditionalfinancingismoredifficulttoaccess.Thecostestimateis30%forpublicand70%forprivatehealthfacilities.

Php 840.08 million for the public sector

Php 840.08 for the private sector


Infrastructure Sectors

“At five pm, I was watching TV when we got a text message from the dam managers telling us they were going to release water. I went to the dike to see the water level. I had never seen it so high. We went to the gas station along the highway. They offered us a small room to stay.”–WomanfromRosales,Pangasinan.

Pete

Tem

plo


Electricity Sector

Summary

Intheelectricitysector,themajordamagesandlossescausedbytropicalstormOndoywereinthedistributionnetworksoftheManilaElectricCompany(MERALCO)coveringtheNCR,andinRegionIV-A.DamagescausedbytyphoonPepengontheotherhandweremostsevereinRegionI,followedbytheCARandRegionII.TotaldamagesandlossesamountedtoPhp1.6billion,ofwhichPhp713millionandPhp879millionwerefordamagesandlosses,respectively.Bysub-sector,onlythetransmissionanddistributionnetworksexperienceddamages.Themaincausesofdamagetothetransmissionlineswerestrongwindsandsoilerosionfromfloods.Inthedistributionutilities(DUs),damagesweremainlycausedbyhighwinds,flooding,debrisandfallenvegetation.Economiclossesweremainlyduetolostrevenuesfromunservedelectricitydemandscausedbythepoweroutages.

Duringandimmediatelyafterthetyphoons,themainpriorityofthetransmissioncompanyandtheDUswasthetimelyrestorationofpowersupplywithinthecapabilitiesandsafetyrequirementsoftheirnetworks.Theworkrangedfromfullreplacementofdamagedinfrastructuretotheuseoftemporaryormake-shiftstructures.Line-bypassesandre-routingsweremadetoconnectinaccessiblecustomerlocations.Todate,powersupplyhasbeenfullyrestored.Reconstructionworksareongoingwithcompletiontargetssetforbeforetheendof2010.Theriskofworkslippagesbeyond2010andintothemedium-termisminimal.TotalfinancingneedsforreconstructionamounttoPhp713millionintheshort-term.

Sincethesectorhasessentiallyrecoveredandtherearenoforeseenmajorobstaclestofullreconstruction,thetransmissioncompanyandDUshaveadopteda“forward-looking”approachwithrespecttofuturetyphoonpreparedness.In2008,theNationalTransmissionCorporation(TRANSCO)recommendedanoveralltower-strengtheningprogram,particularlyinthecountry’scriticalhigh-windzoneandaTermsofReference(TOR)wasdevelopedforconsultingservicestoprovideTRANSCOwithacomprehensiveinvestmentplantoensurethatthecompanywasbetterpreparedtodealwithtyphoonsinthefuture.ItisrecommendedthattheTORbediscussedbyTRANSCOwiththenewprivateconcessionaireofthetransmissionsystem,theNationalGridCorporationofthePhilippines(NGCP),whichisnowresponsibleforupgradingthegrid.AsimilarTORshouldalsobedevelopedandimplementedforthedistributionnetworks,particularlytheElectricCooperatives(ECs).

Background

ThepowergenerationcapacityinthePhilippinestotals15,681megawatts(MW).During2008,totalelectricitygenerationreached60,821gigawatt-hours(GWh).TheprivatizationofNationalPowerCorporation(NPC)-ownedplantsandNPCIndependentPowerPlant/Producer(IPP)contractscontinues.Ofthetotalelectricitygenerated,22percentweregeneratedbyNPCplants,includingtheoff-gridpowerplantsownedandoperatedbyNPC’sSmallPowerUtilitiesGroup(SPUG);46percentbytheNPCIPPs;and32percentbyIPPsthatselltheirpowerdirectlytodistributionutilities(DUs)anddirectly-connectedcustomers.41

The Luzon, Visayas and Mindanao grids are currently operated, managed, maintained and being upgradedundera50-yearconcessioncontractwiththeNGCP.Thegridcomprisesatotalof19,778circuitkilometers(ckt-km)oftransmissionlines,24,814megavolt-amperes(MVA)ofsubstationcapacity,and1,081MVA-reactive(MVAR)capacitorsand1,175reactorsdistributedthroughout

41 http://www.doe.gov.ph/EP/Powersituationer.htm.


thecountry.42Besidesthelargeindustrialelectricityconsumersthatareconnecteddirectlytothenationalgrid,electricitytoend-usersissuppliedby145DUs.TheDUsarecomprisedof120ECs,17PrivateInvestor-ownedUtilities(PIOUs)and8LocalGovernmentUnit-OwnedUtilities(LGUOUs).43 Non-coincidentpeakdemandin2008totalled9,054MW.44

ThepathoftyphoonsOndoyandPepengaffectedmostoftheislandofLuzon,specificallyRegionsI,II,IV-A,CARandtheNCR.ThebulkofthepowergenerationsourcesandloadcentersarelocatedinLuzonwhichcontainsmorethan70percentofthecountry’sinstalledpowergeneratingcapacityandmaximumdemand.Italsohousesalmost80percentofthetotalsubstationcapacityofthenationalgrid.

Duringandimmediatelyafterthetyphoons,theaffectedpowersupplynetworks–NGCP,DUsandECs–undertookemergencymeasurestoensurethesafetyofaffectedpopulations.Powersupplywasrestoredbyacombinationofpermanentstructuresandtemporaryinstallations,includingemergencyrestorationstructures(ERS).Todate,allpowersupplyhasbeenrestoredexceptinareasthatcontinuetobefloodedorhavebeenpermanentlydamagedbylandslides.Effortsareongoingtocompletereconstructionofdamagedfacilities.

Damage and Losses

ThetotaldamageandlossescausedbythetwotyphoonsintheelectricitysectorareestimatedtoreachPhp1.6billion(seeTable40).45TheregionthatwashardesthitincludesNCR,comprisedofMetroManilaanditssurroundingprovincesandiswithinthefranchiseareaoftheMERALCO.MERALCO’sdamagesandlossesindistribution-relatedrevenuestotalPhp615million.ThebalanceofdamagesandlossesinNCRstemfromtropicalstormOndoydamagestoNGCP’stransmissionassetsthatconnecttotheMERALCOgrid,andlostpowergenerationandtransmissionrevenuesintheMERALCOfranchisearea.BesidesNCR,thenexthardesthitareawastheIlocandiaprovinces(Region1).InRegionIV-Atheeffectsweremostlyinelectricityoutagesatthepowergenerationplants.

Table 40: Damage and Losses in Electricity Sector, by Region (in Php million)

Region Damage Losses Total

I 114.9 143.1 258.0II 28.2 98.8 127.0

IVa 26.9 218.6 245.5CAR 68.1 65.8 134.0NCR 475.0 352.2 827.2Total 713.1 878.5 1,591.7

Overall,thedistributionsubsectoraccountedformorethanhalfthetotaldamageandlossesintheelectricitysector.Thiswasfollowedbylossesinthegenerationsubsector(seeTable41).Thedamageandlossesineachsub-sectorareasfollows.

42 2009TransmissionDevelopmentPlan,ConsultationDraft,NationalGridCorporationofthePhilippines,Vol.1,September2009.

43 DistributionDevelopmentPlan2008-2017,ElectricPowerIndustryManagementBureau,DepartmentofEnergy,August2009.

44 http://www.doe.gov.ph/EP/Powersituationer.htm.45 Damagesarethetotalorpartiallydestroyedassetscausedbythetyphoons.Lossesrefertotheunrealizedorreduced

revenuesfrompowersupplyinterruptionorreducedelectricitydemandcausedbythetyphoons.


Table 41: Damage and Losses in Electricity, by Sub-sector (in Php million)

Sub-sector Damage Losses Total

Generation 480.6 480.6

Transmission 124.8 123.3 248.1

Distribution 588.3 274.7 863

Total 713.1 878.5 1,591.7

Generation Sub-Sector

Thegenerationsub-sectorfaredwellduringthetyphoonsinthattherewerenodamagestothepowerplants.However,fourgeneratingplants–Ilijan,Sta.Rita,SanLorenzoandCasecnan–withatotalcapacityof2,954MW(onefourththetotalinstalledcapacityinLuzon),incurredlossesofuptoPhp199millionduetoforcedoutagesorplantshut-downscausedbylowsystemdemand.InthecaseofCasecnan,itslossofPhp56millionwascaused,notbyreducedelectricitydemandbutbytheemergencyshutdownsorderedbytheNationalIrrigationAdministration(NIA)duetocriticalelevationsreachedatthePantabangandam.46TherewerealsoothergeneratingplantsthatdidnothaveforcedoutagesbutincurredcombinedlossesofuptoPhp225millionduetoa60GWhreductioninelectricitydemand(Table42).

Table 42: Generation Loss

Unserved Energy(Gwh)

Generation Loss(in Php million)

Ilijan 21 68

Sta.Rita 25 102

San Lorenzo 7 28

Casecnan 7 56

Other generating plants

64 225

Total 125 481

Transmission Sub-Sector

Unlikethegenerationsub-sector,NGCPreportedthatthenationalgridencountereddamagesin42transmissionlinestructuresand26substationequipmentinthe230kilovolt(kV)and69kVsystemsinLaUnion,Benguet,MountainProvince,Pangasinan,Batangas,Cavite,LagunaandQuezon.

Transmissionlinedamagesvaried.Someexperiencednodamagetothetransmissionassetitself,thoughsoilerosionthatexposesorweakenstowerfoundationsposesthreatstotheintegrityofthesestructures.Sometransmissionlinessufferedpartialstructuraldamageswhileotherswerecompletelydamagedandrequirereplacement.

TotaldamagestothenationalgridamounttoPhp35million.Duetothesedamages,6GWhofenergywaslostduringtransmissioninterruptions.ThishascostNGCPPhp8millioninlostrevenues.Whenaddingthereducedenergydemandsatlowervoltagesinthepowerdistributionlevel,totalrevenuelosstoNGCPamountstoPhp123million.

46 Source:DepartmentofEnergy,ElectricPowerIndustryManagementBureau.


Distribution Sub-Sector

TheDUsaffectedbytyphoonsOndoyandPepengincludetwoPIOUs,i.e.,MERALCOandDagupanElectricCorporation(DECORP),and18ECs,withatotalnon-coincidentpeakdemandof5,410MW,equivalenttomorethan80percentofthepeakdemandof6,674MWinLuzon.

Totaldamageinthesub-sectorreachedPhp588million,ofwhich77percent(Php453million)tookplaceintheMERALCOfranchisearea.FifteenofMERALCO’s114substationsand215outof683distributionlineswereaffectedbythetyphoons.Ontheotherhand,accordingtoNEA,damagesintheECstotalPhp131million,brokendownasfollows:60percentfromtransformers;33percentfromdistributioncircuits;andsevenpercentfrommeteringequipment.

Unservedenergydemandfrompoweroutagestotalled114GWh.Asaresult,DUslostacombinedtotalofPhp275millioninlostrevenuesfromdistribution,supply,meteringandotherDUrelatedcharges.Totaldamagesandlossesinthedistributionsub-sectortotalPhp863million(seeTable43).

Table 43: Distribution Sub-Sector Damage and Losses

Damage Unreserved Losses Damage & Losses(in Php million) Egy (GWh) (in Php million) (in Php million)

PIOUs - - - -Meralco 455 66 160 615Decorp 2 4 6 8ECs 131 48 108 239Total 588 118 275 863

Impacts on the External Sector and Fiscal Budget

Thedamageandlossesintheelectricitysectorwillnothaveaneffectonthefiscalbudget.NGCPandthePIOUsareprivatecompaniesthathavethecapacitytoaccessfundsfromcommercialsources.ECsontheotherhandhaveacceptedfinancingsupportfromNEAatconcessionalormarketrates.

Nevertheless,thesectorwillhaveasizeableforeignexchangerequirementequivalentto41percent(Php293million)ofitstotalreconstructioncost.Highvoltagetowers,poles,transformersandmetersarestillmostlyimported.ItisexpectedthatthereconstructionrequirementswouldbefundedasshowninTable44.

Table 44: Foreign Exchange Requirements (in Php million)

Sub-sector Foreign Local TotalGeneration - - -Transmission 106 18 125Distribution 186 402 588Total 293 420 713



Duringandimmediatelyafterthetyphoons,thefocusofthesectorwastorestorepowerservicesasearlyaspossible.Theaimwasto:(i)maintaincustomerservice;(ii)adheretoperformancestandardssetbythepowercompaniesthemselves,inadditiontotheirmandateandobligationsbyregulationoftheEnergyRegulatoryCommission(ERC);and(iii)minimizelostrevenuesfromunservedelectricitydemands.Theoverallobjectiveinthesector,particularlyinthetransmissionanddistributionsub-sectors,istherestorationofinterruptedpowersupplyandreconstructionofdamagedinfrastructurecausedbytyphoonsOndoyandPepeng.

Generation Sub-sector

Amongthethreesub-sectors,powergenerationwasthefirsttorecover,giventhatplantoutageswerecausednotbytechnicaldamagesorconstraints,butratherbyextraneousfactorsorexternaleffectsfromtheothersub-sectors.Sta.RitaandSanLorenzoareIPPsthatareexclusivelyunderbi-lateralpowercontractwithMERALCO.Theirplantshut-downswereduetothereducedelectricitydemandofMERALCOatthetime.Ilijan,anIPPundercontractwithNPC,alsoshut-downitsplantduetoreducedelectricitydemandinthegrid.InthecaseofCasecnan,itsshut-downwasbyorderofNEAduetocriticalelevationsreachedatPantabangan.

Asaresult,therewerenomorerecoveryneedsinthegenerationsub-sectoratthetimeofwriting.Therewerenodamagesinthesub-sectorandthus,therearenoreconstructionneedseither.

Transmission Sub-Sector

NGCPhasfullyrecoveredto-date.RapidpowerrestorationwasmadepossiblebyacombinationofusingERSsandby-passlines,re-routingoftransmissionlinesininaccessibleareasandreconstructionofpermanentstructureswheneverpossible.

Theaveragerestorationworkonatransmissionlinesectionthatwasdamagedbythetyphoonsisslightlymorethanthreedays,i.e.,80hours.Atpresent,NGCPiscompletingPhp87millionworthofrepairsandreconstructionworkonthedamagesaffectedbyPepeng,andPhp10millionworthinareasaffectedbyOndoy.Theseworksareequivalentto78percentofthetotalPhp125millionestimateddamagesinthetransmissionsystem.

Therearenomorerecoveryneedsinthetransmissionsub-sector.NGCPhasitsownperformancestandardtocompletetowerreconstructionwithinthreemonthsfromthetimeofdamage,thusallworksareexpectedtobecompletedwithin2010,unlessthereareunexpecteddelayscausedbyright-of-wayproblems.Atpresent,therearenoreconstructionneedsforeseenfromthedamagesofOndoyandPepengoverthemedium-term,i.e.,beyond2010.

Distribution Sub-Sector

Powersupplyhasbeenfully-restoredinallDUs,exceptincustomerareasanddwellingsthatcontinuetobeflooded,andinuninhabitableareascausedbysoilerosionandlandslide.WithregardtotheECs,theircapacitiesforfullrecoverywereenhancedbyNEA’semergencyresponseprogram,namedOperationKapatid(Brotherhood),whichencouragedunaffectedECstodeploymanpowerandlendequipment,materialsandsuppliestotheECsaffectedbythetyphoons.Todate,fullreconstructionworkisstillongoingintheDUs.However,allworkisexpectedtobecompletedbyend-2010.

Inthepast,therewereslippagesanddelaysineffectingfullreconstructionofdamagedinfrastructure,especiallyintheECs.Insuchcases,thecommonrationalewasduetofinancialconstraints.Todayhowever,theriskofslippagesisminimalduetothefollowing:(i)ECsareaccessing


financialassistancefromNEAintheformofconcessionalandnon-concessionalloans;(ii)ECsareawarethatearlycompletionoffullreconstructionwouldmakethemmorepreparedforfuturetyphoons;and(iii)thereareregulatorypressurestocontrolsystemlosses,asapplicabletoallDUsincludingPIOUs.AlmosthalfoftherepairandreconstructionworksintheaffectedECshavebeencompleted.

Therearecurrentlynootherrecoveryneedsinthedistributionsub-sectoranditisexpectedthattherewillbenoreconstructionneedsfromthedamageswroughtbyOndoyandPepengafter2010.

Summary of Recovery and Reconstruction Needs

Allrecoveryandreconstructionneedsofthethreesub-sectors,i.e.,generation,transmissionanddistribution,areexpectedtobemetovertheshortterm,byend-2010(seeTable45).ThetotalamountstoPhp713million.AlthoughtherearepossibilitiesofslippagesinthereconstructionschedulesofNGCPandtheDUs,theriskthatcompletiondelaysextendbeyond2010isperceivedtobeminimal.

Table 45: Recovery and Reconstruction Needs (in Php million)

NeedsReconstruction Total (Private)

Subsector Short-term Short-term Generation - -Transmission 124.8 124.8Distribution 588.3 588.3Total 713.1 713.1

Sector Strategy

Sincethesectorhaseffectivelyrecoveredandtheredoesnotappeartobeanymajorobstaclestofullreconstruction,thesector,particularlythetransmissionanddistributionsub-sectors,arealreadyadoptinga“forward-looking”approachintermsofpossibleenhancementsandrisk-mitigationmeasuresforfuturetyphoons.NGCPiscurrentlylookingintotowerdesignimprovementssuchastheuseoftubular,ratherthanangular,supports,andtheneedtostock-uponsparetowersandERSs.SimilarlyattheEClevel,NEAislookingintopoledesignimprovementsandthepossibilityofincreasingsparepartinventoriesoftheECs.

Movingforward,thestrategiesinthetransmissionanddistributionsub-sectorsareto:

(i) improvetransmissionanddistributionnetworkinfrastructureinordertobemoreresilienttofuturetyphoons,andtoensurethesafetyoflocalities;and

(ii) enhancedisastermanagementsystemsthatwillminimizepowersupplyinterruptions,inconsiderationofthewelfareofthepopulation.

AstudybytheTRANSCOin2007establishedtheincreasedincidenceofsupertyphoons.TRANSCOhasrevieweditsdesignstandardsforwindresistanceofitstransmissiontowersandlines,comparedtothoseinJapanandinothercountriessimilarlypronetosuper-typhoons.Thestudyfoundthatmanytransmissionlinesbuiltbetween1960and1980hadmuchlowerdesignstandards,capableofwithstandingwindspeedsofonly165–180km/hr–significantlybelowthewindspeedsoftherecentsuper-typhoons.Basedonthisreview,TRANSCOadoptedastandardof270km/hrinZoneIfortheBicol-Visayascorridorand240km/hrforothertyphoon-proneareas.

Asaresultofitsstudy,TRANSCOrecommendedanoveralltower-strengtheningprogram,particularlyinthecountry’scriticalhigh-windzones.Thegovernmentagreedtotheneedforastrengthening


programandimprovedcapabilitytorespondtoemergenciesinthetransmissionsystem.ATORwasputtogetherforconsultingservicestoprovideTRANSCOwithacomprehensiveinvestmentplantoensurethatthecompanyisbetterpreparedtodealwithtyphoons.ItisrecommendedthattheTORbeproposedbyTRANSCOforimplementationbythenewprivateconcessionaire,NGCP,whichisnowresponsibleforupgradingthegrid.

ConsideringthattheECsexperienceddamagesandlossesofsimilarmagnitudetoNGCP,itisalsorecommendedthatasimilarTORfordistributionutilitiesbedevelopedbyNEA/DOE.ThescopeofTORcouldalsoincludethesmallerPIOUnetworks.Theconsultant’sworkwouldeventuallydeterminetheinvestmentandfinancingneedsinthedistributionsub-sector,andespeciallyfortheECs.TheTRANSCOTORwasearlierestimatedtocostaroundUS$500,000.ThereisnocostestimateyetfortheDUTOR.


Forthetransmissionsub-sector,itisproposedthatTRANSCOpursueimplementationoftheTORbyNGCP.Forthedistributionsub-sector,itisproposedthatNEA/DOE/ECscoordinatethisundertaking.

Recovery Framework: Electricity



GenerationSub-sector:

Completepowerrestoration

Therewerenodamageso inthissub-sector.

Lost revenues totalled o Php481millionfromunserved electricity demandof120GWhdueto reduced electricity demands and a hydro-dam emergency shut-down.

Therearenofurthero priority activities to be undertaken in the generation sub-sector.

Noneo

TransmissionSub-sector:Completerestorationofpowersupply,andrepairandreconstructionofdamagedinfrastructure

Total damages in o transmission system causedbystrongwindsandsoilerosionfromfloodsreachedPhp125million.

Lost revenues totalled o Php123millionfromunserved electricity caused by transmission line damages and reduced electricity demand ofdirectlyconnectedcustomers.

Powersupplyhaso beenfullyrestored.All repairs and reconstruction worksareexpectedto be completed by year-end2010.


Thepriorityfocushaso shiftedto“preparedness”forfuturetyphoons.

Themainoutputofo thestudywouldbeacomprehensive investment plan to ensure that the company is better prepared todealwithtyphoons.

DistributionSub-sector:Completerestorationofpowersupply,andrepairandreconstructionofdamagedinfrastructure

Total damages in o distribution systems caused by strong winds,debrisandfelledvegetation,andfloodingreachedPhp588million.

Lost revenues totaled o Php275millionfromunserved electricity caused by distribution line damages and disconnectedcustomers.

Powersupplyhaso beenfullyrestored.All repairs and reconstruction worksareexpectedto be completed by year-end2010.


Thepriorityfocushaso shiftedto“preparedness”forfuturetyphoons.

Themainoutputofo thestudywouldbeacomprehensive investment plan to ensure that the DUs, especially the ECs, are better prepared to deal withtyphoons.

Financingneeds:TBDo

Total Php 713 million


Water Supply and Sanitation SectorSummary

Thewaterandsanitationsectorwasnotsparedthedamagewroughtbytherecenttyphoons.TotalvalueofdamageandlossesinthesectorisestimatedatPhp1.14billion,wheredamagesaloneamounttoPhp372.5millionandlossestoPhp768.6million.Approximately65percentofthetotaldamagesweresustainedbythepublicsectorin11provinces,with35percentoftotaldamagessustainedbytheprivatesector.Almostallprivatesectordamages(99percent)occurredinMetroManila.Intermsoflosses,67percentwassustainedbytheprivatesector,allintheMetroManilaarea.Takenasawhole,theregionthatsufferedthemostdamageinwatersupplyfacilitieswastheNCRat48percentfollowedbyCARat30percent.

TherecoveryandreconstructionneedsofthesectorwouldrequiretotalfinancingestimatedatPhp161.5million,wherePhp24.4millionwillbeneededintheshort-termandPhp137.1millioninthemedium-term.Priorityneedsarecategorizedintothefollowingkeyactivities:(a)facility-relatedrestorationandreconstructionworksondamagedcomponentsofthesystem;(b)policymeasurestofacilitateimmediatereconstructionsuchasflexibleemergencyfinancingsupportandstreamlinedprojectapprovalandprocurementprocesses;(c)projectpreparatoryactivitiesandstudies;and(d)capacitydevelopmentondisastermanagement.

Meanwhile,thereisaneedtoformulateapolicyonemergencyfinancing,includinganinventoryofexistingfundsavailableforwatersupply,projectapprovalsandprocurement.ThereisalsoaneedtoestablishanintegratedsectorframeworkbyimplementingExecutiveOrders(EO)12347 and 27948,includingtheestablishmentofacommonfinancingarchitecturethatmaybetappedbywaterserviceproviders.

Background

Pre-Disaster Conditions

BasedontheWHO-UNICEFtrackingofthemillenniumdevelopmentgoals(MDGs)forwaterandsanitation,therearevaryingestimatesontheextentofwatersupplycoveragenationwide.Asofthe2006population,drinkingwatercoveragewas93percent,upfrom83percentin1990.Accesstopipedwatersystemsintheaffectedareasisasfollows:RegionI–25percent,RegionII–19percent,RegionIII–43percent,RegionIV-A–52percent,CAR–61percentandNCR–75percent.

ThewatersupplyproviderswithintheareasaffectedbytyphoonsOndoyandPepengincludethepublicandprivatesectors.Intermsofserviceconnection,themostdominantprovidersoutsideMetroManilaarethewaterdistricts,followedbythetwoconcessionairesofMetroManilaLGUs,andafewprivateproviders.

47 ExecutiveOrder123of2002ReconstitutingtheNationalWaterResourcesBoard48 ExecutiveOrder279of2004InstitutingReformsintheFinancingPoliciesfortheWaterSupplyandSewerageSector

andWaterServiceProvidersandProvidingfortheRationalizationofLWUA’sOrganizationalStructureandOperationsinSupportThereof

Jona

than

Cel

lona


Intermsofsanitation,thecountryissufferingfromaseverestateofwaterqualitydeteriorationwithonly35percentofwaterbodiesnationwideabletosupportlifesystems.AccesstosanitationinthecountrywasestimatedbytheWHO-UNICEFJMPat78percentin2006,upfrom58percentin1990whereonlyfourtofivepercentwereconnectedtoseweragesystems.ExceptforthetwoconcessionairesofMetroManila,mostwatersupplyprovidersfocusonlyonwatersupplyservices.LGUsaremandatedtoprovideessentialservicessuchaswatersupplyandsanitationservices.About97percentofitsinvestmentsareforwatersupplyandonlythreepercentforsanitationandwastewatertreatment.

Immediate as well as on-going relief and recovery efforts

Theaffectedwaterutilitiesreportedpartialdamages.Althoughoperationswerenottotallyinterrupted,immediaterestorationactivitieswereundertaken.Damagedpipelineswereprovidedwithtemporaryconnectionsinordertorestorewatersupplyserviceimmediately.Replacementpartsandmotorsforboosterpumpswereimmediatelyprocured.Generatorsetswerecleanedandputbackintooperation.Mostofthewaterutilitieshaveincurredlossesduetohumanitarianactivities,suchastheprovisionoffreewatertoevacuationareas,flushingandcleaningofmajorgovernmentfacilitiesandoffices,anddeliveryofwatertointerruptedareasthroughbulkwatersupply.

Withrespecttowastewaterfacilities,cleaningofthefacilitieswasundertakenafterthefloodwaterhadsubsided.Operationswererestoredoncethefacilitieswerecleanedsincenoconsiderabledamagewasincurred.Checkingofthewastewaternetworkwasalsodonethroughouttheservicearea.

Haulingofsolidwastehasincreasedduetothedebris,garbageandsiltthatwerebroughtaboutbythetyphoon.Collectionofgarbagewasalsotemporarilyputonholdinmanyareassincefloodwaterhadnotyetsubsided.Theprivatesectorwasalsomobilizedtospeedupthecleaningcampaignofsolidwaste.

Damage and Losses

Total Estimated Damage and Losses

TotalvalueofdamageandlossesinthewaterandsanitationsectorisestimatedatPhp1.1billion.Morethan50watersupplysystemsmanagedbythevariouswatersupplyserviceproviders(composedofwaterdistricts,privateconcessionaires,andLGU-managedsystems)weredamagedbythetwotyphoons.ThetotaldamagessustainedbythewaterandsanitationsectoramounttoPhp372.5million,whilecombinedlossesamounttoPhp768.6million.TheNCRwhereMetroManilaislocatedsustainedtheheaviestdamagesandlossesamountingtoPhp939million.ThisisfollowedbytheCARwithtotaldamageandlossesofPhp88million.BaguioCitysuffereddamagetoitsseweragesystemaswellasitsdistrict’sintakestructures,dams,transmissionpipelinesandtheSantoTomasimpoundingreservoirwhichhadheavysiltation.ManyruralwatersupplysystemsintheCARwerealsoaffectedbylandslidesandmudslides.Theprivatesector,morespecificallythetwoMetroManilaconcessionaires,sustainedsubstantialdamageandlossesfrombothwatersupplyandsanitationoperations.Withregardtoownership,thepublicsectorincurredmoredamageandlosses (Php322.5million)thantheprivatesector(Php30million)insanitationandsolidwastemanagement (Figure5).UrbanareasexperiencedsignificantlymoredamageandlossesinboththewatersupplyandsanitationsubsectorsofPhp1.1billionthanruralareaswithonlyPhp50.0million.


Figure 5. Damage and Losses to Water Supply and Sanitation, By Ownership (in Php million)

Regardingwatersupply,damagestofacilitiesincludeboosterpumpstations,transmissionanddistributionpipelines,sedimentationbasins,electricalequipment,generatorsets,flowmeters,businessareabuildingsandservicevehiclesthatweresubmergedinfloodwaters.Someofthesefacilitiescouldnotbereactivatedimmediately,includingboosterpumpstationsthereplacementorrewindingofwhichtooktime.Inotherareas,generatorsetsthatweresubmergedinwatercouldnotbeoperatedduringpoweroutageandthisdecreasedthesupplyofwatertoitscustomers.ManilaWaterCompany,Inc.(MWCI)reportedthehighestdamagesbyasinglewaterserviceprovider,amountingtoPhp78million.Lossesingeneralwereincurredduetoincreasednon-revenuewaterusedtosupplyfreewatertoevacuationareasandforcleaningactivities.Lossesalsoresultedfromlessvolumeofwatersoldtocustomersbecauseofdisruptionofservicewhiledamagedequipmentwasbeingfixedandpowersupplywasnotyetfullyrestored.

Onsewerage,therewerethreewastewatersystemsthatweredamaged:twoareinMetroManilaoperatedbyMWCIandMayniladWaterServicesInc.(MWSI),andtheotheristheLGU-managedsystemofBaguioCity.TheMagallanesSewageTreatmentPlant(STP)locatedinPasayCity,MetroManilastoppedoperationswhileitwassubmergedinfloodwaters.TheBaguioCityfacilitysustaineddamagesonthewastewaternetwork.TotaldamagesforseweragewereestimatedbytheserviceprovidersatPhp33.4millionofwhichPhp3.6millionwasincurredbypublicutilitiesandPhp29.8millionbyprivateutilities.

Onsolidwastemanagement,damagesoncollectionanddisposalfacilitieswereestimatedatPhp135.2millionwithMetroManilaLGUsincurringthemost.Mostofthesedamagesweresustainedbycollectiontrucksandsolidwastemanagementequipmentthatweresubmergedunderfloodwaters.LossesareestimatedatPhp178.4millionwhichwasincurredbythepublicutilitiesforhighertransportcost.ThehighestdamagesandlosseswerealsoincurredinNCR.

Impact on External Sector and Fiscal Budget

Thewatersupplysectorusesimportedgoodsthatareavailablelocallyforitsoperationssuchaspumps,motors,generatorsets,pipesandotherspareparts.Demandforthesegoodsandequipmenthasincreasedtoreplaceandrestoredamagedfacilities.Laborforrepairandreplacementoffacilitieshaslikewiseincreasedprovidingemployment,albeitshort,tomanyworkers.Onthedownside,


mostofthefacilitiesandstructuresarefundedbyinternalcashgenerationsoftheserviceprovidersorloanedthroughpublicorgovernmentfinancinginstitutionsincludingtheLocalWaterUtilitiesAdministration(LWUA).DelaysinrepaymentandevenrestructuringofloansfromGovernmentFinancingInstitutions(GFIs)andtheprivatesectormaybeexpected.Thiswillconcomitantlyhaveanimpactonthefiscalpositionofthenationalgovernment,especiallysincetheseloanscarryanimplicitnationalgovernmentguarantee.Withdamagesinwaterfacilities,downstreamindustrieswhichutilizewaterasrawmaterialorimportantcomponentoftheirproductsmayalsohaveexperiencedaslowdownintheiroperations.

Policy Measures to Implement Priority Recovery and Reconstruction Needs

Theimportanceofthewatersupplyandsanitationsectorismorepronouncedindisasterpronecountries,suchasthePhilippines,givenitsroleinprovidingbasicneedstoaffectedareas.Serviceprovidershadtorespondveryquicklyandbringbackservicestotheirbeneficiariesandtoavoidfurtherlosses.However,therearecaseswhererecoveryofutilitiesinpastdisastershastakenaninordinateamountoftime.Suchexperiencesrevealseveralfactorscontributingtoobstaclestoreconstructionandrecoverywithinashorttimeframe,including:(a)thelackofflexibleemergencyfinancingsupport;(b)lackofcapacitytostreamlineprocurementandauditingprocesses;and(c)lackofstreamlinedgovernmentapprovalsandbureaucracies.Thechallengetoimmediatelyrestorewaterandsanitationsystemsdependstoalargedegreeonthesefactors,whichwouldrequirepolicyreformsandguidelinesforemergencywork.


Short-term Needs

Thereisaneedtorestoreservicesinaffectedareasbyreconnectingandprovidingaffectedpeoplewithpotablewatersupply.Theimmediaterestorationwouldminimizefurtherlossestoserviceprovidersresultingfromareductionofsales,aslowdowninoperations,andanincreaseinnon-revenuewater.Immediatelyafterthetyphoons,mostofthewatersupplyserviceprovidersinitiatedrestorationandtemporaryrepairsonmostofthedamagedwatersupplyandwastewaterfacilities.Partialrestorationwasundertakeninordertosupplywatertocustomers.Asmostofthedamagedfacilitiesofwatersupplysystemsarepumpingstations,generators,andothermotor-drivenfacilities,immediaterepairorreplacementaswellascleaningshouldbeundertakentoputthembackintooperation.Pipelinesdamagedbylandslidesormudslidesneedreplacement/realignmentandhavetobeproperlysecured(i.e.,deepersoilcover,cementencasement,anchorblocks,etc.).

For heavily damaged components such as dams and other intake structures, the service providers shouldstartimmediateplanningandprojectpreparationactivitiesfortheirrestoration,includingfeasibilitystudiesanddetailedengineeringdesigns.Projectpreparationshouldalsoincludethereviewandenhancementofexistingstandardstoberesilienttodisasters.Likewise,emergencyresponseguidelinesandrequirementsshouldbereviewedsincewatersupplyandsanitationhasalwaysbeenabasicinfrastructureforrelief.

Medium-Term Needs

InMetroManila,temporaryrationingwasestablishedinextremelydamagedareasthroughwatertankersorfiretrucks.Thesewerealsousedtotransportbulkwaterinemergencyandresettlementareas.However,themajorityofserviceprovidersoutsideMetroManiladonothavewatertankersthatcanbemobilizedintimesofcalamity.Inviewofrecurringdisastersandtobeabletoreachunservedareas,waterprovidersshouldatleasthaveawatertankerforbulkwatersupply.


Thereisaneedtorevisitvariouscomponentsofthewatersupplyandseweragesystemandbasedontheexperienceofwaterproviders,optionstomitigateandprotectagainstrecurrenceshouldbeplannedandimplemented.Amongothers,wellpumpingstationsthatweredamagedmayopttoreplaceverticalturbinepumpswithasubmersibletypepumpandmotor.Thismayentailasimpledesignrevieworchangesinspecifications.Thecostofchangingthetypeofpumpmaybesignificanttosomeserviceprovidersandmaytakealongertimetoimplement.However,thiswouldensurethatthepumpandmotorwillneverbedamagedbyanyflooding.Incaseswherethesubmersibletypeofpumpandmotorisnotapplicable,duetothesizeofthewellcasing,itwouldbenecessarytoelevatethebaseofthepumpandmotor.Thiswouldentailrevisingthedesignofthepumpbaseortheentirepumpingstation.

TheMagallanesSTPneedstoberehabilitatedandupgraded.MWCIhasplansofexpandingthecapacityofthetreatmentplantbutcannotimplementitwithoutinterruptingtheoperationsoftheplant.Withthedamageincurredduringthetyphoon,itisnowimperativeforthemtorehabilitateandexpandtheSTPaswellasupgradeitsfacilities.Thiswouldneedaverydetailedstudyonthehowtoupgradethefacilitiesandexpandthecapacity,consideringthelimitedareaofthisSTP.Newtechnologicaladvancementinwastewatertreatmentmaybeneededinthedesign.Itmaytakeafewmonthstoundertakeastudyanddetailedengineeringandafewyearsforconstructionwork.

TheproposedSTPofMWCIinMarikinaCity,MetroManila,willbelocatedbesidetheMarikinaRiver.Theareawascompletelysubmergedinveryhighwaterduringthetyphoon.Althoughthisprojectisstillinthedesignstage,thereisaneedtoadjustthedesignto takeintoconsiderationtheunusuallyhighlevelofwaterintheriver.AchangeinlocationmaynotbepossiblesincethereareveryfewopenareasinMarikinathatarelargeenoughtoaccommodatethesizeofthesewagetreatmentplant.Inaddition,thiswouldentailadditionalcostintermsofprojectpreparationanddetaileddesign.Moreover,theseweragenetworkwouldneedre-configurationifthelocationwasaltered.Theimplementationschedulemightneedtoberevised,totakeaccountofthechangesinthedesignanditsimpactonothercomponentsoftheproject.Atpresent,theproposedprojectshouldbedesignedsuchthatfacilitiesareprotectedfromthehighlevelofwaterfromtheMarikinaRiver.Thismayentailtheconstructionofabufferwallorelevatingthesitebybackfillingittoalevelthatwillnotbereachedbyfloodwaters.Suchrevisionswillentailadditionalcoststhatwerenotpartoftheoriginalbudget.

AnotherproposedprojectofMWCIistheSTPinTaguigCity,MetroManila.TheproposedlocationofthetreatmentplantisintheBayBreezesubdivision.Thesiteisinoneofthelow-lyingareasinthiscity.Althoughtheoriginalplanconsideredelevatingtheplantsite,thereisaneedtofurtherelevatethetreatmentplanttomakeitmoreresilienttoflooding.MWCImayneedtorevisethetermsofreferenceforthisprojectwhichwillentailadditionalcost.Delayintheimplementationscheduleisalsoforeseenduetotheadditionalworkneeded.

Onlyoneprojectisforeseentorequiremoretimetorehabilitate.TheSantoTomasreservoirofBaguioCityWaterDistrictneedstobethoroughlyevaluatedandstudiedsincetherearemanyfactorstoconsiderinitsrestorationprogram.Firstarethelandslide/mudslidesthatcausedheavysiltationofthereservoir.Thereisaneedtostudywhatmeasurescanbeundertakentopreventthelandslidesfromposingadangertothisfacility,especiallyinthefuturewhensuchheavyrainsmayagaintriggerlandslidesinthearea.De-siltingofthereservoirisamajortaskandnotmanyconstructioncompanieshavetheequipmentorskilltoundertakeit.Capitalexpendituresforthistaskmaynotbewithinthecapacityofthewaterdistrictiffundingwillsolelybefrominternalcashgeneration.AdditionalfundingmaybesoughtfromtheLWUA,butwouldentailtimeintheprocessingofsuchloans.TherewouldbeaneedtoprepareaprogramofworkwhichwillbethebasisforloanprocessingandapprovalbyLWUA.


Inaddition,theremaybeaneedtoevaluatethefeasibilityofrepairingthedamagedliningofthereservoirwhichcausesseepage.Thereisalsoaneedtodeterminethepossiblecausesofwhythepolyethylenelininghasruptured.Appropriatesolutionscanthenbeimplementedinthefuture.

Financing Needs

Sincewatersupplyandsanitationisabasicneed,mostoftherecoveryandreconstructionhavestartedimmediatelyafterthetyphoons.Mostofthesystemdamageshavealreadybeenrestoredandthesystemsarebacktotheirnormaloperation.Likewise,reconstructionplanningandredesigningofmajordamagedcomponentshavealreadystarted.However,therearestillremainingactivitiesthattheserviceprovidershavetoimplement,includingtheenactmentofpoliciesaswellastheimmediatepurchaseofgoodsneededtorespondtodisasters.Thetotalcosttoimplementtheshort-andmedium-termneedsforrecoveryandreconstructionisestimatedatPhp161.5million,brokendownasfollows:

Table 46. Financing Needs for Recovery and Reconstruction (in Php million)

Sub-SectorRecovery Reconstruction Total

Short- Term Medium-Term Short- Term Medium-Term Short- Term Medium - Term

Water Supply 1.4 7.9 4.2 35.5 5.6 43.4

Sanitation 9.8 12.2 9.0 81.5 18.8 93.7

WSS Total 11.2 20.1 13.2 117.0 24.4 137.1

Private 10.1 18.1 11.9 105.3 22.0 123.4

Public 1.1 2.0 1.3 11.7 2.4 13.7

Note:Assumptionswerebasedontheactivities/programstorestorethesystems,excludingimmediateworksthathavealreadybeenimplement-ed.Sanitationestimatesincludethereconstructionoftheseweragesystemsandsolidwastecollectionanddisposalfacilities.


Theimmediaterestorationactivitiesincludingprojectpreparationwillbeimplementedbytheresponsiblewaterserviceproviders.Meanwhile,thenationalgovernmentshouldstartworkingonthepoliciesrelatedtoimplementationofthereconstructiontoavoidfurtherlossesofserviceproviders.


Recovery Framework: Water Supply and Sanitation

Outcomes BaselinePriority Activities to December 2010

Priority Activities to December 2012

Water Supply

Restore potable, •safeandreliablewatersupplyto consumers in disaster affectedareasand proposed resettlement areas

Damages to various •componentsofthesystemwhicharemainly on dams, pumpsandmotors.Higher revenue •lossesofwaterservice providers due to decrease in sales,reducedwaterproduction and higher non-revenue water

Facility-related Cleaninganddryingof•facilitiesReplacementofburnt•out spare parts, damaged pumps and motorsRepair/replacementof•generator setsRepairandrestorationof•damaged pipelines

PolicyPolicy measures to •facilitateimmediatereconstruction such asflexibleemergencyfinancingsupportandstreamlinedprojectapproval and procurement processes

Preparatory activitiesConductofstudiesto•reviewandupdatetechnicalspecificationsofwatersupplyfacilitiesto make them disaster resilientPhp 5.6 million•

Facility-relatedDesiltingofimpounding•reservoirRepairofruptured•polyethelene linerReconstructionof•damaged small impounding damsReplacementofvertical•turbinepumpswithsubmersibletypeofpumps and motors

PolicyEstablishing an •integrated sector frameworkbyimplementing EO 123 and 279, including theestablishmentofacommonfinancingarchitecture or mechanism

Capacity developmentProvide trainings on •waterandsanitationdisaster response and managementPhp 43.4 million•

Sanitation

Sewerage

Restore •operational efficiencyofwastewaterfacilitiesandenhancedesignofexistingprogramforwastewatertreatment

Damages to •wastewatertreatment plants wereonmotor-driven components andwereflood-related such as scouring, siltation, etc.Loss is almost nil•

Detailed engineering •studyfortheupgrade,rehabilitation and expansionoftheMagallanes STPRedesignofproposed•other STPs in Metro Manila

Retrofittingof•Magallanes STPConstructionof•proposed redesigned STPs

Solid Waste

Restore and •increase solid wastecollectionefficiency

Damages and losses •areaccountedforinwastecollection Losses in disposal •facilityisnil

Repairoffleetof•collection vehicles and equipmentPlan to improve better •solidwastecollectionanddisposalPhp 18.8 million •

Improve collection •route, increase collectionefficiencyPhp 93.7 million •

Total Estimated Financing Needs Php 24.4 million Php 137.1 million


Flood Control, Drainage and Dam Management Summary

TyphoonsOndoyandPepengwereextraordinaryeventsthatoverwhelmedthefloodmanagementanddrainageinfrastructureinMetropolitanManila,CentralandNorthernLuzon,respectively,astheprobabilityofoccurrenceofthetwotyphoonsexceededtheinfrastructure’sdesigncapacities.WhilethedamageonfloodmanagementinfrastructurewithinMetropolitanManilawaslimitedcomparedtothemassiveinvestmentsmade,Ondoyexposedseriousweaknessesintheoverallfloodmanagementanddrainagearrangements.

Damageoccurredonsectionsofovertoppedfloodwalls,whilethefloodwaterscausedsomedamagetoanumberofhydraulicstructures.ThetotaldamagetothefloodmanagementanddrainageinfrastructureinMetropolitanManilaisestimatedatPhp238.0million.Meanwhile,Pepengcauseddestructionanddamagetofloodembankmentsinruralareas,especiallyalongtheAgno,Laoag,Cagayan,andBucaoRivers.Althoughthefloodsgeneratedbythetyphoonexceededthedesignleveloftheembankments,whichwasboundtoleadtoflooding,thetyphoonalsoexposedthevulnerabilityofinfrastructureresulting,inparticular,fromlackofmaintenance.Manysectionsofembankmentswerebreachedandothersweredamagedtosuchanextentthatfutureprotectioncannotbeguaranteed.ThetotaldamagetofloodembankmentsalongthefourrivershasbeenestimatedatPhp479.0million.TheoverallestimateddamagecausedbyOndoyandPepengisPhp716.9million.MostofthedamageoccurredinRegionIandtheMetropolitanManila,whilethedamageinRegionIV-Awasnegligible.Directlosseswerenotestimatedsincethesehavebeentakenintoaccountbyothersectors.

Severalmedium-termactivitiesareproposedduringthethree-yeartimeframefrom2010to2012.PriorityactivitiestobeundertakeninMetropolitanManilainclude:(i)theimplementationofanurgentprogramofrehabilitationandimprovementofkeyfloodmanagementanddrainagesystemstoreturntheinfrastructureatleasttofulldesignconditions;(ii)thefurtherdevelopmentandimplementationofacomprehensivemonitoringandwarningsystem,aswellasafloodforecastingsystem;(iii)thedevelopmentandimplementationofappropriateinstitutionalarrangementsforthemanagementofwaterwithintheoverallcatchmentarea,includingtheMarikinaandPasigRivers,andLagunaLake;and(iv)preparationofacomprehensiveupdateofthe1990masterplantoprioritizefuturedevelopmentsaimedatincreasingthesafetyagainstfloodeventsuptoalevelappropriateforMetropolitanManila,includingLagunadeBay.Thetotalestimatedfundingrequirementsforthismedium-termprogramarePhp5.5billion.

ForCentralandNorthernLuzon,aprogramofriverbankstrengtheningisproposed,initiallyfocusingonseverelydamagedsectionsthathavetobereconstructedbeforethe2010floodseasonstarts.ThetotalestimatedprojectcostisPhp2.5billion.Themedium-termprioritiesneedtobecomplementedbybroaderinstitutionalandpolicydevelopments.Beforeproceedingwithlargecapitalinvestments,theupdateofthemasterplanwithacleardevelopmentobjective,anoverallinfrastructuralandinstitutionaldevelopmentplanthatisprioritized,andfeasibility-levelcostestimates.Inaddition,coordinationamongrelevantinstitutionalagenciesshouldbeenhanceduntilinstitutionalarrangementsforoverallwatermanagementarestrengthened,forexamplethroughasinglewatermanagementagency.Thetimeframeforapriorityprogramofstagedinfrastructuralimprovementsisestimatedtobearound20yearsandthecostisestimatedatnotlessthanPhp50-75billion.

Non

ie R

eyes


Background

ManyareasinandaroundMetroManilaaredesignatedasfloodprone,withinsufficientprotectionagainstfrequentandlong-lastinginundation.ThisespeciallyincludesareasaroundtheMarikinaRiverandsomeofitstributaries,andthoseadjacenttoLagunadeBay.Promptedbythewidespreadinundationsof1972,thegovernmentlaunchedamajorfloodmitigationprogram,constructingseveralstrategicallylocatedpumpingstations,twofloodgates,andfourconveyancedrainagechannelsduringthe1970s.By1980,constructionoftheManggahanFloodwaybegan,linkingtheMarikinaRivertoLagunadeBaytodivertfloodwatersoftheMarikinaRivertowardsthelakeandtousethelakeasatemporaryretardingbasinintimesofintenserainfallandriverflowswithinthebasin,andtoprotectthecoreareaofMetroManilafromfloodingofthePasigRiver.TheflowofwateroutofLagunaLakehasbeenregulatedthroughoneoutletonly,theNapindanChannel,whichhasacapacitythatismuchlowerthantheManggahanFloodwayandisaseriousconstrainttotheabilitytocontrolLagunaLakewaterlevels.Inanycase,therewouldbelimitstothereleaseofwaterfromLagunaLakethroughtheNapindanChannel,asthePasigRiverhasalimitedcapacityandalsohastoconveywaterfromtheMarikinaandSanJuanRivers.

Sinceitscompletioninthelate1980s,theManggahanFloodwayhaskeptfloods,exceptforshort-durationones,awayfromthewesternpartsofMetroManila,andassuchhasbeensuccessful.However,ithasexacerbatedtheannualfluctuationofthewaterlevelofLagunaLake,whichnowhasclosetothreemillionpeoplelivingalongitsfringes.Moreover,theflooddesigncapacityintheMarikinaRiversystemisfora30-yearreturnperiod,whichismuchlessthanthefloodintensityresultingfromOndoy.TheexistinginfrastructurethatisexpectedtoprotectManilaandpopulatedareasaroundLagunaLakeisincompleteandhasnotbeenproperlymaintained—siltanduncollectedsolidwasteclogriversanddrainsfurtherrestricttheflowofwaterresultinginreducedcapacitytoprotectpeopleandinfrastructure.Asaresult,theimpactofthefloodsgeneratedbyOndoyhadsevereconsequencesforpeoplelivingneartheMarikinaRiver,thoseinotherlowlyingareaswithinsufficientdrainagecapacity,andthoselivingadjacenttoLagunaLake.

Floodprotectioninfrastructureinruralareasisexpectedtoprotectlifeandpublicandprivatepropertiesinpopulatedareas(villagesandmunicipalities)alongriversandstreams,aswellasareasofeconomicvalue,suchasirrigationschemes.TypicaldesignparametersinthePhilippinesforruralfloodprotectionembankmentsaimtocontendwithriverfloodingwithareturnperiodof10to30years,whichisarelativelylowlevelofprotectiongiventhehighprobabilityoffloodinginmanyruralareas.PriortoPepeng,sectionsofembankmentshadalreadybecomevulnerableinmanyplacesmostlyduetodisrepair.

Damage and Losses

Damage caused by Ondoy

Ondoywasunusualinthattheresultingfloodvolumeswerestatisticallyassociatedwithahistoricaloccurrenceofoncein180years,resultinginriverflowsandinundationofurbanareasthatwerewellabovetheexistingdrainageandrivercapacities.TherainfallresultedinflowsintheMarikinaRiverestimatedatabout5,500m3/sec,whilethedesignflowcapacityoftheriverisaround3,000m3/sec,whichcorrespondstoafloodwithareturnperiodof30years.DuringOndoy,theflowratesexceededthedesignflowforoverfourhourswhichresultedinexcessivefloodingofareasespeciallyalongtheMarikinaRiver(Figure6).Thefloodingwasworsenedbythereducedcarryingcapacityofbothhigher-andlower-orderdrainsandriversduetolackofmaintenance(i.e.,insufficientdredgingofsiltsandcleaningofsolidwaste),andencroachmentofriverbanks,drainsandfloodways.Thelatteralso


putpeoplelivingalongthesestructuresatrisk.Inmanyareasthefloodingrecededwithinoneortwodays,buttherearestillareasthatcurrentlyremainflooded,especiallyaroundLagunadeBay.

Figure 6: Peak Flood Discharge in Marikina River

Source:NationalHydraulicResearchCenter,UniversityofthePhilippines

AsaresultofOndoy,thewaterlevelofLagunadeBayincreasedinonedayfromabout12.5mto13.9m,whichis1.4mabovetheaveragemaximumwaterlevelandwasamongthehighesthistoricallevelsrecorded.Thewaterlevelrecededtoaround13.5mduringthemonthafterOndoy,butwentupagainduetoadditionalinflowsfromthelake’scatchmentarea.Estimatessuggestitwilltakeafurthertwotofourmonthsfortheexcessvolumeofwaterinthelaketodrainout,dependingonthecarryingcapacityoftheNapindanChannelHydraulicControlStructure(NHCS).

WithinMetroManila,theactualdamagetofloodmanagementinfrastructureMetroManilawaslimitedcomparedtothesubstantialinitialinvestmentcost.Therewasovertoppingoffloodwallsthatcausedlocalizeddamage,whilethefloodwaterscausedsomesubmergencedamagetopumpingstationsandhydraulicstructures.ThedataondamageswereobtainedfromtheDepartmentofPublicWorksandHighways(DPWH)andtheMetroManilaDevelopmentAuthority(MMDA).SomedamagemayhaveexistedpriortoOndoy,buttheassessmentteamfounditdifficulttovalidatethis.ThetotaldamagetothefloodmanagementinfrastructureinMetroManilaisestimatedatPhp238million.

Damage caused by Pepeng

Pepengcauseddestructionanddamagetofloodembankments,especiallyalongtheAgno,Laoag,Cagayan,andBucaoRivers.Thetyphooneitherbreachedordamagedmanysectionsofembankments.Forexample,inPangasinan,36sectionsofvariousfloodcontrolprojectswereaffectedresultinginanaggregateof3.77kmofdikesbreachedandpartiallydamageddikesectionswithatotallengthof3.0km.TheassessmentteamreceivedinformationonbreachedanddamagedsectionsfromtheNationalDisasterCoordinatingCouncil(NDCC),whichhadcompiledtheinformationfromdataprovidedmainlybyDPWH.TheassessmentteamvisitedtheAgnoRiverBasintovalidatetheinformationprovidedandfoundthatthedamageestimatesincludesubstantialcoststoimprovetheinfrastructure.Thedivisionwasabout30percentforactualdamagesand70percentforneededimprovements.Thisratiowasusedforotherriverbasinsaswell.Inlightofthis,thetotaldamagetofloodembankmentsalongthefourrivershasbeenestimatedatPhp479.0million.

6000

5000

4000

3000

2000

1000

00 3

3 6 9 12 15 18 21

Hoursstarting8:00am,26Sept.2009

Levelof30-yr“design-basisflood”

Peak flood discharge computed 5,770 cu.m/s at 12NN

Discha

rge,cub

icm

eters/sec

RainfallIntensity,m

m/hou

r Hoursstarting8:00am,26Sept.2009

6 9 12 15 18 21

0102030405060708090

100

Hourlyrainfall(mm/hr)@ScienceGarden,QCStation,convertedbasedon448mmin12hours(usedinprelim.SWATCHhydrologicmodelwithappliedareareductionfactor=0.6.)Max hourly rainfall abt 90 mm/hr at 1AM.


QuestionshavebeenraisedabouttheroleofspillwayreleasesfromtheSanRoqueDam.AmajordamsuchasSanRoquechangesthehydrologicalconditionsinthedownstreamriver,usuallywithlessflooding,increasedsedimentationbroughtaboutbydownstreamtributaries,andgreateroccupationofflood-proneareaswithinvillages,municipalities,andcities.Thistypicallyincreasestheimpactofincidentalhighspillwayreleasesinariverwithreducedcarryingcapacity.Strongermonitoringandfloodwarningforecastingsystemsandbettermanagementofthedamduringthefloodeventcouldhaveperhapsreduceddownstreamfloodingtosomeextent.Becauseofthesignificantrainfallandrapidwaterlevelrisebehindthedam,thedamoperatorshadlittlechoicebuttoreleaselargevolumesofwaterfromthespillwaytoavoiddamageto—orevendestructionof—thedam.PAGASArainfallrecordsfromthefloodingeventsindicatethatveryhighrainfallanddamageswerereportedinthoseareaswithoutspillwayreleases.

Overall Damage and Losses

TheoverallestimateddamageisPhp716.9million.MostofthedamageoccurredinRegionIandNCR,whilethedamageinRegionIV-Awasnegligible(Figure7).Directlosseswerenotestimated,asthesehavebeentakenintoaccountbyothersectors.

Figure 7: Damage to Flood Control Infrastructure


GiventhevulnerabilityofMetroManilatoflooding,additionalprotectioniscriticalandwillrequireinstitutionalreform,comprehensiveplanning,andinvestmentinbothrestorationandnewinfrastructure.Theimperativepolicychoiceistodetermineanacceptablelevelofriskandprotection,asthiswilldeterminetheeconomicfeasibilityofsubsequentengineeringandfinancingchoices.Inthemediumterm,theexistingfloodmanagementanddrainagesystemshouldberestoredtoafullyoperationalcondition,accompaniedbyfundingforregularmaintenanceandtheestablishmentofreal-timemonitoringandearlywarningsystems.Anewinstitutionalstructure,buildingontheexistingframework—withresponsibilityformanagingfloodsanddrainageintheentirecatchmentareaofMetroManilaincludingLagunadeBay,andwiththeauthorityandmeanstoenforceagreedpoliciesandplans―wouldgreatlyfacilitatefuturefloodmanagement.Ariskassessmentstudyfortheentirebasinisneededtoupdatetheexistingmasterplanandtoprepareacomprehensivedevelopmentprogram.Longerterm,aspartofthedevelopmentprogram,additionalinvestmentwillbeneededtoretainwaterupstream,facilitatetheflowofwaterthroughthesystem,andmaintainLagunadeBayatapre-determinedlevelasinformedbytheriskassessment.ThiswouldbeexpectedtoincludeanewfloodwaytolinkLagunadeBaytoManilaBay.

Dam

age

(in P

hp m

illio

n)

250

200

150

100

50

0

CAR I II III NCR IV-A V


Metro Manila and Surrounding Areas

Evenwithafullyoperationalfloodmanagementanddrainagesystem,therainfallgeneratedbyOndoywouldhaveresultedinfloodinginsignificantpartsofthecity.Therainfallwassoseverethatthedrainageandriversystemcouldnotcopewiththesuddenvolumeofwater.Nevertheless,theimpactofOndoywassodamagingandlastingthatithasrenewedfocusonanumberofissues:

• DeforestationintheuppercatchmentoftheMarikinaRiver,resultinginerosion;• Accumulationoferodedmaterialinthelowerreachesoftheriversystem,causingsiltingof

riversandstreams,whichisexacerbatedbylargedepositsofsolidwasteintheriversandstreams;duetoalackofregularrivercleaning,thecarryingcapacityoftheriversystemhasbeensubstantiallyreduced;

• Reducedabsorptivecapacityofthesoilduetorapid,unplannedurbanizationthatincreasesshort-durationfloodevents;

• InadequatefloodmanagementinfrastructureresultinginaninsufficientlevelofprotectionofMetroManilathatisthecountry’smainengineofeconomicgrowth;

• Flawedlanduseandurbanplanning,resultinginbothlegalandillegalsettlementsinhigh-flood,disaster-hazardareas;

• Inadequatemaintenanceofexistingfloodmanagementinfrastructure,includingdrainsandfloodwarningsystems;

• Groundwaterextractioncausinglandsubsidence;• Thepotentialforclimatechangeandsealevelrisetoexacerbatetheproblemofflood

managementanddrainage;and• Fragmentedinstitutionalarrangementsforfloodmanagement.

Medium-term Needs

Severalmedium-termactivitiesareproposedforMetroManiladuringathree-yeartimeframefrom2010to2012.ThetotalestimatedfundingrequirementsarePhp5.5billion.Untilrevisedinstitutionalarrangementsareestablished,theproposedactivitieswouldbemainlyimplementedbyMMDAinclosecooperationandcoordinationwithDPWH,LagunaLakeDevelopmentAuthority(LLDA),andotheragencies.

• Asanurgentactivity,returntheexistingkeyfloodmanagementanddrainagesystemswithinMetroManilatofullyoperationalcondition(e.g.,throughde-cloggingofdrainagechannelsandoutlets);dredgingandimprovementofthePasigandMarikinaRiversandtheirtributaries,asneeded,andrepairstocontrolstructurestogetthefloodmanagementsystembacktodesignstandards;and,enablingamoreeffectivedischargeofthefloodwaters.Currentdesignparametersforriverfloodsrelatetoarainfalleventofoncein30yearoccurrence.Thisisabouthalforone-thirdofthelevelofoccurrencethatanareasuchasMetroManilarequires,consideringthe large public and private developments that have taken place since the design parameters wereestablished.However,theproposedworkswill,asaminimum,protectthepopulationandeconomic,private,andpublicinfrastructureagainstlower-levelfloods(Php3.7billion);

• Securesufficientfunds(andemergencymaintenanceequipment)forregularmaintenance.MaintenancefundswillhavetobegeneratedbyMMDA,withfinancialsupportfromLGUsandcentralgovernment.Itisexpectedthatmostofthemaintenanceworkswillbetenderedout,buttheremaybearequirementforMMDAtohavecertainpiecesofmodernemergencymachineryandequipmenttobeabletorespondquicklytourgentmaintenanceneeds.(AboutPhp1.2billionshouldbesufficienttoprocureemergencymaintenanceequipment);


• Anassetmanagementsystemshouldbedevelopedtoestablishsystem-specificoperationandmaintenance(O&M)needsthataimtoensuresufficientfundsareavailablefordedicatedusebyMMDAforallO&Mneedstobemet.Assetmanagementsystemsdetermineinasystematicwaythemaintenanceandrelatedbudgetneeds,bothannuallyandoverthelongerterm,andmonitorinatransparentmannertheactualversusplannedmaintenanceexpenditures,whichcouldalsobeeasilypubliclydisclosed.Theresultsoftheassetmanagementplan(i.e.,afullycostedmaintenanceplan)canbeusedaspartoftheannualbudgetrequest.(ThedevelopmentoftheassetmanagementsystemisestimatedtocostPhp75.0million);

• Reestablishand/ordevelopreal-timemonitoringandearlywarningsystemstoprovidethenecessaryleadtimeforcrucialdecisions.DevelopmentofManagementInformationSystem(MIS)andappropriatefloodforecastingsystems(Php250.0million);

• Establishonemanagementagencyresponsibleforfloodmanagementanddrainageintheentirecatchmentarea,includingLagunadeBay,i.e.,establishasinglewatermanagementagency.Theagencyneedsaclearmandaterelatedtoplanning,implementation,operation,andmaintenance(Php125.0millionfortheset-upandequippingofsuchanagency);and

• Carryoutariskassessmentstudyfortheentirebasinareaandupdatethemasterplanoftheearly1990stocomeupwithacomprehensivedevelopmentprogram,ratherthanadhocprojectsthatarenotfullycoordinatedandintegrated(Php100.0million).

Intermsofruralfloodinfrastructure,amedium-termprogramofriverbankstrengtheningalongriversinCentralandNorthernLuzonisproposedtoimproveprotectionofpeopleinvillagesandmunicipalitiesandeconomic,privateandpublicinfrastructure.Theurgentfocuswouldnotonlybeondestroyedanddamagedembankmentsections,butalsoonnearbysectionsthathaveweakenedasaresultofinsufficientmaintenanceovertime.Theprogramshouldembracetheconceptof”buildingbackbetter”toincreasethefloodreturnperiodtoadesirablelevelofaround50years,althoughthismayvarybyriverbasin.Itwouldstrengthentheembankmentsandimprovetheirstructuralintegrity,whichmayinvolveliningwithRenomattressesorothersuitableprotectionmaterials.TheestimatedcostofthisprojectisPhp2.5billion.Theprogramshouldbeconsideredasthefirstphaseofaprogramtostrengthenriverfloodembankments,astherearemanyembankmentsthatrequireimprovements.ThemainimplementingagencyfortheprojectwouldbeDPWH,withcooperationfromLGUs,asneeded.

Besidesinfrastructuraldevelopments,theprogramwouldalsofocusonfloodmapping,developmentofemergencyresponseplans,installationofearlywarningsystems,updatinganddevelopmentoffloodforecastingsystems,andconductingawarenessprograms.Moreover,itisproposedtocarryoutastudyondevelopingRiverBasinCouncilsandRiverBasinOrganizationstostreamlinethewaterandfloodmanagementofentireriverbasins.

Table 47: Medium-Term Reconstruction Needs (in Php million)

Sub-sector

Public Sector Needs


Short-term

Medium-term

Short-term

Medium-term

Short-term

Medium-term

Flood Control, Drainage and Dam Management

- - - 8,050.0 - 8,050.0


Long-term Needs

Themedium-termneedsarenecessarybutnotsufficienttoensureanacceptablelevelofsafetyforMetroManila.Dependingonthegovernment’spolicydirectionwithregardtofloodprotectionlevels,additionaldevelopmentswouldbedeterminedbytheupdatedmasterplan.Ratherthanpursuinguncoordinatedcapitalinvestmentinitiativesintheshort-term,itwouldbeimportanttocompletethemasterplanwithacleardevelopmentobjective,anoverallinfrastructuralandinstitutionaldevelopmentplanthatisprioritized,andfeasibility-levelcostestimates.Toguidetheprocessofdevelopingandtheimplementingthemasterplan,institutionalcoordinationamongthemainagenciesresponsibleforwatermanagementinthearea(MMDA,DPWH,LLDA,LGUs,etc.)isnecessaryuntilasinglewatermanagementagencyisestablished.

Anotherrequiredreformwouldbetomovefromproject-basedtoprogram-basedinitiativestoensurethatshort-tomedium-termprioritiesareinformedbyandconsistentwithlong-termobjectives.Forexample,currentproposalstodeveloparing-dikearoundLagunadeBayanddredgingofthelakemaynotturnouttobeprioritiesinthelong-runoncetheresultsofanupdatedmasterplanhavebeencompleted.

Thetypesofprojectsthatmaybeincludedinalong-termdevelopmentprograminclude:

• Upstreamcascadeofdamsorretainingbasinstocapturefloodwater;• Riverimprovementtoincreaseflowcapacities,includingriverstraighteningtoincrease

velocitiesandflows;• Additionaldikestoprotectlow-lyingpopulatedareaslinkedtoadditionalpumpingstations;• AdditionaloutletcapacityfromLagunaLaketomaintainthelakeatapre-determinedlevel;• Uppercatchmentrehabilitationandmanagement;• Developmentoffloodmappingandemergencyresponseplans,linkedtotheoverall

developmentprogram.Conductregularawarenesscampaigns.Basedonfloodmapping,appropriatelanduseandurbanzoningcanbepreparedbasedonfloodrisks.

Thetimeframeforapriorityprogramofstagedimprovementsisestimatedtobe20yearswithcostsatapproximatelybetweenPhp50andPhp75billion.Thereareanumberofsafeguardissuesrelatedtocertaindevelopments,includingtheissueoflandacquisitionandresettlementofpeople.Suchsafeguardandotherissuesshouldbetakenintoaccountduringtheupdatingofthemasterplanandtheassessmentandprioritizationofprojectproposals.


Recovery Framework: Flood Management and Control



Theoutcomeforthemedium term is to improvethesafetyand operational performanceofexistingfloodmanagement and drainage systems by returning them as a minimum to original designconditions.

The actual damage o caused by Ondoy to floodmanagementanddrainageinfrastructurewithinMetroManilawaslimited,butOndoyexposedseriousweaknessesintheoverallfloodmanagementsystem.

Damagetofloodo embankments caused by Pepeng in Central and Northern Luzonwaslocalized,butexposedthevulnerabilityoftheinfrastructurecausedespeciallybylackofmaintenance.

Priority activities to o be undertaken to achieve the desired outcome:forMetroManila(i)commenceaprogramofrehabilitation and improvementofkeyfloodmanagementand drainage systems;(ii)developand implement a comprehensive monitoring and warningsystem;(iii)develop appropriate institutional arrangementsforthe management ofallfloodandcontrol systems withintheoverallcatchmentarea;and(iv)commencetheupdateofthemasterplanthatwillprioritize the need futuredevelopmentstoincreasethesafetyagainstfloodeventsup to an appropriate level.

For Central and o Northern Luzon commence a programofriverbank strengthening, initiallyfocusingonseverely damaged sections that have to be reconstructed beforethe2010floodseasonstarts.

Priority activities to be o undertaken to achieve the desiredoutcome:forMetroManila(i)continuetheprogramofrehabilitationandimprovementofpriorityfloodmanagementanddrainagesystems;(ii)implement the agreed institutional development arrangements;and(iii)complete the master plan update.

For Central and Northern o Luzon continue the program ofriverbankstrengthening.

Thecombinedfinancingo needsforboththepriorityactivities up to December 2010andtoDecember2012are Php 5.5billion for Metro Manila and Php 2.5 billion for Central and Northern Luzon.


Transport SectorSummary

Damage and losses due to typhoons Ondoy and Pepeng weregreatestonroadinfrastructure,whilethereportedimpactonothermodesoftransportwasminimal.Inlow-lyingareasinMetroManilaandNorthernLuzon,andcommunitiesaroundLagunaLake,manyroadswereflooded–insomeplaces,impassableforextendedperiods.Alongmountainousanddifficultterrain,mostprominentlyinBenguet,severedamagewascausedbylandslides,rockfalls,anddestructivewaterflow,whichledtotheclosureofcertaincorridorsandcostlydamagetostructures.Severalbridgesalongmajorriversandwaterwayswerewashedaway.Economiclossesresultedfromincreasedvehicleoperationcostsandtraveldelaysasroadswereclosedand/oralternaterouteshadtobetaken.RoadsdamageandlosseswereestimatedtoreachPhp7.5billion,comprisedofPhp2.6billiondamagefornationalroads,Php3.9billiondamageforlocalroads,andPhp1billionintransportlosses.

TheDPWHandLGUsprioritizedroadclearingandcreatingdetours,whichmostlyinvolveearthwork,toimmediatelyallowmovementofpassengerandgoodstraffic.InthecaseofBuedBridgeinPangasinan,atemporarysteelstructurewasinstalledbyDPWHwithinthreeweeks.However,inmanysectionswithseriousdamagetostructures,morepermanentinterventionshaveyettobedesignedandundertaken.Sectionswithdamagedstructuresthathavebeenopenedtotrafficneedtobecloselymonitoredthroughregularinspectionforsafetyrisks.Regularadvisoriestothepubliconroadconditionsincriticalareaswouldhelpinformtravelplans.

Majorriskstotransportinfrastructurewereexposedbythetyphoons.Indifficultterrain,likeintheCordilleraregion,newpermanentstructureswouldhavetobedesignedforgreaterreliability,suchasthoseforslopeprotection,embankments,bridges,drainage,etc.Thiscouldincreasethecostofroadprojects,thustheneedtoconsideralternativeoptions,includingperhapsthestudyofnewalignmentsorroutes.Existingalignmentswouldalsoneedtobere-investigatedintermsofvulnerabilitytothesurroundinggeologyorhydrology,sothatremedialmeasurescanbeidentified.ReconstructionrequirementsareestimatedtobeaboutPhp2billionintheshort-termandPhp9.8billionoverthemedium-term.Theissueofsustainablefinancingfordisasterresponseneedstobestudied.Moreover,toenableimmediateresponseofDPWHandLGUsintimesofdisaster,adependablesourceofemergencyfinancingforimmediaterestorationworkswouldneedtobeputinplace.

Background

TheroadnetworkinthePhilippinescomprisesnationalroadsmanagedbytheDPWH,localroadssupervisedbydifferentLGUs,andseveraltollways.Exceptforbarangayroadsforwhichacompleteinventoryisstillbeingundertaken,theroadnetworkcanbegenerallycategorizedasfairtogoodrelativetoitscondition,withmaintenanceactivitiesfornationalandlocalroadsundertakendependingontheavailabilityoffunds.Theroadnetworkservesastheprimarymeansoftransportationofpeopleandgoodsinthecountry.

National Roads

Thenationalarterialroadsconsistof15,663kmofroadsthatprovideaccesstoimportantcentersandareasvitalforregionaldevelopmentandemergencies.ItconsistsoftheNorth-SouthBackbone

Non

i Rey

es


(5,246km),East-WestLaterals(2,965km),andotherroads(7,452km).About84percentofthenationalarterialroadsarepaved,ofwhicharound45percentneedstoberehabilitated.Thenationalsecondaryroads(NSR)complementthenationalarterialroads,andconsistof13,987km.Only61percentispaved,ofwhich39percentneedstoberehabilitated.Thereare7,543bridgesalongthenationalroadsconsistingof6,165concrete,565steeland818timber/baileybridges.

Other Transport Infrastructure

Thelocalroadnetworkisestimatedtobeabout172,000km,thelargemajorityofwhichisaround120,000km(69percent)ofbarangayorvillage/farm-to-marketroads.Therestareprovincialroads(18percent),cityroads(8percent),andmunicipalroads(5percent).Oftheprovincialroads,approximately9,345kmarepavedand21,465kmunpaved,and115kmunknown.Bysurfacecondition,64percentisconsideredgoodtofair,21percentpoortobadand15percentunknown.Therearealsoabout8,399kmofcityroads,4,859kmofwhichispaved.Bysurfacecondition,53percentisconsideredgoodtofair,whiletherestarepoortobad,orunknown.Inaddition,therearesixtollwaysoperatinginthecountry:NorthLuzonExpressway(NLEX)(84km),SouthLuzonExpressway(SLEX)(77km),MetroManilaSkyway(10km),Manila-CaviteExpressway(7km),Subic-Clark-TarlacExpressway(SCTEx)(94km),andSouthernTagalogArterialRoad(STAR)(42km).

Inadditiontoroadinfrastructure,thePhilippinesalsohasanetworkofairports,waterports,andrailwaytransports.TheCivilAviationAuthorityofthePhilippines(CAAP)overseessixmajorairportslocatedalongtheaffectedprovinces,whichhavenoreportedsignificantdamageaccordingtotheDepartmentofTransportationandCommunications(DOTC).Thereareninemajorportslocatedintheaffectedprovincesnamely:AparriPort(Cagayan),BataanPort(Bataan),BatangasPort(BatangasCity),BrookesPointPort(Palawan),CalapanTerminalPort(OrientalMindoro),PortIrene(Cagayan),LegaspiPort(Albay),ViracPort(Albay)andTabacoPort(Albay),whichhavenotreporteddamagestotheDOTC.TheDOTCreportedthattherewerenodamagesontheMetroRailTransportSystem(MRT).MinordamageandrevenuelosseswerereportedforthetwoLightRailTransitSystem(LRT)lines.

Immediate and Ongoing Relief and Recovery Efforts

DPWHDistrictEngineeringOfficesandProvincialEngineeringOfficesofaffectedLGUshavebeenimplementingthefollowingreliefandrecoverymeasuresforroads:

Types of Damage Immediate Relief and Recovery Efforts

Landslide ImmediateremovaloflandslidesEroded/washedoutshouldermaterials BackfillingofshoulderwiththerequiredmaterialsEroded or collapsed embankment Backfillingwiththerequiredmaterials

Sand bagging to prevent erosion

Collapsed/erodedbridgeapproach Sand bagging Backfilling Provisionofwarning/precautionarysigns

Roadslip/roadcut Provisionofwarning/precautionarysigns Constructionofdetourroads

Clogged drainage structures Clearingofdebris

Washed out bridges Construction/installationoftemporarybridgeslikeBaileyBridge


Damage and Losses

BasedonthedataprovidedbyDPWHandLGUs,throughtheDepartmentofInteriorandLocalGovernment(DILG),themostcommontypeofdamageonnationalandlocalroadsinclude:landslides,eroded/washedoutshouldermaterials,erodedorcollapsedembankment,erodedslopeprotection/abutmentprotection,collapsed/erodedbridgeapproaches,roadslip/roadcut,cloggeddrainagestructures,washedoutbridges,damagedroadandbridgesettlements,anddamagedculverts.49

Similarly,theestimatedcostsofdamagewerepreparedbyDPWHDistrictEngineeringOfficesandsubmittedtotheDPWHBureauofMaintenance(BOM),andbytheProvincialEngineeringOfficesofLGUs.ProgramofWorks(POW)thatwerepreparedbythedifferentDistrictOfficesofDPWHandProvincialEngineeringOfficesaccompaniedthedamageestimates,andasmallsampleofthesePOWswasprovided.Oftentheestimatedcostswerebasedonhigherstandardofdesignorhigherlevelofimprovement,thantheconditionpriortothetyphoon.Insomeinstances,damagefromaprevioustyphoonorsomeotherdisaster,wasreportednottohavebeenactuallyaddressed,andassuchthecurrentestimateoftherequiredinterventionreflectsdamageaccumulatedovertimenotonlyfromthecurrenttyphoonsbutalsofromearlieroccurrences.Inmoreseverelyaffectedregions,wherethereisahighernumberofbadlydamagedstructures,itwasobservedthatsomeminordamageswerenolongerincludedinthereports,andattentionwasfocusedonmoremassivedamagesrequiringmorecapital-intensiveworks.

DamagesonnationalandlocalroadswereestimatedtobeaboutPhp2.6billionandPhp3.9billionrespectively.Theseincludedamagesonthepavement,bridges,shoulders,slopeprotection,drainageandotherappurtenantstructures.(Table48)

Table 48: Summary of Roads Damage and Losses (in Php million)

Damage Losses Total

National Local

2,596.7 3,920.4 994.7 7,511.8

TheprovinceofBenguetsufferedthegreatestdamagetoroadinfrastructurewithatotalestimatefornationalandlocalroadsofaboutPhp1.1billion.ThiscoverstheBaguio-Bontocroad(Halsemahighway),andthethreeaccessroutestoBaguioCity.Pangasinan,wheremanybridgesweredamaged,includingBuedBridge,reportedanestimateddamagecostofPhp1billion,andLaUnionreporteddamageestimateofPhp729million.Byregion,RegionI,CARandRegionIIIreportedthehighestestimatesofdamagesforbothnationalandlocalroads.(Table49)

Transportlosseswereestimatedastheincreaseinvehicleoperatingcosts(VOC)whenroad-usershavetouseanalternaterouteorincurtraveldelaysbecauseofinaccessibilitytoordamagetotheroadsinfrastructure.Inthecaseoftollways,transportlosseswereestimatedaslossesinrevenueasaresultoflowerutilizationofthefacilityduringandafterthetyphoon.

TheestimationoflossesforNationalRoadswascalculatedusingaworksheetdevelopedbytheDPWH-FeasibilityStudies-ProjectManagementOffice(PMO-FS).Themajorparametersinestimatingtransportlossesarethefollowing:AverageAnnualDailyTraffic(AADT)acquiredfromRoadTrafficInformationApplication(RTIA)ofDPWHPlanningServices,SummaryofTrafficData;VOCbyRoad

49 Relevantsectorreportsprovideadditionalinformationondrainagesystems.


Condition2008LevelfromDPWHPMO-FS;andpavementcondition.InthecomputationofLosses,threecaseswereconsidered,thatweredeemedthemostcommoncasesthatoccurredduringthedisaster:(a)RoadorBridgeClosurewithAlternateRoute:(b)RoadorBridgeClosurewithoutAlternateRoute,and(c)RoadorBridgewithOne-LanePassable.

Table 49: Damage and Losses in Transport Sector, by Region

Region Damage and Losses

CAR 1,805.91

NCR 142.0

I 2,177.7.0

II 599.0

III 1,2234.2.0

IV-A 804.6.0

IV-B 157.1.0

V 508.1.

NLEX 82.8

Total 7,511.8

IntheabsenceofreadilyavailabletrafficdataforLocalRoadswhichisanimportantparameterincomputingfortransportlosses,itwasestimatedthattransportlossesatlocalroadsinagivenprovincewas20percentoflossesalongtheNationalRoadsinthatprovince,takingintoaccountlikelyratiosoftrafficandVOCsbasedonroadconditionbetweennationalandlocalroads.

Impacts on the External Sector and Fiscal Budget

Asintypicalconstructionactivities,therestorationandreconstructionintheroadssectorwillrequireitemsofworkwithaforeigncostcomponentsuchasrebars,cement,asphalt,equipmentandfuel.Basedondatafromcompletedprojects,theforeigncomponentsoftheseitemscouldbeashighas50percentofprojectcost.Thus,forshort-termmeasures,theforeigncostcomponentscouldbeashighasPhp1billion,whileformedium-termmeasures,theycouldreachaboutPhp5billion.

ThenationalroadsprogrammanagedbytheDPWHisfundedunderthenationalbudget.Thefiscalrequirementofshort-termmeasurestobeimplementedbyDPWHisestimatedtobeintheorderofPhp780.0millionandofmedium-termmeasures,Php3.9billion.


Becausetheroadsnetworkislaidoutoveralargegeographicalarea,itispronetodisastersliketyphoonsorfloods,andtheseverityofthedamagecouldvarywidelyfromonelocationtoanother.Itisimportanttoplanandprioritizetherecoveryandreconstructionactivitiesinordertofirstrestoreeconomicactivitiesintheaffectedareas,thentorebuildthedamagedstructurestoapermanentconditionwithadesignbenefitingfromabetterunderstandingofthegeologyandhydrologyatthesiteandmakinguseofrecentdevelopmentintechnology,andeventuallytoensurethatvulnerabilitytosimilardisastersinthefutureissignificantlyreduced.Thissetofactivitieswouldbemadeupofshort-term,medium-termandlong-termmeasures.


Table 50: Recovery and Reconstruction Needs (in Php million)

RegionRecovery Reconstruction Total

National Local National Local National(Public) Local(Public)

Total 779 1,176.2 3,895.2 5,880.8 4,674.2 7,057

Grand Total 1,955.2 9,776 11,731.2

Thefinancialrequirementforshort-termactivities,someofwhichhavealreadybeenimplemented,isestimatedatbetween25-35percentoftheestimatedcostofdamageorreplacement,orashighas Php2billion.Theseactivitiescannormallybecompletedoverashortperiod,notexceedingsixmonths.

Roadsafetyinspectionsincriticalareasshouldberegularlyconductedtoensurethatpartiallydamagedroadsanddetours,andothertemporarystructureswheretrafficisallowedcanstilladequatelyprovidecapacity.Precautionarymeasuresshouldbeadoptedandstrictlyenforcedtoavoidaccidents.Asapublicservice,up-to-dateinformationontheconditionsofroadsshouldbedisseminatedwidelyforthebenefitoftravelersandbusinesses.

Basedontheconceptof“buildingbackbetter”,themainobjectiveofmedium-termactivitiesormeasuresisthereplacementorreconstructionofassetsthatweretotallyorpartiallydamagedbythedisaster.Thesemeasureswouldbringtheconditionsofroadsassetstothepre-disasterlevelorahigherlevel,asnecessary.Thestructuresincludepavement,bridges,slopeprotection,embankments,shoulders,drainagestructures,andfootbridges.Thefinancialrequirementsforthesemeasuresareestimatedataround150percentoftheestimatedcostofdamages,orashighasPhp9.8billion.

Someofthemajorsectionsandrelatedfacilitiesalongthenationalroadsthatwouldrequiremoredetailedstudiesandsignificantinvestmentsareasfollows:BuedbridgeinPangasinan,Baguio-BontocRoad(HalsemaHighway)inBenguet,MarcosHighway,NaguilianRoadandKennonRoadinBenguet,ManilaNorthRoad,Santa,IlocosSur(seawall/shoreprotection),ManilaEastRoadinSiniloanandFamy,Laguna(subjectedtoextendedflooding),Marikina-InfantaRoad,andBongabon-RizalRoadinNuevaEcija.

Theobjectiveofthelong-termmeasuresistomitigatetherisksoffuturedisasters.Theserecommendedmeasuresincludethefollowing:detailedengineeringstudieswithadetailedassessmentofgeological,hydrological,structuralandotherrelevantaspects;assessmentandupgradingofstandards,codesandspecificationswithfollow-upactivitiestoensureadoptionatlocallevels;strictenforcementofupgradedcodes,standardsandspecifications;qualitystandardsfortheimplementationofreconstructionactivities;appraisalofvariousalternatealignmentsorroutesalongcriticalareas;riskassessmentsforexistinginfrastructureincriticalareas,andidentificationofremedialmeasures;inclusionofdisasterrisk-managementmeasuresinnewprojects,mainstreamingdisasterriskmanagementinDPWH/LGUprojects,andcapacity-buildingactivities;capacity-buildinginLGUsandtransportagencies/firmsingeneralforcollectionofdataondamageandeconomiclosses;andcapacity-buildinginDPWH,LGUs,andothertransportfirms/agenciesfordisasterresponseforimmediaterestorationactivities.

Itisquiteimportanttoassesswhethertheresponsibleagenciesinthefield,likeDPWHRegional/DistrictOfficesorlocalengineeringofficesofLGUs,havesufficientfinancingresourcestorespondtotheimmediaterequirementsinapost-disasterscenario.ConcessionalloansfromagovernmentinstitutionareavailableforLGUsforemergencyactivities,butthereispreferenceforgrantsformajorcapitalinvestments.Additionalstudiesmayhavetobeundertakenincoordinationwithoversight


agenciestocomeupwithrecommendationsonsustainablesourcesofemergencyfinancing.Fieldofficescouldbenefitfromexplicitguidelinesandprotocolsforfinancing,procurement,andimplementationtoenablethemtorespondappropriatelyandurgentlytodisastersinthefuture.Suchguidelines/protocolsshouldfacilitateemergencyresponsewithoutsacrificingcontrolsforaccountabilityandquality.Sharingofinternationalexperienceonfinancingemergencyresponseatnationalandlocallevelscouldhelpgovernmentinidentifyingoptions.


Implementationoftheshortandmedium-termmeasuresinvolvingcivilworksistheresponsibilityofDPWHandLGUs.Likewise,capacity-buildingactivitieswouldbenefitDPWHandtheLGUengineeringoffices,andwouldneedtobespearheadedbythem,andinthecaseofLGUsthesupportofDILGwouldbeimportant.Reviewingandupdatingguidelinesandprotocolsforemergencyworks,onfinancing,procurementandimplementation,wouldrequireconsultationamonglineandoversightagencies.Policydiscussionsonnewsourcesofemergencyfinancingshouldalsoinvolveoversightagencies.

Recovery Framework: Transport Sector



Damaged roads and bridges are restoredtoallowsafe,economical,andexpeditiousmovementofpersons and goods withimprovedreliability in case ofdisaster

National and local roads and bridges suffereddamagedfromdestructive waterflowswhichcausedflooding,landslides, rockfall,erosion, scouring,etc.Economic losses resulted mainlyfromincreased vehicle operating costs and traveldelays.

Civil works

Clearingofroadsobstruction,constructionofdetoursorsingle-lanepassage;restorationofroadway,shoulderandslopeprotectionwork,bridge approach, abutment protection andscourprotectionworks;installationoftemporarybridges

Financing needs : Php 2 billion

Safety and public service

Regularsafetyinspectionsondamagedstructureswhichareopentotrafficandpublic advisories on road condition

Project preparation

Prepareplansforimplementationofreconstructionofstructurestotallyorsignificantlydamaged;Identificationoffundingsourcesforreconstructionprojects

Policy

Start consultations on sustainable sourcesofemergencyfinancing,andonguidelines/protocolsonimplementationofrestorationactivitiestofacilitatetimelyresponsewithadequatecontrols

Civil works

Preparationofdetaileddesignforreconstructionofdamagedroadsand bridges, slope protection, drainage,etc.

Implementationofreconstructionprojectsforroadsandbridges,taking into account available technologyforstrongerslopeprotection, increasing hydraulic capacityofvariousstructures,etc.

Financing needs : Php 9.8 billion

Capacity-building

Institutionalizedatacollectionofdamageandlossesaftereverydisaster in LGUs and transport agencies/firms;strengthenagencycapacityforrestorationandreconstruction activities

Long-term measures

Prioritizeactivitiesforthelong-termandprepareimplementationplans:detailedengineeringwithmoreintensive geologic and hydrologic studies;reviewexistingalignmentson geology and hydrology issues;mainstreamdisasterriskmanagement;upgradecodes,standardsandspecifications,etc.


Telecommunications

Summary

Thetyphoonsandrelatedfloodingcausedextensivedamagetotelecommunicationsinfrastructure—includingfixedlines,mobilenetworks,andbroadband(Internet)networks,resultingintemporarynetworkoutagesinsomeareas.Theseoutageswerecausedbyacombinationof:lossofpower;damagetoon-sitepowerplantssuchasbatteries/rectifiersandgenerators;transmissionproblems,suchasdamagetocablesandlossofalignmentofmicrowavelinks;anddamagetobuildingsusedascellsites.Otherfactorsincludedthedifficultyofmobilizingtechnicalandotherstaffinaffectedareas.Flooddamagedisproportionatelyaffectedthefixedlinenetwork–primarilyinNCR,RegionII,andRegionIV-A,and,toalesserextentinRegionI,RegionIII,RegionIV-BandRegionV–disturbingfixedbroadbandinternet(DSL)connectionandsomeprivatedatanetworks.Damagetocellsitesreducedtheavailabilityofmobilecoverage,particularlyinNCRandRegionIV-A.Telecommunicationsserviceinterruptionsaffectedresidentialconsumers,businesses,governmentoffices,banks,internetserviceprovidersandtheBusinessProcessOutsourcing(BPO)industry(includingcallcenters).ThelatterisconcentratedintheNCRandisoneofthebiggestusersoftelecommunicationsservices.However,theBPOindustrydidnotreportsignificantproblemssincetheyactivatedinformation/networkback-up/disasterrecoveryprocedures.

Asisoftenthecaseinnaturaldisastersituations,therewasasurgeintelecommunicationstraffic–particularlyformobile,Short Message Service (SMS)andsocialnetworkingwebsites–intheimmediateaftermathofthetyphoons.Theindustryactedquicklytorestoreservices,particularlyformobiletelephonyandSMS,tominimizepotentialrevenuelosses,aswellastoassistbusinesses,governmentdepartmentsandcommunities.Theindustryalsoactivatedcorporatesocialresponsibilityprograms,suchasfreecallsandSMS-baseddonationfacilities,toassistaffectedcommunities.Somecarriersallocatedfundsdirectlytocommunityrebuildingefforts.

Eightypercentoftelecommunicationsinfrastructurewasrepairedalmostimmediatelyduetorobustdisasterrecoveryandbusinesscontinuityfacilities.About97.5percentofdamagedinfrastructureisexpectedtoberepairedbyend-November2009.Theremaininginfrastructureisunlikelytoberestoredduetochangesindemand.Restorationofmobilenetworkswasrelativelyfast,thoughrepairstofixedlineswereslowerforlogisticalreasons.Thetotalestimatedcostofrepairsandrestoration,basedoninformationavailable,50isPhp193million.Themaincoststotheindustryhavebeen:replacementofplantandequipment,plusrebatesanddiscountstoclients.However,someofthesecostswillbecoveredbyinsurance.Overallrevenuesintheindustryhavereportedlyincreased,relativetousuallevelsforthethirdquarter,duetoincreaseddemandforservices,includingforemergencycommunicationsandspecialservicessuchase-payments(donations,fundstransfers).Asaresult,thecostsofrepairingandrestoringserviceswerenotedtobemanageableandtheneedforexternalfundingorsubsidieshasnotbeenraisedasanissuebyserviceproviders.Infact,theindustryhascontributedtoreconstructionandcommunitysupporteffortsinothersectors.

50 FromPLDT,Smart,Globe,EasternTelecomsandBayantel,andfromdataprovidedbytheNationalTelecommunicationsCommission.

Dav

e Ll

orit

o


Background

Telecommunicationsinfrastructureincludes(a)transmissionnetworksor“backbones”,e.g.,terrestrial,fibre-optic,microwaveorsatellitenetworks,and(b)accessnetworks,suchasfixedline(copperwires),mobile(basestations).Thesenetworksdeliveracombinationofvoicetelephonyanddataandinternetservicestoend-users,usingdifferenttechnologies.51ThemainservicesaffectedbytyphoonsOndoyandPepengwerefixedlines,mobile,andbroadbandinternet.

Intermsoftransmissionnetworks,therearethreemajorPhilippinenationwidebackbones:PhilippineLongDistanceTelephoneCompany’s(PLDT)DomesticFiberOpticNetwork(DFON),TelecomsInfrastructureCorporationofthePhilippines’(Telicphil)NationalDigitalTransmissionNetwork(NDTN),whichismanagedandmajorityownedbyBayanTelecommunications,Inc.(Bayantel)andGlobeTelecomInc.’s(Globe)broadbandnetwork.DFONandNDTNareprimarilyfiber-opticnetworks.DigitelCorporation(Digitel)alsooperatesabackbonenetworkinLuzon.Thefollowingprovincesrelyonsatellitetransmission:Batanes,Quirino(RegionII),Bataan(RegionIII),Palawan,Marinduque,OrientalMontoro(RegionIV-B),Catanduanes(RegionV).

ForAccessNetworks,thetotalnumberofinstalledfixedlinesinthePhilippinesisabout7.45million,ofwhich4.89millionaresubscribed(active).Atotalof1.35millionfixedlinesubscribersusedial-upInternet.About48percentofinstalledlinesor54percentofsubscribedlinesareintheNCR.PLDT,includingitssubsidiary,PilipinoTelephoneCorporation(Piltel),andDigitelarethemainfixedlineserviceprovidersintheaffectedareas;Globe,BayantelandEasternTelecomshavesmallfixednetworks,forDSLservice.Thetotalnumberoffixedlinesintheaffectedregionsisabout2.9million,or80percentofthecountry’stotal;ofthesethemajorityisinMetroManila.Fixedlineserviceisgenerallylimitedtothelargercitiesandtowns.

Thereareabout68millionmobilephonesubscribersasofend-2008.About53percentresideintheNCR,about20percentintherestofLuzonandtherestaboutevenlysplitbetweenVisayasandMindanao.Approximately10,000ofthesecellularphonesubscribersarealsosubscribersofmobilebroadbandservices,althoughthenumberofusersisprobablyhighersinceatleast25percentofmobilephonesownedinthecountrytodayareInternetcapable.Mobilenetworkcoverageismuchmoreextensiveinthetyphoon-affectedareas.PLDT(Smart),GlobeCommunications(Globe,TouchMobile),Digitel(SunCellular)andBayantelalloffermobilephoneservice.52.ThelatestavailablecoveragemaporGlobalSystemforMobilecommunications(GSM)serviceindicatesthatpopulationcoverageforthewholecountryisabout99percent.Thisincludesvirtuallyallofthetyphoon/floodaffectedareas(excludingsomelocal“blindspots”orareaswithweakersignals).Thus,themajorityofhouseholds,governmentworkers,andbusinessesintheaffectedareasrelyonmobilephonecoverage.Thetotalnumberofmobilebasestations(BTS)byserviceproviderisnotavailable.

Dial-upandfixedbroadbandinternetisavailabletofixedlinesubscribers.Therearealso586,000wiredbroadband(mainlyDSL)subscribersasofend2008,53approximately50percentofwhomareinNCR,25percentintherestofLuzon,andtheremaindersplitbetweenVisayasandMindanao.54 Thereareanestimated563,000subscriberstowirelessBroadband(SmartBro),linkedtoSMART’s

51 Voicetelephonyoverfixedlinesormobilenetworks;basicdata(SMS)overmobilephonenetworks;narrowbandInternet(dial-up)overfixedlines:fixedbroadband(high-speed)Internet(DSL)overfixedlines;broadbandwirelessorWiMAX;ormobileInternet(GPRS,EVDO,or3Govermobilephonenetworks).

52 Smart,GlobeandDigitelfollowtheGSMmobilestandard,whileBayanteloffers“fixed-wireless”serviceusingtheCDMAstandard.

53 NTCdataasofOctober2009.54 Interviewswithcarriers.


mobilenetwork,asofend-2008.Approximately60percentofthesesubscribersareintheNCR,withanother20percentintherestofLuzon.Mobilebroadband(e.g.3G)isavailableprimarilyinNCR.Satelliteinternetservicesareusedinsomeareaswherethereisnoothertypeoffixed,wireless,ormobilebroadbandavailable.Internetusersintheaffectedareasareprimarilyinstitutional,includinglargecorporations,internetcafes,governmentoffices,andpublichighschoolsparticipatinginthegovernment’splantoprovideinternetaccesstoschoolsnationwide.

Damage and Losses

Damagescanbecategorizedbysupplierandend-user.Theformerincludesphysicaldamagetohardware,transmissionequipment,repeaters,cellularsites,includingbuildings,on-sitepowerplantsincludingbatteries,rectifiers,andgeneratorsets.Otherdamagewasassociatedwiththelossofpowersupply.Ontheuserside,damagecenteredmostlyonfixedlinesandcustomerpremisesequipment(phones,computers).Muchofthedamagefromthetyphoonstookplaceonthecustomerside,sincemostclients,particularlyresidential,donothavebackup,businesscontinuityanddisasterrecoveryfacilities.TheBPObankingindustriesdohavesuchbusinesscontinuityfacilitiesinplaceandwerelessadverselyaffectedthanotherusers.Intermsofinfrastructurestatistics,thecombinedfloodandstructuraldamagefromOndoyandPepengcanbesummarizedasperTable51.

Table 51: Estimated Costs of Damage in Telecommunications Sector

REGION

Voice or Phone Lines

DSL or Broadband Internet

Private Data Network

Mobile Total (Value,Php M)Damage

(lines)Value(Php M)

Damage (lines)

Value(Php M)

Damage (lines)

Value(Php M)

Disruption(percent coverage)

Value(Php M)

NCR 167,887 78.70 62,700 20.90 2,970 12.38 29% 20.63 132.60

I 8,130 3.81 6,900 2.30 90 0.38 40% 2.40 8.89

II 12,195 5.72 10,350 3.45 135 0.56 40% 3.60 13.33

III 6,775 3.18 5,750 1.92 75 0.31 40% 2.00 7.40

IV-A 35,612 16.69 13,300 4.43 630 2.63 25% 4.38 28.13

IV-B 200 0.09 100 0.03 10 0.04 10% 0.10 0.27

V 1,800 0.84 900 0.30 90 0.38 20% 0.90 2.42

Total Damage 232,599 100,000 4,000 29%

Total 109.03 33.33 16.67 34.00 193.03

Sources:NTC,InterviewswithcarrierstoprovideaggregateddataforPLDT,Smart,Globe,EasternTelecoms,Bayantel.Note:SomediscrepanciesmightoccurduringconversionofPesovaluetodamagevalues.Thetableincludesfixedwirelessbroadbandandmobilewirelessbroadbandservices,bothofwhichusethemobilenetworkinfrastructure.

ThedamagefromOndoyandPepengaffectedallsevenregionsofLuzon. As a result, all segments oftelecommunicationinfrastructureandservicesexperiencedmomentaryservicedisruptionandsubstantialdamageattheheightofthestorms.WaterandflooddamagewascausedprimarilybyOndoy,andstructuraldamagewasmostlycausedbyPepeng.Flooddamagemostlyaffectedwiredservicesegments(fixedlinesandfixedbroadbandorDSL)intheseareas.

FlooddamagefromOndoymostlyaffectedtheNCRandthenearbyprovincesofBulacan,Rizal,Cavite,Batangas,LagunaandQuezon55–followingthepathofOndoy.SomestructuraldamagewasexperiencedfromOndoy,affectingtheareasalreadyaffectedbyflooddamage–mostlyintheregionsofNCR,RegionIIIandRegionIV-A.However,mostofthestructuraldamagetothe

55 NCRandmostoftheprovincesofBulacan,Rizal,Cavite,BatangasandLagunaarepartof“greaterMetroManila”.


telecommunicationinfrastructurewascausedbythestrongwindsofPepeng.DamagefromPepengwasmostlyexperiencedinNorthernLuzon–intheregionsofRegionI,RegionII,andRegionIII.SomestructuraldamagewasexperiencedinNCRandRegionIV-BfromPepeng,butthiswaslessseriousthan thefloodandstructuraldamagecausedbyOndoy.

Financiallossesassociatedwiththisdamageincluded:(a)directrepairandservicerestorationcosts,(b)foregonerevenuesfromserviceinterruption(thoughthistrendwasquicklyreversedwiththepost-disastersurgeindemand);and(c)costsofrebatesforcustomersaffectedbythedisaster,particularlyforbroadband,privatedatanetwork,andmobileservices.

Theincreaseddemandfortelecommunicationsservicesappearstohavepositivelyimpactedindustryrevenuesintheveryshortterm.Forexample,PLDTreportedthird-quartergrowth,andSmart(PLDT’swirelesssubsidiary)reportedthatrevenuesfromvoicecallsandtextmessagingrose12 percent on September26,whenOndoystruck.

Withregardtomedium-termfinancialoutlook,theindustryisexpectingsomedegreeofdownturninconsumptionaftertheimpactofthedisasterisfeltbyconsumers.Asaresult,somecarriershavebegunplanninginitiativestoencourageconsumerstomaintaintheirregularuseoftelecommunicationservices;somehavesteppedupcustomerservice/marketingandcorporatesocialresponsibilityinparttomitigatethisrisk.


ThebiggestconcernfortelecommunicationsserviceprovidersimmediatelyaftertheOndoyandPepengtyphoonswasensuringthecontinuityofservice,asservicedisruptionfromfloodsandstructuraldamagecouldsignificantlyaffectrevenues.Giventherobustdisasterrecoveryandbusinesscontinuityfacilities,however,allcarrierswereabletoimmediatelyrepairandrestoreamajorportionoftheirservicefacilitiesinareaswheredisruptionwassignificanttosevere.Asaresult,morethan80percentofserviceswerealreadyrestoredtofulloperationalefficiencyintheimmediateaftermathofthedisaster.Andduetothesignificantrelianceofrecoveryandrestorationeffortsoncommunicationfacilities,particularlywhendealingwithreliefoperations,consumptionoftelecomservicesactuallysurgedabovewhatistypicalforthefourthquarterofanaverageyear.

Atleast90percentofthedamagedinfrastructurewasrepairedandrestoredrelativelyquicklycomparedtoservicesinthetransportationandenergysectors(reportedasaweektowithintwoweeks),with95percenteventuallyrepairedandrestoredinaboutamonthafterthetyphoons,56 anda97.5repairandrestorationtargetedforend-November2009.Thequickresolutionofservicedisruptionswasattributedtothepresenceofrobustdisasterrecoveryandbusinesscontinuityfacilitiesbyallcarriers,havingpreparedforsuchcalamitiesaftertheTaiwanearthquakeof2006.57

Theremaining2.5percentmightnolongerberestoredduetothefollowingreasons:(a)about1percentoftheaffectedfacilitiesinvolveclientswhohavedecidedtoshifttootherserviceprovidersduringtheheightoftherestorationefforts;(b)another1percentoftheaffectedfacilitiesinvolveclientswhohavedecidedtomovetheirlocationorfacilitiesduetothedamageafflictedbythetyphoons;(c)theremaining0.5percentoftheaffectedfacilitiesappeartoinvolveclientswhoareshiftingtoadifferenttechnologyplatformfortheirtelecommunicationneeds(suchasshiftingfromanon-siteVPNfacilitytoanoutsourcedVPNfacility).Thesenewtechnologyplatformsarebeingtreatedasanentirelynewrequirement.

56 Interviewwithcarriers.57 Whichsawmajordisruptionsinallserviceplatformsofallmajorcarriers,withrestorationlastingformorethan2weeks

tomorethanamonth.“TaiwanEarthquakeParalyzesAsianCommunication,”ChosunTimes,December26,2008,retrievedNovember11,2009,http://english.chosun.com/w21data/html/news/200612/200612280011.html.


Accordingly,nearly100percentoftheaffectedtelecommunicationfacilitieswillhaveeitherbeenrestoredbyend-Novemberorwillnotrequirerestoration.Assuch,thetelecommunicationindustryitselfdoesnotappeartohaveanypost-disasterrestorationneeds.TotalcostofrepairandrestorationprojectedafterfullrecoveryissummarizedinTable52.

Table 52: Estimated Cost of Repairs (Php million)

Region Fixed LinesDSL (Fixed

Broadband)Private Data

Networks Mobile Grand Total

NCR 76.73 20.38 12.07 20.11 129.28

I 3.72 2.24 0.37 2.34 8.66

II 5.57 3.36 0.55 3.51 13.00

III 3.10 1.87 0.30 1.95 7.22

IV-A 16.28 4.32 2.56 4.27 27.42

IV-B 0.09 0.03 0.04 0.10 0.26

V 0.82 0.29 0.37 0.88 2.36

Total Repair and Restoration 106.31 32.50 16.25 33.15 188.21

Sources:NTCandcarrierinterviews.*Mobile:includesfixedwirelessbroadbandandmobilewirelessbroadbandservices,bothofwhichusethemobilenetworkinfrastructure.

Noneofthecarriershavereportedanyneedforadditionalfinancingtocoverrepairandrestorationeffortsotherthanwhattheyhaveincurredsofar.Onereasonforthisisthatthecostofdisasterrepairandrecoverywerealreadyallocatedinthecarriers’budgetfortheyearandtheexistenceofrobustdisasterrecoveryandbusinesscontinuityhaskeptun-budgetedrepairandrestorationcostsataninsignificantlevel.Moreover,theadditionalrevenuesgeneratedfromthesurgeintheuseoftelecommunicationservicesduringthedisastercoveredanyunexpectedcostsofrepairandrestoration.


Repairsarebeingundertakenbythetelecommunicationsoperatorswhohavethenecessarytechnicalexpertiseandfinancialresources.Publicfundingisnotbeingsoughtandthecarriersintervieweddonotanticipaterequestinganyadditionalsupportfromthegovernmentorothersources.However,aswiththecarriers’previousmarketingpromotionefforts,itisexpectedthattherewillbesignificantcoordinationwiththegovernmentandotherthird-partysectors,particularlywithlocalcommunityleadersandnon-governmentorganizations(NGOs).Allcarriershavereportedthattheyalreadyhaveanetworkofcontactsinplaceforsuchcoordinationeffortswiththerespectivesectoralrepresentatives.

Cross-Sectoral Issues

“ I decided to look for a job after the floods. Fortunately, my previous employer took me in even though business was down and she really didn’t need me. That job gave me self-respect.” –AWomanfromBustos,Bulacan.

Pete

Tem

plo


Local GovernmentSummary

TheestimateddamagetoassetsofLGUs58totaledPhp294.2million,andwascalculatedbasedonLGUestimatesforthecostsof:1)repairingpartiallydamagedassets;and2)reconstructing/replacingtotallydamagedassets.However,thisamountdoesnotincludesignificantdamagesinPasig,ManilaandCainta.TheestimatedlossesexperiencedbyLGUstotaledPhp41million.ThiswascalculatedbasedonestimatesreportedbyLGUsofthe:1)reducedown-sourcerevenuecollectionsresultingfromthedisasters;2)costsofrestoringthefunctionsofofficeswhoseoperationsweredisruptedduetothedisasters;and3)higheroperationalcostsforoperatingofficesintheperiodfollowingthestorms.FloodingwasthemaincauseofdamagetoLGUassets,followedbydamagecausedbylandslidesandstrongwinds.

ThemainobjectivesoftherecoveryandreconstructioneffortsforLGUsareto:1)fullyrestoreoperationstopre-disasterlevels;and2)strengthenthecapacityofLGUstomitigatetheriskstoassetsandoperationsfromfuturedisasters.Atpresent,LGUshavebeenutilizingtheirCalamityFunds,whichisastatutoryappropriationof5percentofthetotalannuallocalgovernmentbudgettofinanceurgentreconstructioncosts.However,itisuncertainwhetherthesefundswillbesufficienttocovermoreexpensiveassetsthatwouldneedtoberepairedorreplacedintheshort-andmedium-terms.TheexperiencewithOndoyandPepengalsorevealedkeyweaknessesindisasterriskmanagement.

Atwo-prongedpost-disasterstrategyforthelocalgovernmentsectorissuggested:1)theextensionoftargetedfinancialassistancetothemostheavilyaffectedLGUstosupporttherapidrestorationoftheiroperationstopre-disasterlevels;and2)theprovisionoftechnicalassistancetoLGUsindisaster-proneareastoimplementdisaster-managementmeasuresthatwillbetterprotectLGUassetsandoperationsgoingforward.Intermsoffinancialassistance,theheavilyaffectedLGUswouldbenefitfromaconcessionalloanfacility,whichwouldallowthemtorapidlyrepairdamagedequipmentandfacilitiesandreplacedestroyedassetstotheirpre-disasterstate.Intermsoftechnicalassistance,LGUslocatedinidentifiedhigh-riskareaswouldbenefitfromacapacitybuildingfacilitythatwouldstrengthentheirabilitytomitigatetherisksofdamagetoLGUassetsandoperationsduetonaturaldisasters.

Damage and Losses

Awiderangeofservicedeliveryresponsibilitiesandrevenue-raisingpowersinthePhilippinesarestatutorilydevolvedtothelocallevel.Thisassessmentfocusesondamageandlossessufferedbylocalgovernmentunits.Itencompassesassets(suchasmunicipalhalls,community-levelfacilities,vehicles,heavyequipment,officefurniture,andITsystems)andeconomicflows(suchaslocaltaxesandlocalrevenuegeneratingactivities)thatarenotcoveredbyothersectorsofthePDNA(particularlytransport,education,health,watersupply,solidwastemanagement,floodcontrol,andagriculture).

Baselinedatawerenotavailablemainlydueto:(i)thelimiteddatabaseofphysicalLGUassetsmaintainedbytheDepartmentofInteriorandLocalGovernment(DILG);and(ii)theinitialfocusofdatacollectioncarriedoutbytheNDCCafterOndoyandPepengwhichtookintoconsiderationonlythekeysectorsoftheeconomyandexcludedtheimpactofthestormsonLGUassetsandoperations.

58 LGUsinthePhilippinesconsistofthreelayers.Theseare(1)theprovincesandindependentcities,2)componentcitiesandmunicipalities,and3)thebarangays,whichisthebasicunitofgovernment.


Toaddressthegap,DLIGlatercirculatedaninformationformthatsolicitedbasicdataonthedamageandlossesofphysicalassetsandeconomicflowsofLGUsintheaffectedregions.Over90LGUsoutofthe600locatedintheaffectedareasengagedintheassessment.

Dataindicatethatapproximatelyone-thirdoftheLGUsthatreporteddamagesufferedsubstantialdamagesandlosses(exceedingPhp1million)whilethemajorityoftheLGUsreportedrelativelyminorimpacts.TheassessmentalsoshowedthatLGUassetsandeconomicflowswerenotaffectedtothesameextentasothersectorsofthelocaleconomy(suchashousing,transport,andagriculture).Samplefieldvisitsandphoneinterviewsconfirmedthatalthoughassetsandoperationswereaffectedbythestorms,allLGUswereabletorestorebasicoperationsandserviceswithinashorttime-frame(ranginguptooneweek,inmostcases).

AlthoughinformationwascollectedfromthemajorityoftheaffectedLGUs,itshouldbenotedthat:(i)severallargeLGUs(namely,thecitiesofPasigandManilainMetroManila,andthemunicipalityofCaintainRizal)didnotsubmitdataorwereunabletoestimatecosts,leadingtoaconsiderableunderestimationofLGUdamagesandlosses59;(ii)thereisasignificantvariabilityintheestimatessincethecostsfordamageandlosseswereself-reportedbytheLGUs;(iii)innumerouscasesLGUsreporteddamagedassetsandaffectedoperationsbutdidnotestimatetheresultingcosts.

TheestimateddamagetoLGUassetstotaledPhp294.2million.Thiswascalculatedbasedontheestimatesofthecostsof:(i)repairingpartiallydamagedassets;and(ii)reconstructing/replacingtotallydamagedassets.Sub-classificationswerespecifiedforthethreecategoriestoguideLGUsinreportingdata.60(Table53)

Table 53: Estimated Damage to LGU Assets (in Php million)

City Municipality Province Total

Facilities 39.8 86.7 1.2 127.7

-Prov/City/MuniHalls 1.4 6.3 0.4 8.0

-Market/Slaughterhouse 1.4 13.0 0.8 15.2

-BarangayFacilities 19.5 32.7 - 52.1

- Other Facilities 17.5 34.7 - 52.0

Public Documents 6.2 1.7 - 7.9

Vehicles 24.9 3.8 - 28.7

- Light passenger vehicles 10.9 0.6 - 11.4

- Medium passenger vehicles 7.0 1.8 - 8.8

- Trucks and buses 7.0 1.4 - 8.9

Equipment 118.7 10.3 0.9 129.9

-OfficeEquipment&Furniture 12.0 2.7 0.1 14.7

-ITEquipment&Software 59.6 4.3 0.8 64.7

- Heavy Equipment 47.1 3.3 - 50.4

Total 189.6 102.5 2.1 294.2

FloodingwasthemaincauseofdamagetoLGUassets,followedbydamagecausedbylandslidesandstrongwinds.Damagetofacilitiesandequipmenttookupthemajorityoftheestimateddamage

59 Bywayofcomparison,Marikina,arelativelylargeandhighlyaffectedcityinMetroManila,accountsfor56.5percentofthetotalreportedLGUdamages.

60 Sub-classificationsinclude:publicdocuments;informationsystems;equipment,furniture,andfixtures;transport,machineries,andequipment;andpublicbuildingsandotherinfrastructure.


toLGUassets,witheachaccountingforover40percentoftotaldamagebrokendownasfollows:(i)damagestofacilitieswereconcentratedonbarangayfacilities,whichincludesbarangayhalls,multi-purposebuildings,daycarecenters,andcoveredcourtsfollowedbyconventioncenters,administrationbuildings,andsportscomplexes;(ii)thedamagetoequipmentwasconcentratedonITequipmentandsoftwareaswellasheavyequipment,whichincludesbulldozers,backhoes,andotherconstructionequipment.SincekeyLGUofficesarecommonlylocatedinthetowncenters(orpoblacions)onhigherandsaferground,thedamagetoLGUinfrastructurewassomewhatminimized.ThemajordamagetoLGUassetstookplaceinthevillages/barangay,whereschools,farm-to-marketroads,andsmallerbarangayfacilitiesarelocated.

ArelativelysmallnumberofLGUsreportedseveredamagetopublicdocumentsduetoflooding.Variousmeasureswereundertakentorecoverofficialdocumentsrangingfromdryingthemusingelectricfansandheaters,togatheringdatafromothersourcesorrequestingcopiesfromnationalagenciessuchastheNationalArchivesandtheCommissiononAudit(COA).

Citiesaccountedforalmosttwo-thirdsoftheestimateddamagetoLGUassets.Municipalitiesaccountedforthevastmajorityoftheremainderwhilereporteddamagetoprovincialassetswasminimal.Notably,Php189.6millionindamagestocityassetswereconcentratedinonlyninecities.Incontrast,Php102.5millionindamagestomunicipalassetswasdispersedamong82reportingmunicipalities.

TheestimatedlossesexperiencedbyLGUstotaledPhp41million.Thiswascalculatedbyconsidering:(i)reducedown-sourcerevenuecollectionsresultingfromthedisasters;(ii)costsofrestoringthefunctionsofofficeswhoseoperationsweredisruptedduetodisasters;and(iii)higheroperationalcostsofbusinesscontinuityintheperiodfollowingthestorms.Thecostsofrestoringtheofficesoperationsincludetheclean-upcostsafterthefloodingaswellastheimmediatereplacementofbasicsupplies.(Table54)

Table 54: Estimated LGU Losses (in Php million)

City Municipality Province Total

Revenue Reduction 13.4 16.6 1.4 31.4

-TaxRevenue 7.7 8.1 1.0 16.7

- Other Income 5.7 8.5 0.4 14.6

Higher Costs 1.6 7.6 0.4 9.6

- Additional operating costs 0.1 1.6 0.4 2.0

- Restoration costs 1.5 6.0 - 7.5

TOTAL 15.0 24.2 1.8 41.0

ThereductionintaxrevenuesandotherlocalincomewasestimatedtobePhp31.4million,whichcomprisedmorethanthree-fourthsofthetotallosses.Theseestimatesweremainlybasedon(i)actuallossesinrevenuesduetodisruptioninoperationsofeconomicenterprises(suchaspublicmarketsandslaughterhouses)aswellas(ii)interruptionsinthecollectionoftaxesandfeesintheweeksafterthestorms.SinceLGUsquicklyrestoredtheirrevenue-raisingcapacity,theselossesaremainlyshort-terminnature.

However,LGUswhosehousingsectorsandlocaleconomieswereseverelyaffectedareexpectedtoseeafurtherreductionintheirown-sourcerevenuesinthecomingfiscalyearandinthemedium-termasaresultoftheerosionoflocaltaxbases;realpropertytax,localbusinesstax,andvariousbusinesslicensesandpermitsareamongthemainsourcesoflocalrevenues.AlthoughallLGUs


dependonfixedfiscaltransfersfromthenationalgovernmentfor70-90percentoftheirannualincome,thoseLGUsthataremorefiscallyselfreliant(e.g.,MetroManilaandsurroundingprovinces)aremorelikelytoexperienceconsiderablepressureontheirbudgetsinthenextfiscalyearduetolowerlocalrevenuecollections.BecauseoftheweakcapacityofLGUstoanticipatelocalrevenuesandtheidiosyncraticimpactofthedisastersonthelocaleconomy,medium-termeconomiclossesresultingfromrevenuecollectionhavenotbeenforecastedinthisPDNA.

Thereisanimmediateneedtorepairpartiallydamagedfacilitiesandtorepair/replacetheequipmentinordertoensurethefullrestorationofLGUoperations.Theshort-termcostsestimatedforrebuildingpartiallydamagedfacilitiesisPhp89.7millionwhiletheestimatedmedium-termcostforreconstructingtotallydamagedfacilitiesisPhp37.8million,outofatotalreconstructioncostofPhp300.9million.GiventhepeculiaritiesofLGUfacilitieswhicharedifferentinsize,location,anddesignitisnotpossibletoestimatethecostsfor‘buildingbackbetter’;theestimationofneeds,thus,onlycoversreconstructionexpenditurestoreturntothepre-disastersituation.(Table55)

Table 55: Priority Recovery and Reconstruction Needs in the LGU Sector (in Php million)


Short-term Medium-term



Physical Assets - - 263.1 37.8 263.1 37.8

- Facilities - - 89.7 37.8 89.7 37.8

- Public Documents - - 7.9 - 7.9 - - Vehicles - - 29.1 - 29.1 - - Equipment - - 136.4 - 136.4 -Economic Flows 10.0 - - - 10.0 -

- Revenue Reduction - - - - - - - Higher Costs - - - - - -Total 10.0 - 263.1 37.8 273.1 37.8

Intermsofreconstruction needs, whiletheoverallimpactofthedisastersonLGUassetsanalyzedhereisrelativelysmall,thedamagestophysicalassetsarestillsubstantialandLGUshavetoincursignificantcoststorepairandreconstructtheseassets.

Themainobjectivesofthereconstructioneffortsforthelocalgovernmentsectorare:(i)tofullyrestoreoperationsoftheaffectedLGUstopre-disasterlevels;and(ii)tostrengthenthecapacityofLGUstomitigatetheriskstoassetsandoperationsfromfuturedisasters.Atpresent,LGUshavebeenutilizingtheirCalamityFunds,whichisastatutoryappropriationof5percentofthetotalannuallocalgovernmentbudget,tofinanceurgentreconstructioncosts.However,itisuncertainwhetherthesefundswillbesufficienttocovermoreoftheexpensiveassetsthatneedtoberepairedorreplacedintheshort-andmedium-terms.OndoyandPepengalsorevealedkeyweaknessesindisasterpreparednessandresponseforwhichlongerterminvestmentsarenecessary.

Intermsof recovery needs,whilethefiscaloperationsforsomeLGUsmayhavenotyetbeenfullyrestoredtopre-disasterlevels,thesehaveatleastbeenrestoredtoabasicleveloffunctionality.ThecostsreportedbyLGUstorestoretheoperationsofvariousofficesareestimatedatPhp7.5million.ThisisarelativelysmallamountandtheLGUsalreadyusedtheirCalamityFundstocovertheseimmediaterestorationcosts,aswellasvariousemergencyneedsrelatedtoreliefoperationsandtherestorationofbasicservices.Asaresult,thesecostsdonotneedtobeincludedintheestimateofrecoveryneeds.


Agreaterconcernover2010andonwardsistheimpactofOndoyandPepengonlocalpropertymarketsandlocaleconomies,whichmayhaveadverseeffectsonLGUlocalrevenuemobilization.Hence,theprimaryrecoveryneedsofLGUsarecloselylinkedtotherecoveryeffortsforkeysectorsoftheeconomy,particularlyhousing,transport,agriculture,commerce,andlivelihoods.Thespecificrecoverystrategiesandpolicymeasuresforthesesectorswillserveasthecriticalinterventionstoacceleratetherecoveryofthelocalgovernmentsector.

Atwo-prongedpost-disasterstrategyforthelocalgovernmentsectorshouldconsiderthefollowingcomponents:(i)theextensionoftargetedfinancialassistancetothemostheavilyaffectedLGUstosupporttherapidrestorationofoperationstopre-disasterlevels;and(ii)theprovisionoftechnicalassistancetoLGUsindisaster-proneareastoimplementdisasterriskreductionmeasuresthatwillbetterprotectLGUassetsandoperationsinthefuture.

Financial Assistance

TheheavilyaffectedLGUswouldbenefitfromaconcessionalloanfacility,whichwouldallowthemtorapidlyrepairdamagedequipmentandfacilitiesandreplacedestroyedassets.AccesstothesesoftloansshouldbecarefullytargetedandstrictlyrestrictedtoLGUsthatsufferedsignificantdamagetoassetsstemmingfromthestorms.TheloanfacilityshouldprovideflexibilitytoallowLGUstoborrownotjustforcapitalassetsbutalsofornon-capitalassetsthatweredamaged,includingfurniture,computersystems,andofficeequipment.Theconcessionalloanfacilitywouldsupportboth:(i)theshort-termreconstructionneedsofLGUstorepairandreplaceneededassetsinordertofullyrestoreLGUoperations(upto2010)and(ii)themedium-termreconstructionneedsofLGUstorebuildfacilitiesthatweredestroyedbythestorms.

Technical Assistance

LGUslocatedinidentifiedhigh-riskareaswouldbenefitfromacapacitybuildingfacilitytostrengthentheirabilitytomitigaterisksofdamagetoLGUassetsandoperationsduetodisasters.Thetechnicalassistancecouldinclude:(i)trainingandadvisoryservicestoassistLGUsinidentifyingsolutionsforreducingthevulnerabilityofday-to-daygovernmentoperations(includingprotectingpublicdocumentsandinformationsystemsfromflooddamage);tostrengthenLGUcapacitytoprepareforandrapidlyrespondtodisasters;tocapacitateLGUstafftoconductpost-disasterneedsassessments;andtostrengthenLGUassetmanagement,whichwouldallowthemtomaintainup-to-dateandaccuratebaselinedataofexistingassets;aswellas(ii)grantsfundstoassistLGUsinenhancing/retrofittingLGUfacilitiestomakethemmoreresilienttodisasters(suchasimprovingthedrainagesystemsoffacilities);andassistLGUsinacquiringequipmentandITsystemsthatcanenhancetheircapacitytomitigatedisasters.TheestimatedcostforthistechnicalassistanceisPhp10million.

Inaddition,thenationalgovernmentmayreconsiderthepoliciesregardingtheLGUutilizationoftheCalamityFundinordertoallow:(i)moreflexibilityinitsusagefordisaster-riskmitigation(includingmitigationandpreparationactivities);and(ii)thepotentialpoolingoffundsamongLGUsfordisasterpreparationandresponseactivities,whichisincludedinproposedlegislationRA8185.Inordertoexpeditethedeliveryofassistancetolocalgovernmentsduringdisastersituations,thenationalgovernmentmayalsoconsiderdevelopingacommonassessmentmethodologyforrapidsectoraldamage,losses,andneedsrecoveryassessmentsthatcouldthenbeutilizedbyLGUs,whichcouldthenbevalidatedbytheRegionalDisasterCoordinatingCouncils.



Financial Assistance

GiventheexistinginstitutionalframeworkoftheLGUcreditmarket61, the Municipal Development FundOffice(MDFO)wouldbethenaturalconduitfortheproposedconcessionalloanfacilityforaffectedLGUs.ItwouldnotbeadvisablefortheLandBankofthePhilippinesandtheDevelopmentBankofthePhilippinestoengageinconcessionalfinancingforLGUsbecausethiswouldcompromisetheirexistingroleasmarket-basedlenders.Incontrast,MDFOhasextensiveexperienceinchannelingfundingfromdevelopmentpartners(suchastheWorldBankandAsianDevelopmentBank)toLGUsthroughloansandgrants.However,thecentralgovernmentwoulddeterminethemostappropriatearrangementsforchannelingfundsforconcessionalloanstohelpaffectedLGUsaddressreconstructionneeds,particularlygiventheconcurrentneedsforLGUstofinancesector-specificinfrastructure(e.g.,transport,watersupply,etc.)damagedduringthestorms.

Technical Assistance

Thenationalgovernmentneedstodeterminetheappropriateagencythatwillberesponsibleforsupportingdisaster-riskmanagementatthelocalgovernmentlevel.SinceDILGisresponsibleforthegeneralsupervisionoflocalgovernmentsandtheformulationofpoliciesandprogramstoaddresslocalemergencies,itisapossiblecandidatetoassumethisrole.However,itisuptothenationalgovernmenttomakethisdetermination.Nonetheless,thereisclearlyaneedforawell-coordinatedandfocusedefforttoassisthigh-riskLGUsinbuildingcapacitytomitigatetherisktoLGUassetsandoperationsfromdisasters.

61 Thecreditmarketforlocalgovernmentshasbeenlimitedtotwomajorgovernmentfinancialinstitutions:theLandBankofthePhilippines(LBP)andtheDevelopmentBankofthePhilippines(DBP).LGUloansfromthesetwobanksareprovidedonmarket-basedterms.TheMunicipalDevelopmentFundOffice(MDFO),whichisanofficeundertheDepartmentofFinance,isarelativelysmallerLGUcreditinstitutionandfocusesmainlyonprovidingconcessionalloanstosmallerandlesscreditworthyLGUs.Furthermore,MDFOcurrentlyadministerstheDisasterManagementAssistanceFund(DMAF),whichisalendingwindowthatLGUscanaccessforinitiativesrelatedtodisastermanagement.


Recovery Framework: Local Government



LGU operations fullyrestoredtopre-disasterlevels.

Estimated o damages reported by LGUs totaled Php294.2million, focusedmainly on Facilities and Equipment.

Extensionoftargetedo financialassistancetotheheavilyaffectedLGUsthrough concessional loansfortherepairandreplacementofdamagedcross-sectoralassets.Measurableindicator:fullo restorationofthevalueofdamaged and destroyed assets.Estimatedtotalfinancingo needofP263.1million(althoughasubstantialportionofthisamountwillbe covered by LGU Calamity FundsforrelativelyweaklyaffectedLGUs).

Extensionoftargetedfinancialo assistancetotheheavilyaffectedLGUs through concessional loans fortherepairandreplacementofdamagedcross-sectoralassets.Measurableindicator:fullo restorationofthevalueofdamagedanddestroyedassets.Estimatedtotalfinancingneedofo Php37.8million.

Stronger LGU capacity to mitigaterisksfromfuturedisasters.

Extensionoftechnicalo assistance to high-risk LGUs through capacity building measures that strengthen their ability to mitigate the risksofdamagetoLGUassetsandoperations.Estimatedtotalfinancingo needofPhp10million.

Totalfinancingneeds

Totalfinancingneeds:Php273.1million

Totalfinancingneeds:Php37.8million


Non

ie R

eyes

Table 56: Impact on Livelihoods and Income Losses in 2009 by Sector

NCR CAR Region I Region II Region III Region IVA Total

Number of Workdays LostIndustry 17,372,748 440,890 5,372,973 3,010,399 8,770,340 4,173,690 39,141,040

Micro 12,685,170 381,022 4,847,139 2,790,565 7,529,258 4,056,258 32,289,412Small 4,687,578 59,868 525,834 219,834 1,241,082 117,432 6,851,628

Commerce 39,025,619 733,967 22,002,401 2,089,996 30,654,396 5,710,751 100,217,130Micro 28,495,583 634,319 10,553,681 1,937,374 11,574,936 5,550,083 58,745,976Small 10,530,036 99,648 11,448,720 152,622 19,079,460 160,668 41,471,154

Agriculture - 5,963,825 5,581,500 4,989,185 8,802,310 716,330 26,053,150Firsheries 2,676,888 49,086 726,246 1,031,130 236,520 180,954 4,900,824

Total 59,075,255 7,187,768 33,683,120 11,120,710 48,463,566 10,781,725 170,312,144 Wage Losses (000 Pesos)

Industry 6,829,575 132,787 1,409,599 662,047 2,574,270 1,353,403 12,961,681 Micro 4,986,794 114,756 1,271,647 613,701 2,209,988 1,315,323 10,512,209Small 1,842,781 18,031 137,953 48,346 364,282 38,080 2,449,472

Commerce 15,341,751 221,056 5,772,330 459,632 8,997,678 1,851,825 32,644,273Micro 11,202,183 191,044 2,768,758 426,067 3,397,475 1,799,725 19,785,254Small 4,139,568 30,012 3,003,572 33,565 5,600,203 52,100 12,859,019

Agriculture - 888,610 836,109 606,086 1,258,290 132,901 3,721,996 Firsheries 716,041 7,314 108,792 125,262 33,811 33,572 1,024,791

Total 22,887,367 1,249,767 8,126,830 1,853,027 12,864,049 3,371,701 50,352,741 Needs (000 Pesos)

Industry 5,172,049 100,738 1,069,916 502,672 1,952,802 1,028,205 9,826,383 Micro 3,789,963 87,215 966,452 466,413 1,679,591 999,645 7,989,279 Small 1,382,085 13,523 103,464 36,259 273,212 28,560 1,837,104

Commerce 11,618,335 167,703 4,356,935 348,985 6,782,234 1,406,866 24,681,057Micro 8,513,659 145,194 2,104,256 323,811 2,582,081 1,367,791 15,036,793Small 3,104,676 22,509 2,252,679 25,173 4,200,152 39,075 9,644,264

Agriculture - 675,344 635,443 460,626 956,301 101,005 2,828,717 Firsheries 544,191 5,558 82,682 95,199 25,696 25,515 778,841

Total 17,334,575 949,343 6,144,975 1,407,481 9,717,033 2,561,591 38,114,998

Impact on Employment and Livelihoods

Summary

ThetyphoonsthathitthePhilippinesinsuccessionaffectedthelivelihoodsandincomesofhouseholds.Becauseofthedamagesandlossessufferedbytheproductivesectors,atotalof172millionworkdayswerelost,whichresultedinlossesamountingtoPhp50.4billionofincomesin2009.(Table56)

Acrossthesectors,commercesustainedthebiggestlossinemploymentandincomesin2009,whichamountedtoPhp32.6billion,representing64percentoftotalincomeslost.LossesinindustryandagricultureamountedtoPhp13billionandPhp3.7billion,respectively.Amongtheaffectedregions,losseswereconcentratedintheNCRandRegionIII.TotalincomelossesinNCRwereestimatedatPhp22.9billion,whileforRegionIIIitwasatPhp12.9billion.Together,thesetworegionsaccountforabouthalfofaffectedwholesaleandretailtradeestablishments,mostofwhichareworkersinhome-basedandsmallormicroenterprises.Thissuggeststhat,intermsoflivelihoodslost,informalworkers,especiallythoseinthetrade-relatedsector,sufferedthebiggestlosses.


OfthetotalPhp310.9millionintotalneeds,Php300.9millionisestimatedtobeneededforreconstruction.Temporaryemergencysolutionsareneededtopartiallyrestorethelivelihoodsofthoseaffectedthroughpublicworksprogramsanddirectfoodorcashtransfers.Howeveradisaster-pronecountrysuchasthePhilippinesrequiresaconcertedefforttomitigatetheimpactoffuturedisastersonhouseholdlivelihoodandincomes.Developingacomprehensiverecoverystrategyforproductivelivelihoodsisneededtobetterorientinvestmentsatrecoveringfromnaturaldisasters,whilealsoreducingtherisksoffutureincomelossesduetosimilarshocks.

Pre-disaster Situation

UnemploymentandunderemploymentinthePhilippinelabormarketarehighaveragingat7.4percent62,higherthanmostcountriesinEastAsia(3.8percent)andSoutheastAsia(5.7percent)(ILO,2009a).Theworkingagepopulationgrewatanannualrateof2.7percentbetween2001and2007butemploymentgenerationbarelykeptup,increasingannuallybyonly2.0percent.63 Youth account formorethan50percentoftheunemployed,withahighdegreeofunemploymentevenamongthecollegeeducated.InternalmigrationpatternsfromruraltourbanareascompoundproblemsoffindingjobsindenselypopulatedareassuchasMetroManila(whichhasapopulationofmorethan11million,2009NSO),whichresultedinhighconcentrationofinformaljobsintheseareas.

Informalworkersaccountforathirdoftotalemploymentwithhalfoftheinformalsectorworkersalmostevenlysplitbetweenagriculture(48percent)andtheservicesector(45percent).Ofthe35millionFilipinoswhoareemployed,nearlyhalfisemployedintheservicessectorandone-thirdinagriculture,whichnowaccountsforonly34percentofemployment64.IndustryandservicesareconcentratedmainlyinNCRandRegionIV-A(regionaroundNCR)whichtogetheraccountforabouthalfofGDPfromtheindustryandservicessectors.

Filipinohouseholdsarehighlydependentonwageincomewhichaccountsfor45percentofanaveragehousehold’sresources.Thisreflectstheextentoftheirvulnerabilitytofallingincomesinthefaceofcrisis.Realwageshavenotbeenabletokeepupwithgeneralpriceincreasessince2001.Between2003and2006,theaveragerealfamilyincomedeclinedby3.7percent.Remittancesareareliablesourceoffinancialsupportreceivedbythreeoutoffivehouseholds(aquarterofthemunderthepovertyline),andtheyaccountfor11.5percent(abroad)and3.3percent(in-country)oftotalhouseholdincome.

Therecentfoodpricecrisisandtheglobaleconomiccrisisfurtherdepressedtheincomesofhouseholdsbyreducingearningsandemployment.Remittancesfromfamilymembers(abroadorincountry)reportedadeclinesinceemploymentopportunitiesdiminished.Urbanareasreportedhigherincreasesinunemploymentandjoblosses.TheNCR,RegionIV-AandRegionIIIsufferedmorethantheotherregionsbecausetheyholdabouthalf(46percent)ofemploymentintheindustryandservicessectors.(Map3)

62 Estimatesfromindependentresearchgroupsshowthatunemploymentishigherandestimatedatabove20percentin2008(PulseAsia,2009;SocialWeatherStations,2009a).Theirdefinitionofunemploymentisdifferenttothegovernment’sofficialdefinitionintwoaspects:(1)unemploymentismeasuredbasedontheadultlaborforcepopulation,i.e.,thosewhoareatleast18yearsoldincontrasttothe15yearsoldandaboveusedingovernmentestimates;and(2)itdoesnotusethe“availabilityforwork”criterionusedinthegovernment’sdefinition.Formoredetails,seeNationalStatisticsOffice(www.census.gov.ph),PulseAsia(2009),andSocialWeatherStations(www.sws.org.ph).

63 DatafromvariousroundsoftheLaborForceSurvey64 Source:NSO,2009LaborForceSurveyResults.


Map 3: Impact on Informal Livelihoods, by Region


Post-Disaster Impacts

Theassessmentoflossesestimatestheimpactofthedisasteronemploymentandincomeoftheaffectedpersonsandhouseholdsinvolvedinproductiveactivities.Itiscalculatedonthebasisofthedamageandlossesestimatedineachoftheproductivesectors(agriculture,industryandservices)usingastandardmethodology.

Naturaldisastershaveanoveralladversesocio-economicimpact.Theyconstituteamajorthreattoemploymentsincetheydepleteproductiveassetsandgeneratelossesofincome.About170millionworkdays,equivalenttoabout664,000one-yearjobs,werelostduetothedisasters’effectonpeople’slivelihoods.ThisrepresentsaboutfourpercentoftotalemploymentpriortothedisasterintheaffectedsixregionsinLuzon.TotallostincomeduetothedisasteramountedtoPhp50.3billion.Thisincomelossaffectedparticularlyworkersoftheinformaleconomywithfamily-basedlivelihoods.Ifleftunaddressed,thedamagesandlossessustainedbythevarioussectorsintheaffectedareaswillcontinuetoweighinonworkersandhouseholdsincomesin2010.

ResultsofinterviewswithmicrofinanceinstitutionsaroundLuzonvalidatesignificantlivelihoodincomelossesintheirlocalities.TheMicrofinanceCouncilofthePhilippinesreported164,588clientsacross20microfinanceinstitutions(MFIs)wereaffectedbythetyphoons.Becauseofdamagestotheirownproperties,MFIsarestrugglingtokeepoperationsafloat,muchlessservemicro-enterpriseswhohavelosttheirlivelihoods.Somecooperatives,likeTAOManagementService&Multi–PurposeCooperativeinPasig,wereunabletoprovidecredittomemberswiththelittlecapitaltheyhaveandbecausefewmembersaremakingpaymentsatthistime.

Acrossthesectors,commercesustainedthebiggestlossesinemploymentandincomesin2009(Figure8aand8b).Commercerepresentsabout65percentoftotallostincome,amountingtoPhp32.6billion.Thetemporaryclosedownofsomefirmsandhome-basedenterprisesbecauseofthefloodinganddamagestopropertyandfirmequipmentreducedproductioninthewholesaleandretailtradesubsectorbyaboutfourpercentofitsgrossvalueaddedin2009.Themanufacturingindustryincurredthesecondbiggestlossintermsofincomesandemployment,losingabout 150,000work-yearsduetothedisasterandaboutPhp13.0billioninincomes.IncomelossesintheagriculturesectorsamountedtoaboutPhp3.7million,equivalenttoabout7percentoftotalincomelossesand11percentofworkers’lostincomesinthecommercialsector.Averagewagesinagricultureintheaffectedregionsarelowerthanthelegislatedminimumwageintheseareasby 20-40percent.Incomelossesintheagriculturesectorin2009wereresultsoffloodedandsiltedfarms,(partofwhichwillrecoverinthenextseasonandpartarenowmadeunproductive),fishpondsthatoverflowed,andlivestockthatdrownedintheflood.Theimpactofdamagestoagriculturallandsisexpectedtocauseadditionalemploymentandincomelossestoworkersinthesectorin2010,ifleftunaddressed.

Figure 8a: Sector Share to Total Losses in Income

Figure 8b: Sector Share to Total Losses in Workdays


ThebiggestlossinincomesisconcentratedintheNCRandRegionIII. Total income losses in NCR wereestimatedatPhp22.9billionandatPhp12.8billionforRegionIII.Thesetworegionscommand33percentofthenationaloutputandabout28percentofthetotalemploymentinwholesaleandretailtrade.Together,theyalsoaccountforabouthalfofaffectedwholesaleandretailtradeestablishments,mostofwhichareworkersinhome-basedandsmallormicroenterprises.65 This suggeststhat,intermsoflivelihoodslost,workersintheinthetrade-relatedsectorinthesetworegionssufferedthebiggestlosses.(Figure9)

Figure 9: Total Income Losses, by Region (in Php million)

Informalsectorworkersarethosewhohavebeenaffectedthemost. Theworkersandmicro-employersintheinformalsectorarethemostvulnerabletoshocksprovokedbyexceptionalnaturalevents,especiallythesmalltradersandvendors,food-relatedproducers,serviceproviders,theself-employedagriculturalworkersandallthoserelyingonsurvivallivelihoodactivities.Thepost-disastersocio-economicsituationfurtherincreasedtheirvulnerabilityintermsoflimitedopportunities.Incommerce,whichincurredthebiggestincomelosses,about60percentareself-employed.

Recovery Needs

OutofthePhp50.4billionestimatedlossesinlivelihoodincomes,Php38.1billionneedstoberecoveredinsomeformofemergencyandlivelihoodassistancetosupportaffectedworkersandhouseholds.Ofthetotalestimatedlivelihoodslosses,smallandhome-basedenterprisescanrefinanceabout24percent,orPhp12.3billion,oftheirlossesontheirown.Basedontheresultsofthesurveyconductedamongdifferenttypesandsizesofenterprises66,13percentofmicro-entrepreneurscanrecoverlostincomesfromremittancesandloans/giftsfromrelatives,whileanother11percentwillseektorefinancetheirlossesfrommoneylenders.Thegovernmentisalreadyaddressingthepost-disastersituationandhasmadeavailablereliefassistance,mostlyfoodforaffectedindividuals,amounttoPhp352.8 million.67

Developingastrategyforproductivelivelihoodshelpstobetterorientinvestmentsatrecoveringfromthedamagesandlossescausedbytyphoonswhilealsoreducingtherisksoffutureincomelossesduetosimilarshocks.Thisstrategyshouldaddressindividualandcommunity-levelrisksinproductivelivelihoodsinaninterrelatedway.Itisunderpinnedbyaprogramthataimstogenerateimmediateincomesforprioritytargetgroupsandincreasesemploymentopportunitiesforthedisplaced.This

65 SeealsothePDNAreportontheenterprisesector.66 Rapidassessmentontheimpactofthedisasteronenterprises,commissionedforthePDNA.SeealsothePDNAreport

ontheenterprisesector.67 NDCCUpdateSituationReportNo.47,11November2009.


programamountstoPhp15.0billion.68Itshouldbecomplementedbypolicymeasuresthatfacilitatethelivelihoodrecoveryresponsetofuturedisasters.(Table57)

Table 57: Priority Activities to Recover Lost Livelihood Incomes (in Php million)

Activities Year 1 Year 2 and 3

COMPONENT A – Short-term, targeting priority groups

Immediateemergencyjobcreationthroughlabour-intensiveschemes(cash/foodforwork)generatingfivemillionworkingdaysequivalenttosixmonthsofworkfor70,000people(materials,wages,technicalassistance,supervisionandadministration)

3,290.0 -

Restorationofproductivelivelihoodassetsofmicro-entrepreneurs(materials(@US$200/beneficiary),technicalassistance,supervisionandadministration)

940.0 -

Restorationofproductiveassetsofwomenentrepreneurs(materials(@US$200/beneficiary),technicalassistance,supervisionandadministration)

470.0 -

COMPONENT B – Medium-term, targeting geographical areas

Labor-basedinvestmentinsocioeconomicandproductiveinfrastructurethroughlabor-intensiveschemesforpublicworks(cash/foodforwork)generating10millionworkingdaysequivalenttosixmonthsofworkfor140,000people(materials,wages,technicalassistance,supervisionandadministration)

940.0 5,640.0

Supporttojob-seekersthroughemploymentservicesandprovisionofskill-training 385.4 220.9

Supporttomicroentrepreneursforthescalingupoflocalmicroenterprises 366.6 329.0

Capacitydevelopmentoflocalpartnersincludingassociationsofproducers,workersandmicro-entrepreneurs,andbusinessserviceproviders

51.7 32.9

Supporttolocalmicrofinanceinstitutionstoimprovequalityofserviceandperformance

643.9 1,217.3

Supportforenhancingthepreparednessoflocalauthoritiesforlivelihoodrecoveryinviewoffuturedisasters

51.7 32.9

COMPONENT C – Medium-long term initiatives at policy level

Supporttointerrelatednationalpoliciesandfinancialmechanismsfacilitatinglivelihoodrecoveryresponseandthedevelopmentofthefinancialsectorandbusiness development services

145.7 145.7

Support to labor-related institutions that enhance employability, social protection andotheraspectsoflaboradministrationinpost-disastersituations

84.6 79.9

TOTAL 7,369.6 7,698.6

Component A: Generating emergency employment and income support for priority target groups

Publicworksprogramsprovideshort-termincomesupporttofamiliesofunskilledworkerswhohavetemporarilylosttheirjobs,whilealsodeliveringbasicservices.ThegovernmentthroughtheDSWDimplementedacash-for-workprogramtoprovidetemporaryemploymenttoaffectedfamiliesparticipatingintheclearingoperation.Sofar,theprogramhired1,808individualsinNCRandRegionIV-AandpaidoutPhp1.9millioninwages.

Thegoalofthiscomponentistorespondtopriorityneeds,avoiddeteriorationofthesocio-economicsituationandprovidethemostaffectedpeople(suchasthedisplaced)withemergencyjobopportunitiesandincome.Thiswouldincludedevelopingamechanismthatthegovernmentcaneasilytapintimesofdisasterstorespondmoreswiftlyandmitigatetheimpactsofsuddenincomelosses.Mainactivitiestobeimplementedare:(i)emergencytemporaryjobs(cash/foodforwork)for

68 Though not possible to calculate in detail, recovery and reconstruction activities in the other sectors covered by the PDNAareexpectedtogeneratesufficientlivelihoodincomestoclosetheremainingneedsgap.


prioritygroups;and(ii)assistancetorestoringlostproductivelivelihoodassetsforprioritygroups(e.g.,micro-entrepreneurs)throughcashtransfers.

Withregardtojobcreation,anestimatedPhp4.2billionwouldberequiredtoimplementapublicworksprogramforthedurationofthereconstructionphase(Table56).Thelaborintensivenatureofpublicworkswouldcover210,000workers(oneworkerperhousehold)intheaffectedregionswhoseincomeshavebeenseverelyreducedbecausetheylosttheirlivelihoodsorjobs.Theworkwouldincludethefirstsixmonthsofrebuildingandreconstructingdamagedinfrastructure69.Thewagewouldbesetat75percentoftheaveragemonthlywageofunskilledworkersinthenon-agriculturesector70,inlinewiththeexistingwagerateofthecash-for-workprogramofthegovernment.Foodforworkactivitiestargetinghighlyvulnerablehouseholdswouldbecarriedoutincircumstanceswherefoodisscarceandwageslowormarketmechanismsarenotoperating.Theprogramwouldalsoaccountforimplementationcostsfordatacollectiontoidentifybeneficiaries,monitoring,andgeneraladministration.Thisusuallytakesupabout10percentoftotalprojectcost.

Component B: Applying local economic recovery measures to increase employment opportunities and facilitating reintegration of displaced people targeting specific priority areas.

Thegoalofthiscomponentistoconsolidateinitialrecoveryandcontributetocreatingconditionsthatpromoteincreasedemploymentamongtheaffectedpopulationatthelocallevel.Mainactivitiestobeimplementedinclude:(i)labor-basedinvestmentinsocio-economicandproductiveinfrastructureincombination,usingparticipatoryapproaches71;(ii)supporttojob-seekersthroughemploymentservicesandprovisionofskill-training;(iii)supporttomicroentrepreneursandscalinguplocalmicroenterprises;(iv)supporttomicroentrepreneursandcapacitydevelopmentoflocalpartnersincludingassociationsofproducers,workersandmicro-entrepreneurs,andbusinessserviceproviders;(v)supporttolocalmicrofinanceinstitutionstoimprovequalityofserviceandperformance;and(vi)supportforenhancingthepreparednessoflocalauthoritiesforlivelihoodrecoveryforfuturedisasters.

Component C: Supporting active employment policies, social protection schemes for the poor and the application of decent working conditions.

Inadditiontoprovidingaffectedpeoplewiththeemergencyassistancetorecovertheirlivelihoodsintheformofpublicworksandcashtransfers,itisessentialtoensurethatlivelihoodriskreductionmeasuresaretakenbythemostvulnerablegroups,particularlyinhighriskareaswhicharepronetotheeffectsofthenextcycloneseason.Thisnotonlyholdsforinfrastructureandbasicservices.Itisalsoneededintermsoffocusingonpeople’slivelihoodswithaviewtoincreasingtheirresilience–ensuringbetterpreparednesstocopewiththeimpactsontheirlivelihoodandbereadytoquicklyre-establishnormalworkingconditions.

Thegoalistoprogressivelycreateanenablingenvironmentthroughactiveemploymentpoliciesandcontributetothetransitiontosustainable,long-termdevelopmentthroughproductiveemploymentanddecentwork.Mainactivitiestobeimplemented:(i)supporttointerrelatednationalpoliciesandfinancialmechanisms;(ii)supporttotheestablishmentofregulatoryframeworksforthedevelopmentofthefinancialsectorandbusinessdevelopmentservices;(iii)supporttolabor-relatedinstitutionsthatenhanceemployability,socialprotectionandotheraspectsoflaboradministrationinpost-disastersituations.

69 SeethePDNAreportsonthevariousinfrastructuresectors70 DepartmentofLaborandEmployment,2008WageSurvey71 SeealsothePDNAreportonsocialprotectionforbroadercommunity-basedrecoveryactivities


Allthesemeasuresfocusprimarilyontheworkersandsmallentrepreneursintheinformalsector,inviewofthetolltheyhavepaidasaresulttherecentdisasters,andalsoinconsiderationoftheirincreasedvulnerabilitytonaturalhazardriskandthelackofappropriateriskcopinginstruments.Inthis sense, the crisis provoked by the disaster represents an opportunity to improve local economic efficiencyandgrowth.Theeconomicgrowthimplicationsofsuchacomprehensivepost-disasterlivelihoodrecoveryapproachcannotbeunderestimated.Temporaryhumanitariansolutionsarecertainlyessentialtopartiallyrestorethelivelihoodsoftheprioritygroups,buttheyneedtobeaccompaniedbymoretransitional,medium-term,measurestobringpeoplebacktotheirpre-disasterwelfarelevelsandensurethesustainablerecoveryofjobsandmicroincome-generatingactivitieslost.


Social Impacts and Vulnerable Groups Introduction

Anassessmentofthesocialimpacts72ofthetyphoonswasconductedinurbancommunitiesinMetroManila73 and rural communitiesinaffectedareasofLuzon74.InMetroManilatheassessmentwascarriedoutbytheInstituteofPhilippineCulture(IPC)withthesupportofcivilsocietyorganizations75 activeinthebarangaysvisited.ResearchinaffectedareasofLuzonwascarriedoutbyajointteamcomprisedofstafffromtheDSWD,WorldBank,andtheUN76.Theteamusedqualitativemethodsofdatacollectiontocarryouttheassessmentincludingparticipantobservation,in-depthinterviewsandFocusGroupDiscussions.Findingsfromtheassessmentarepresentedbasedonthethreekeyareasofenquiry:(i)socioeconomicimpactwithspecificemphasisonthelivelihoodandcopingstrategiesofvulnerablegroups,(ii)socialrelationsandcohesion,and(iii)governance.

Socio-economic impact

Livelihoodshavebeenseverelydisrupted.Inruralareas,farmersandagriculturallaborerswereparticularlyhardhit.Aneartotallossofcropsandlivestockwasreportedacrossallsitesvisitedandlandhasbecometemporarily,andinsomecases,permanently,unusable.Inthecoastalareasvisitedyieldsfromfishingdroppedsignificantly.Migrationtoanotherbarangay,toManilaorabroadwasnotconsideredafeasibleoption.Themaincopingstrategyadoptedwastotakeontemporarywork.Thisisparticularlychallenginginruralareaswheretherearefewopportunitiestoearnanoff-farmincome.Morediversifiedlivelihoodstrategiesinurbanareasindicateagreaterpotentialforhouseholdstorecover.Thisisparticularlytruewherefamilieshavevariedsourcesofincome.Themostseverelyaffectedhouseholdsinurbanareaswerethosethatreliedonasinglehome-basedbusinessasbothequipmentandinventorywereoftenlost.Governmentassistancecurrentlybeingprovidedtore-establishthesehouseholdsandmicro-businessesislimited.

Sourcesofcreditregularlyusedpriortothestormsoftenbecameunavailable.Wherehouseholdsareabletoborrow,theyfrequentlyuseloanstocoverbasicexpendituresandtopaybackotherloans.Householdshavehadtofurtherreduceexpensesbycuttingdownonfood.Therearereportsofchildrenbeingtakenoutofschoolandofolderchildrenworking.Withfewassetsandnolandtosellmanyofthemostvulnerablehouseholdsfeartheymaynotbeabletorecover.

72 Thefindingspresentedinthisreportarepreliminary,afullsocialimpactreportwiththedetailedinformationcollectedinspecificsitesiscurrentlyunderpreparation.

73 MunicipalitiesandbarangaysvisitedinMetroManilaandRizalwere:KasiglahanVillage1(SanJose,Montalban),DoñaImelda(QuezonCity),Camacho(Nangka)andMarikinaHeights(MarikinaCity),Maybunga(PasigCity),Southville,Caingin(StaRosaCity)andMalaban,SantaCruz(Laguna).

74 MunicipalitiesandbarangaysvisitedinNorthernandSouthernLuzontheywere:Botolan,(Zambales),RosalesandSanFabian(Pangasinan),Santa(IllocosSur),Naguilian(LaUnion),Baliwag,Bustos,SanIldefonso(Bulacan),CabanatuanCityandPalayanCity(NuevaEcija),Puguis,LaTrinidad(Benguet).

75 TheseincludedPartnershipofPhilippineSupportServiceAgencies,JohnJ.CarrollInstituteonChurchandSocialIssues,CommunityOrganizersMultiversity,UrbanPoorAssociates,CommunityOrganizationofthePhilippinesEnterprise,CommunityMortgageProgram,churchparishes,PhilippineBusinessforSocialProgressandHomelessPeople’sFederation.

76 ThesocialassessmentalsobenefittedfromsomepreliminaryinformationcollectedbyvariousIASCClustersduringtheirinitialrapidfieldsassessments(includingNationalCapitalRegion,RegionsI,III,IV-A).

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Social relations and cohesion

Thefamilyisthemainsourceofsupport.Inthemajorityofcasestheimmediatefamilyremainedtogether,withnoinstancesofdependentsbeingsenttostaywithrelatives.Familiesplayedakeyroleinprovidingcash,accommodationandfood.Financialsupportprovidedwasusedforbasichouseholdexpendituresbutwasinsufficienttore-establishlivelihoods.Remittancesfromoverseasarenotaviablecopingstrategyforthepoorandvulnerablehouseholdsinthecommunity.OndoyandPepenghavenothadasignificantimpactonintra-householdrelations,withbothgenderandintergenerationalrolesremainingunchanged.Therewererelativelyfewinstancesofcollaborativebehaviorinruralareas,incontrasttothesituationinurbanareas.Theexceptionwasindigenouscommunitieswhereresourceswherepooledtocarryoutritualstore-establishasenseofnormalcyafterthedisaster.FormalhomeownersandneighborhoodassociationsinMetroManilaplayedanimportantroleinthedistributionofreliefgoods.Therewerenosignificantreportsofincreasedinsecurityintheareasvisited.

Governance

Previousexperienceofmoderatefloodingresultedinhouseholdsbeingreluctanttoleaveinspiteofwarningsinsomeareas.Thereadinessoflocalgovernmentstorespondtothefloodingvariedsignificantly.Emergencypreparednessplanswerenotsystematicallyimplemented.Reliefwasprovidedinallareasvisitedbutwithvariablequalityandpromptness.Thiswaslinkedtothefactthatreliefwasprovidedthroughanumberofsourceswithnominimumstandardsadheredtoacrosssites.Whiletherewerenoreportsofgroupsexcludedfromassistancetherewereanumberofunmetneeds(includingnon-fooditems,hygieneproducts,shelteraswellasbasichealthservices,education,waterandsanitationandpsycho-socialsupport).Therewerereportsofpoliticalinfluenceintheallocationofrelief,withtheprovisionofassistancebeingpersonalizedinanumberofinstances.Communitiesvisitedhavenotyetbeenconsultedontheirneedsforrelocationandrestorationoflivelihoods.Thishascreatedagreatdealofuncertaintyregardingtheprocess.Therewasmixedresponsetorelocation.Communitiesinurbanareas,thosehighlydependentontheirplaceofresidenceforincomeandindigenousgroupswerethemostreluctanttomove.Ruralcommunitiesweremoreopentorelocation.Allstressedtheimportanceofbeingabletopursueviablelivelihoodstrategiesinanynewareaofresidence.Capitalwassystematicallyconsideredthekeyinputneededtoresumeincomegeneratingactivities.

Tohelphouseholdsandcommunitiesrecovermorequickly,severalshort-terminterventionsareproposed:(i)cashtransferstohelpthemostvulnerablere-establishtheirhouseholds(Php1.1billion),(ii)communityblockgrantstoestablishbasicservicesandotherpublicgoodsnotsupportedbytheothersectors(Php315million);(iii)traumacounselingforseverelyaffectedindividuals(Php160million).Anyrelocationofhouseholdsorcommunitiesneedstoincludeasystematicprocessofconsultationandtakeintoaccountgroupswithparticularneeds.Thisappliesinparticulartoindigenouscommunitieswhosecollectiveattachmenttoancestrallandmeansastrongpreferenceforremainingintheircurrentareasofresidence.Furthermore,thespecificprotectionneedsofwomen,children,theelderlyandpeopleofdisabilitieswillrequireconsiderationwhenplanningfortemporaryrelocationandpermanentresettlementsites.Inthisregard,buildingcapacityofrelevantlocalandcentralgovernmentinstitutionsindisasterpreparednessandmonitoringthelongertermimpactswouldbeimportantstepstoimprovetheresponsetofuturedisasters.


Socio-Economic Impacts

‘We left everything. Nobody helped us. We saved ourselves, we saved our children” – Woman in Tent City2,temporaryrelocationcenterinBotolan,Zambales.

Livelihoods

Livelihoodshavebeenseverelydisrupted.Farmersandagriculturallaborerswereparticularlyhardhit.OndoyandPepenghitimmediatelybeforeharvesttime.Theneartotallossofcropsandlivestockwasreportedacrossallsitesvisited.Almostwithoutexceptionlandwasmadetemporarilyunproductive.DamagetoirrigationsystemswasreportedbothinZambalesandSanta.Bothofthesefactorssignificantlyreducethelikelihoodthatfarmerswillbeabletoplantagainintimeforthenextagriculturalseason.Riversideareasareparticularlyaffected.Whereseverefloodinghascausedshiftsinthecourseoftheriver,publiclandsometimesusedtogrowvegetableshasbeenlost.Fisherfolk(outsidetheLagunaarea)diversifiedtheirlivelihoodstrategiespriortothefloods. Nearly all communitiesvisitedhadtakenupfarmingduetodecreasingcatchessincethe1990’s. The coastal areasvisitedaresubjecttorecurrentfloodingandseasurges.Therewas,therefore,asysteminplacetosecureboatsandfishingequipmentpriortoPepeng.Yieldsfromfishingdroppedsignificantlyfollowingtheflooding.77

Morediversifiedlivelihoodstrategiesinperi-urbanandurbanareasindicateagreaterpotentialofhouseholdstorecover.Thisisparticularlytrueoffamilieswithtwodistinctsourcesofincomeandwhereoneofthemembersasasalariedjob.Therewere,however,reportsofsmallbusinessesintheMetroManilaareaclosingtemporarilyandsendingworkershome(Marikina,Rizal),aswellasofdomesticworkersandconstructionworkerslosingtheirjobsduetoprolongedabsences.

Themostseverelyaffectedhouseholdsinurbanareaswerethosethatreliedonasinglehome-basebusinessforincome(sari-saristores,eateries,shoemaking,rugmaking,streetvendorsandtricycledriversforexample).Inthemajorityofcases,bothequipmentandinventorywaslost.Theabilityofthesehouseholdstorecoverisfurtherhamperedbyverylimitedaccesstocreditandinsomecasesbypre-existingdebt.Withhouseholdsdrasticallyreducingexpensesthosesmallbusinessesthatcontinueoperating(shoesellers,tricycledriversandsari-saristores)reportedreducedincome.TherearealsoindicationsofstoreownersnotbeingabletocompetewiththeinfluxofreliefgoodsinsomeareasofManila.

Capitalwasconsideredthekeyinputtobeabletorestorelostlivelihoods.Thereisastrongpreferenceforreturningtoone’spreviousoccupation.SomehouseholdsoutsideMetroManiladidindicatethattheywouldbewillingtotake-upalternativelivelihoodactivities,forwhichtheywouldalsoneednewskills.Participantsoftenexpressedconcernsaboutwhethertheywouldbeabletopursuetheircurrentlivelihoodstrategyintherelocationsitesbeingenvisaged.

Coping strategies

“I asked help from the barangay, hoping that they could provide me with maybe 3 or 5 roof sheets, but nothing came along. I picked up whatever was lying around, and fashioned it into a kubo (makeshift house). I also picked up a bed and cushion, and some clothes. We have no forks and spoons. I went to Gabaldon Elementary School, to look for some forks and spoons, and some kaldero (pot used for cooking rice). For now we have a small kubo, and we all just squeeze in. We need to bear with the situation, and we can only rely on our child (for income). But that should not be the case, so I pick up waste, recyclable materials, so that I can earn some money to be able to buy rice and coffee”–WomaninNatividad,Naguilian(SanFernandoLaUnion).

77 FisherfolkintheLagunaareareportedatemporaryincreaseinfishcatchesimmediatelyfollowingOndoy.


Temporary work

Thereislimitedgovernmentassistancefocusedonpublicemploymentandlivelihoodrestorationcurrentlybeingprovidedinthesitesvisited. TheonlyschemespecificallymentionedbythecommunitieswastheSelf-EmploymentAssistance–Kaunlaran(SEA-K)78intwoperi-urban/urbansites.79Inaddition,therewerereportsofaCashforWorkschemeimplementedbyaprivatefoundationinoneoftheneighborhoodsvisitedinMetroManila.

Themaincopingstrategyadoptedis,therefore,totakeontemporaryworkwhereavailable. This is particularlychallenginginruralareaswheretherearefewopportunitiestoearnoff-farmincomeandlimitedskillsbeyondthoseusedinfarmingandfishing.Theextensivedamagetofieldsalsomeansthatopportunitiesfordailyagriculturalworkarenowfewandfarbetween.Temporaryworkinconstructionwasthemostcommonlymentionedoccupationbymeninruralareas.Thenumberofdaysofworkamonthcould,however,beasfewasfive80.Wheretheycouldnotresumetheirformerwork(oftensellingfishorvegetables,owningsari-saristores,workingasmanicurists)womenmostcommonlytookinlaundryorstarteddomesticwork.DatafromMetroManilaindicatesthat,unlikeinruralareas,afewnewlivelihoodopportunitieshaveopenedup.Theymostlybenefitmen,asinthecaseofwatertransportinlakesidecommunities,pangangalakal (buyingandsellingscrapmaterial),constructionworkandauto-repair.

Householdssufferedsignificantreductionsinincome.ThedailyincomeoftemporaryworkreportedincommunitiesvisitedoutsideMetroManilavariedbetweenPhp50toPhp150(fordailyagriculturalworksuchasweeding)andbetweenPhp100andPhp300inManila.Wherenoothersourcesofincomeareavailablebothmenandwomenhavetakenuphazardouswork(collectingandloadingsandfromriverbanksorwastepicking).ItisimportanttonotethatforsomecommunitiesinMetroManila,thepoorstateofroadsmeansthattheyhavetoincurincreasedtransportcoststogettowork(uptoathirdoftheirdailywagesinthecaseofSta.Rosa).

Migrationtoanotherbarangay,toManilaorabroadwasrarelyconsideredanoption.Inthetwoinstanceswheremigrationwasmentionedasanalternative,theintervieweesinquestionhadeitherrelativesabroadorhadthemselvesbeenoverseasworkers.Themajorityofparticipantsinthediscussionsclarifiedthattheywouldhavenowheretostayiftheymovedelsewhereandthatrentingwouldbetooexpensive.Inadditiontheyclarifiedthattheyhadnoconnectionsthatcouldhelpthemfindajob.

Debt

“We are not allowed to default (on loan), we all pitch in to be able to pay the loan… During these times of difficulty, we sacrifice on food. We eat fish paste and moringa. We forego pork, sometimes we also forego sugar, coffee and soft drinks. We do not like to have a bad credit record… We limit our food to vegetables, and skip meat. We also do not buy clothes. For our children, their daily allowance is reduced from Php 10 to Php 2. We also forego their milk… Also, instead of replacing the damaged roof sheets and walls, we resort to patching the house.”

Ownersofsmallbusinesses,invariablywomen,borrowedregularlybeforeOndoyandPepeng.Loansweremostcommonlysoughtfrominformallenderstopurchasesupplies.Priortotheflooding,loans

78SEA-KisDSWD’smicrofinancestrategyforpoorindividualswithentrepreneurialskillsbyprovidingnon-collateral,interest-freeseedcapital,payablewithin1-2years.

79 SanIldefonso,BulacanandPalayanCity,NuevaEcija80 Regularoff-farmworkwasonlyobservedinoneofthesitedvisitedinSantawheretheconstructionofanearbyroad

providedworkforaperiodofsixmonthstoasmallgroupofmen.


weretakenoutonarollingbasis,everysixmonths.Theywerepaidweekly(ordailyinMetroManila)withanaverageinterestof20percentandaPhp50/dailypenaltyfordefaultingonpayment.Loanstakenoutbyownersofsari-saristoresandhome-basedbusinessrangedfromPhp1,000toPhp5,000.Accesstocreditfrommicro-financeinstitutionswaslimitedacrossfieldsites.Micro-creditinstitutionswerepresentinonlysixofthebarangaysvisitedoutsideMetroManila.Moreovertheyonlyreachedareducednumberofbusinessownersineachofthesesites.Theconditionsoftheloansweremorefavorable.Interestchargedrangesfrom5to10percentwithnopenaltyincurredforlatepayment.Inexceptionalcasesmicro-creditorganizationswereabletoextendadditionalcredittotheirmemberseventhoughtheymighthavelostallassets.Thiswasprovidediftheyhadagoodcreditrecord.

Themainimpactofthefloodingwastocloseoffsourcesofcredit(usuallyinformallenders)forthemostaffectedhouseholds.Whileborrowingtermsremainedunchanged,thelossofassetsusedascollateralmeantthatthosefamilieswhosehouseswereseverelydamagedwerenolongerabletoborrow.Inoneoftheurbansitesvisited,womenclarifiedthatloansfrominformallendersareoftenpreferredincasesofemergencyasthecashisimmediatelymadeavailable.Thereisnoapplicationandnoapprovalprocesswhichcanbelengthyinthecaseofmicro-creditinstitutions.Wherehouseholdsareabletoborrowtheyareusingpartoftheloanstocoverbasichouseholdexpenditures.Loanrepaymentisapriorityexpenseforallborrowinghouseholds.Thiswasthecaseevenintheinstanceswherethereisnopenaltyforlatepayment,sincefutureabilitytoborrowdependsonagoodcreditrecord.

Inruralareasthedebtburdenfornon-titledfarmersseemsparticularlyheavy.Inadditiontotheloanspreviouslytakenoutforsmallbusinessactivities,thereareadditionalloanswithland-ownerstopurchaseseedsandotherinputsforplanting.Theseareusuallypaidbackaftertheharvest.Withthelossofcropstheseloansarenowpendingpayment(accruinginterest)andfarmerswillhavetoborrowfurtherforthenextharvest.Whereaffectedhouseholdsarestillabletoborrow,theyaretakingoutadditionalloanstorepaypre-existingdebt.Withfewassetsandnolandtosellitisdifficulttoenvisagehowthemajorityofruralhouseholdswouldbeabletorecoverwithoutadditionalcashinjections.

Negative coping strategies

Evenwheretemporaryworkisavailablethereductioninincome(andoftentheneedtorepaypendingloans),meansthathouseholdshavehadtodrasticallyreduceexpenses. CommunitiesinruralareasandinMetroManilareportedlimitingthenumberofmeals,aswellasthequantityanddiversityoffoodeaten81.Insomeareas,thereisheavyrelianceonrelief(rice,noodles,andsardines).Affectedfamiliesthathaveeithermovedoutoftemporaryrelocationcentersorlivinginmunicipalitiesthatdidnotsetuptemporaryrelocationsitesareparticularlyhardit.Participantsinthediscussionswereoftenusingshrimppasteasaflavoringforriceandhavestoppedbuyingporkandvegetablesaltogether.OneoftheparticipantsinthediscussionsinSanta,IlocosSurdescribeditasfollows:“We eat water cabbage, snails, and whatever might be available”.

Childrenaredroppingoutofschoolorattendingclassesirregularlyinsomeareas.Thisisparticularlytruewherefamilieshavebeenrelocatedfurtherawayfromtheschoolandcannolongeraffordtransportandfoodcosts.Distancefromtheschoolseemstoakeyfactordeterminingschoolattendance.Eveninruralareasandamonghighlyindebtedcommunitieschildrencontinuedtogo

81 ThesefindingsarecorroboratedbythepreliminaryinformationcollectedaspartoftheUNEmergencyFoodSecurityAssessment.


toschooliftheycouldwalkthereandcouldcomehomeforlunch.Amongbetter-offfamilies82 there werereportsofyoungpeoplehavingtoabandonvocationaltrainingasfamiliescouldnotaffordtopaythesecondsemesterfees.Forthosefamilieswhowereplanningtosenddaughtersabroad(asnursesforexample)thismeantthatanimportantsourceofincomeforthefamilyhasbeen,atleasttemporarily,closed-off.ThistrendwasalsoobservedintheMetroManila.There,collegeseniorsunabletopaytuitioncostsweretakingonworktocontributetothehouseholdincomeand/ortosavefortuitioncosts.Inaddition,therewerereportsintheareasvisitedofchildrenandyoungadultstakingupworkinthecollectionandtradingofscrapmaterial.

Social Relations and Cohesion

Acrossallareasvisited,theimmediatefamilywasthemainsourceoffinancialsupportforbasichouseholdneeds.Inbothruralandurbanareas,relativesplayedakeyroleinprovidingcash,accommodation,andfoodintheaftermathofthefloods.InthemajorityofcasesthefinancialsupportreceivedfromrelativeswaslimitedwithsomevariationbetweenMetroManilaandotherareasinLuzon.ThesizeofreportedcontributionsfromfamilyvariedbetweenPhp500and700outsideManilaandbetweenPhp1,000and10,000inMetroManila.Inallcasesthesewereone-offcontributions.Theexplanationoftenprovidedwasthatrelativesinnearbyareashadthemselvesbeenaffectedand/orwereequallypoor.Inallsitesvisited(withoneexception)thefinancialcontributionreceivedwasnotsufficienttore-establishlostsmallbusinessesortore-startfarming.Therewereconsistentreportsacrossruralandurbanareasoffinancialcontributionsfromfamiliesbeingspentonbasichouseholdneeds(includingfood,medicine,andwater).Thegeneraltrendobservedwasthatveryfewpeopleinthecommunitiesvisitedhadrelativesabroad.Becauseoftheinvestmentinvolvedingoingtoworkoverseashouseholdswiththistypeofsupporttendedtobebetter-off.Remittancesfromoverseasdonotappeartoworkasacopingstrategyorinsurancemechanismforthepoororvulnerablehousesinthecommunity.Insomecasestheserelativeswerenotabletohelpsubstantially.83 A more common strategyinperi-urbanareaswasforoneofthespouses(invariablytheman)tohaveasalariedjobintheclosesttownandtoregularlysendcashhome.

Intra-householdrelationsdonotappeartohavesignificantlychangedasaresultofOndoyandPepeng. Whilewomenaretakingonadditionalworkoutsidethehome,thereisnoevidencethatgenderroleswithinthehouseholdarechanging.Thisisequallytrueofruralareas,wherewomenoftenseemtohavemoretemporaryworkopportunitiesthanmen.Forexample,wherewomenarenowworkingawayfromhome(asdomesticworkers)child-careresponsibilitiesarehandedovertooldersiblingsortofemaleneighbors,eventhoughthefathersmightnotcurrentlyhaveajob.Womencontinuetobetheonestakingoutandmanagingloansfrominformallendersandmicro-financeinstitutions.Wheresupportnetworks(femalefamilymembers,neighborsforexample)arenotavailablethiscouldresultinanincreasedwork-loadforwomen.Duringtherescueandimmediateaftermathofthefloods,mentendedtotakemorerisks,stayingbehindtosecurethehouseandreturningsoonertodeterminedamageandstartrepairs.Womenandchildrenwereevacuatedfirst.Theywerealsothelasttoreturnhomefromtemporaryaccommodationcenters,whichcouldplacethematincreasedrisk.84

Inter-generationalrelationsalsoremainunchanged.Thereisagreatersenseofurgencyamongyouthtogetemployedorstartasmallbusiness.InMetroManilayoungpeopleparticipatinginthediscussionsreferredtotheroletheyplayedintherescueofelderlyrelatives,neighbors,andyounger

82 Titledfarmersinruralareasforexample.83 InfactinoneinstancerelativesintheUShadrecentlylosttheirjobsandwerethemselvesinfinancialdifficulties.84 Therewerenoreportsofgender-basedviolenceorviolence/abuseofchildreninthesitesvisitedduringthePDNA

exercise.TheIASCProtectionClusterassessmenthascollectedsomereportsofincidentsofgender-basedviolenceinevacuationcenters,relocationsitesandareasatrisk.


siblings.Thisisoftenlinkedtoanincreasedsenseofresponsibilityandconfidenceintheirabilitytotakeonbiggertasks(inandoutsidethehome).

Inthevastmajorityofcasesfamiliestendtoremaintogether.TheexceptionsnotedwerewheremenworkedinnearbyareaspriortoOndoyandPepeng.Inthesecaseswhiletheywenthomebrieflytoprovideimmediatesupporttheyhavenowreturnedtoresumetheirjobs.Secondly,wherefamiliesarestillinrelocationcenterstherewereinstancesreportedwheremenhavereturnedtothebarangayoforigintostartrebuildingmakeshifthousing.Inthesecaseswomenandchildrenremaininthetemporaryrelocationsitewheretheycontinuetoreceivereliefassistance.Therewerenoreportsofchildrenbeingsenttolivewithotherrelatives,asaresultofthefloods.Inaddition,intheareasvisitedtherewerenoreportsofseparatedchildreninthecommunitiesvisited.However,theIASCProtectionClusterpreliminaryprotectionassessmentindicatesthatmorethan100childrencouldbecurrentlymissing.85

Community cohesion

Therewerefewinstancesofformalizedcollaborativebehaviorinruralareas,incontrasttothesituationobservedinurbanareas(includingMetroManila). Criticalsupportwasprovidedbyneighborsduringtheheightofthefloodsandinitsimmediateaftermath.Inafewinstances,affectedfamiliesalsoturnedtotheirbetter-offneighborsforsmallemergencyloans(Php500forbasicneedsoutsideMetroManila).Followingthat,however, communitiesinruralareasrarelyreportedinstanceswherethecommunityworkedtogether(beforeorafterPepeng).IndigenouscommunitiesinLaTrinidad(Benguet),weretheexception.Inthiscase,thecommunitypooledresourcestocarryoutthenecessaryritualstore-establishasenseofnormalcy.Ritualplaysakeyroleinmaintainingcommunitycohesionamongindigenousgroups.Theserequiretheslaughteringofanimalsandareprimarilyaimedatcleansingcommunitymemberswhohavebeenincontactwiththedead.Thesewillhavetotakeplacebeforelivelihoodactivitiescanberesumed.Membersofthecommunitywhohavesufferedheavylossesreportedthattheyhaveneverdoubtedthereadinessoftheirneighborstosupportthemintheperformanceofthese,oftencostly,rituals.Inaddition,therewereveryfewcasesofcommunitybasedorganizationsactiveinruralareas.Onlytwoinstancesofmoresystematiccooperationwereobservedacrossthesitesvisited(SanFabianandZambales).Theyappeartobelinkedtothepresenceofastrongbarangayleadershipand/ortothepresenceofNGOs.86

Thesituationisdifferentinurbanandperi-urbanareas,wherecollaborativebehaviorwasmorecommonlyfound.Thistooktheshapeoffrequentlysharingfoodamongneighbors,takingturnstomonitornewsoncomingstorms,poolingresourcestoensurethecleanlinessoftemporaryaccommodationsites,andtakingcareofneighbors’children.InMetroManila,therewerereportsofyoungpeopleinparticularprovidingsupporttorelativesaswellasneighborsandpeersincleaning,collectinggarbageandrepackinganddistributingreliefgoods.MoresystematicformsofcollaborationtendedtotakeplaceinareasthatareregularlyfloodedsuchasLaguna.Inaddition,formalhomeownersandneighborhoodassociationsinManilaplayedanimportantroleinthedistributionofreliefgoods.Theirprimaryrolewastheidentificationoftheaffectedhouseholdsandthedistributionofreliefstamps.

85 TheIASCprotectionassessmentcollectedsomereportsofchildrenbeingplacedininstitutionsasfamiliesarenolongerabletodealwiththeburdenofcare.Theresultsoftheassessmentareexpectedtobeavailableshortly.

86 InSanFabian,womenmembersofalocalmicro-creditassociationtookturnsintakingcareofeachother’schildren.Thesamecommunityreportedinstanceswherefamilieshadsharedreliefgoodstobettermeettheneedsofindividualfamilies.Hygieneproductshadbeenexchangedforrice,forexample.Secondly,inoneoftherelocationareasvisitedinRosales,thecommunityhadorganizeditselfinto“clusters”usedforthedistributionofreliefgoods.Buildingonthisstructure,thefamiliesatthesiteformedacommitteetodecideontheallocationofreliefwhenthiswasnotsufficienttobesharedequally.ThecommitteetookontheadditionalroleofcommunicatingwiththeMunicipalSocialWelfareandDevelopmentstaffonthelivingconditionsintherelocationsites.


WhiletherewerenodirectreportsofincreasedcriminalityintheareasvisitedoutsideMetroManila, familymemberstookdirectactionstoavoidpropertytheft.Oftenparticipantsinthediscussionsreferredtothefactthattheyhadnothinglefttobestolen,whichexplainedwhytherehadbeennoincreasesinpettycrime.Inallareasvisitedmenhadreturnedtotheirhousesassoonaspossibletosafe-keepanymaterialsorassetsthatcouldbesalvaged.TherewerereportsoflootinginsomeareasofMontalban(MetroManila).Asari-saristoreownerrecountedthatinoneinstancethieveshad:“sinisisid yong baha para makapasok sa tindahan at magnakaw”(divedunderwatertorobthestore).InthearasvisitedbythePDNAteamtherewerenoreportsofinter-personalviolence(includinggender-basedviolenceorviolenceagainstchildren)inthecommunitiesvisited.

InoneoftherelocationareasvisitedinZambales,thereweresomereportsoftensionsbetweennon-indigenous(”lowlanders”)andindigenousgroups(“highlanders”).Thiswasexplainedbytheindigenouscommunityasamanifestationoflong-standingprejudicesheldagainstthemby“lowlanders”.Indigenousleadersexplainedthattheytriedtoignorethesecommentsandattitudes.InterestinglythefloodingwasseenbytheseindigenousgroupsasalessonfromGod(Abo)inhowpeopleshouldlearnhowtolivetogether.“Tanda lang ito ng kung paano natin aayusin ang ating sarili lalo na sa harap ng Panginoon”. (This is a sign of how we should put ourselves in order in the eyes of our creator).87

Governance

“The councilors informed all houses about the coming storm. We tied the roofs of houses down. Before the storm arrived we were able to evacuate the family to the center. My husband and brother-in-law went back to our house. All of us here did the same thing. There are meetings to plan what to do, and everyone follows the plan. Every year this happens to us. We also know that there is already a center, and what the LGU provides. The evacuation center is in the town hall, where most people went. Some went to the Santa High School, while others went to their relatives.” Woman in Dam May, Santa (Ilocos Sur)

“The time Pepeng came, we were at home; we live beside the river. The water rose, but we did not know this. By 7pm we slept; by 9pm the water reached its peak. It was at 8pm when my husband woke me up; I told him the water won’t reach our place (Di yon darating ditto.) When it dawned upon me that it was for real, I woke up my grandchildren, and children; the books floated. My children and grandchildren ran already, but we stayed behind. The water rose from knee high, to waist high to the neck. We were lucky that a teacher called the Municipio to request for rescue. They came to fetch us, they had a number of trips. They brought them (the children) to church. We stayed behind. We had raised our things to a higher level. We thought that that would already be ok, it was only later that we found out that the whole house got washed away.” Woman in Naguilian

Emergency preparedness and relief

Previousexperienceoffloodinginfluencedhouseholds’reactionstofloodwarnings. Inareaswheremoderatefloodinghadpreviouslytakenplace(Zambales,PangasinanandMetroManilaforexample)familieshadoftenbeenreluctanttoleavetheirhousesevenwhenwarnedoftheupcomingtyphoon.InMetroManilaparticipantsexplainedthistotheteambysayingthatthefloodwarninghadbeen“Signal N.1 lang”(only signal one). Ontheotherhand,inareasthathadpreviouslyexperienced

87 ThiswasincontrastwiththefindingsofdiscussionswithindigenousgroupsinLaTrinidadwhorelatedthateventssuchasfloodingarenatural.Theseareacceptedwhenthecommunityfailstoreadtheomenssentbyancestors.Aspecificexamplerecountedbythecommunitywasthatofayoungboywhokeptseeingablackbirdshakinghisheadathimforafewdays.Takingitasasigntothefamilythegrandfathergotallfamilymemberstoleavethevillage.Theland-slidethathitthevillagehappenedthefollowingnight.


severeflooding(PalayanCity,BulachanandSanta)householdsweremoreliketoevacuateimmediatelywhenwarned.Therewerereportsoffamiliesintheseareasbringingtheirownfoodandstovestoevacuationcentersandoccasionallytheirlivestock.

Theextenttowhichmunicipalitiesandbarangayswerepreparedandreadytorespondtothefloodingvariedsignificantly.Althoughsomeofthemunicipalitiesandbarangayshaveemergencypreparednessplans,thesewerenotsystematicallyorconsistentlyimplemented.InNorthernandSouthernLuzon,therangeofresponsescanbeillustratedbytheexamplesfromSanta,IlocosSur,andNaguilian,inSanFernando,LaUnion.InSanta,therespectiverolesofthemunicipalityandofthebarangaywereclearlydefined.Apublicwarningwasissuedthreedaysbeforethetyphoon.Frequentroundswerealsomadebyemergencyteamsthedaybeforethetyphoonhittoevacuatethemorereluctantcommunitymembers.InthecaseofNaguilian,noemergencypreparednessplanwasinplace.Thelackofafloodwarning/monitoringoftherisingriverwatermeantthatasignificantnumberoffamilieswerecaughtunaware.Thispartlyexplainsthelargenumberofcasualtiesreportedinthisarea.88Rescueassistancewasprovidedbythemunicipalitiesinallvisited.Therewereconsistentreportsoftheemergencyservicesbeingoverwhelmed.Rescuecapacitywaslimitedwithanumberofreportsofaffectedpeoplebeingstrandeduptoafewdayswaitingforthewatertosubside.Basicreliefassistance(food)wasprovidedinallevacuationcenters.FoodassistancereceivedwasconsideredsufficientandadequateinthevastmajorityofcasesoutsideMetroManila.Wherefoodhadbeeninsufficienttheretendedtobeconsensusamonggroupsinterviewedthatithadbeenprovidedona“firstcomefirstservedbasis”.Whileitwasnotenoughforeveryonetherewasnosensethatdistributionhadbeeninequitable.

Thestandardofsupporttoaffectedhouseholdsvarieddependingonthemunicipality’scapacitytorespondandtheindividualdonationsreceived.Itrangedfromindividualfamilytentsinawellmaintainedsitewithpubliclighting(TentCity1,Zambales),totheprovisionofdamagedroofingsheetsinNaguilian.Wheretemporaryrelocationcenterswereestablished,thereweredelaysreportedintheassistanceprovidedtoaffectedfamilies.Thelongesttime-lagobservedwasinRosales,wherefamilieswhosehouseshadbeendestroyedstayedapproximatelytwoweeksinmakeshifthousingbuiltfromscrapmaterial,beforetheyweremovedtoevacuationsites.IASCClusterassessmentshavereportedthatinthemajorityofevacuationcentersandcommunities,vulnerableindividualsandthosewhohavespecificneedssuchaschildren,women,personswithdisabilities,olderpersonsorpersonswithserious/chronicmedicalconditionsarenotbeingidentified,whichmayrendertheprovisionofspecialassistancemoredifficult. Also,notallrelocationsiteshaveinfrastructureavailablethatareaccessibletopersonswithspecificneedswhichmaymakeitdifficultforthesegroupstoaccesswater,sanitationandotherpublicfacilities,aswellasdistributions.InMetroManila,therewerereportsofassistancenotreachingthe“interior”areasoftheneighborhoodsforseveraldays.Thevaryingstandardsofsupportislinkedtothefactthatreliefwasprovidedbyanumberofsources-government(DSWD),civilsocietyorganizations,UNagencies,privatesector,individualdonorsandfaithbasedorganizations.

Whileparticipantsinthediscussionswereextremelygratefulforthereliefreceivedtherewerereported unmet needs across all areas visited. Thiswastrueofaffectedpeopleintemporaryrelocationsitesandofthosethathadreturnedtotheirhomes.Commonconcernswereinadequateshelter,waterandsanitationfacilities,lackofappropriatemedicalcare,andofessentialnon-fooditems(cookingutensilsandstoves).Therearealsonodistributionstargetingthespecificneedsofextremelyvulnerablepersonsorpersonswithspecificneedssuchasassistivedevices,specific

88 InMetroManila,someoftheparticipantsinthediscussionsindicatedthattheyhadreceivednoearlyevacuationnoticefromBarangayofficials.TherewerecontradictoryaccountsfromBarangayofficialsinsomeoftheareas(KVIandMaybungaforexample),withreportsofhouseholdsrefusingtoleaveinspiteofthewarnings.


medicalconsumablesinmajorityofsites.89Thebulkofthereliefsupportwasfoodand therewerefewinstancesofnon-fooditemsbeingprovided.SanitarytowelsforwomenwereprovidedinonlyoneofthesitesbyaninternationalNGO.Inaddition,conditionsintemporaryrelocationscentersinMetroManilawerereportedtobeparticularlypoor.Participantsinthediscussionsreportedovercrowding,lackofelectricityandwater,closedwashrooms,andlackoffood.Whiletherewerenoreportsofgender-basedviolenceorviolence/abuseofchildreninthesitesvisited,theIASCProtectionClusterassessmenthascollectedsomereportsofincidentsofgender-basedviolenceinevacuationcenters,relocationsitesandareasatrisk.

Therewereinstancesoftraumareportedamongbothchildrenandadults.Therewerereportsofadultsstillunabletoresumetheirworkfollowingthefloodingduetotrauma.Childrenwerereportedtohavenightmaresandtorefusetogotoschoolwhenitrains.Themajorityofparticipantsinthediscussionswereeagertosharetheirexperiencesofthefloods.Relatingtheirexperiences,especiallyregardingthelossoftheirhomesandlivelihoods,wasveryemotional.OftenMSWDworkersandbarangaycaptainsandcouncilorsprovidingreliefassistancehadthemselvesbeenaffected.Thiswasfelttolimittheirabilitytorespond.Nodebriefingorcounselingsessionshadbeenorganizedinanyofthesitesvisited.WhiletheDSWDteamreportedtheirintentionofcarryingtheseouttheywereover-stretchedwiththereliefeffort.

Therewerenoreportsofparticulargroupsbeingexcludedfromthedistributionofreliefineitherrelocationareasorwithincommunities.TherewasanisolatedreportinZambalesfromamemberoftheIPcommunityofnotreceivingadequatereliefassistance.Thiswasnot,however,corroboratedbyothercommunitymembersinterviewed.IndigenousgroupsinLaTrinidaddidnotreportdiscriminationintheaccesstoreliefassistance.Localgovernmentwasconsideredresponsivetotheirneeds.Itwasnotedthatkeyofficials(includingtheGovernorandtheMayor)aremembersofindigenouscommunities.

Althoughinmostsitesvisitedpeopleexpressedgeneralsatisfactioninthewayinwhichreliefgoodsweredistributedinthreeoftheareasvisitedtherewereconcernsexpressedabouttheundueinvolvementofelectedlocalofficialsinthedistributionofrelief.Therewasasenseamongsomeoftheintervieweesthatthedistributionofreliefhadbeenhighlypersonalizedandusedbypoliticalfigurestopromotetheirimageascaringpoliticians.Theviewwasexpressedthatreliefgoodsshouldhavebeensentdirectlytoaffectedfamilieswithouttheneedformediacoverage,forexample.InMetroManilatherewasanisolatedreportbyanintervieweeinQuezonCityofaffectedpeoplebeingaskedtowhatelectoralprecincttheybelongedtopriortothedistributionofrelief.Herresponsewas:“Pag ganyan lang din kayo, layas kayo dito!”(Ifthat’swhatyouwantgetoutofhere!).

Recovery and rehabilitation

“What we want in our minds and in our hearts is houses that are forever not for temporary. You understand? They told us they were giving us a house but when?” – Woman in Rosales90

“Sana mayroon nang puhunan para mawala na isip namin sa nangyari sa amin at simulan na namin mag-isip ng recovery” - “ I wish we could have access to capital so that we could stop thinking about the disaster and start thinking about recovery” – Woman in Rosales, Pangasinan

GiventhatalltheLGUsvisitedarestilldealingwiththeimmediatereliefeffort,itisnotsurprisingthatcommunitiesreportedthattheyhadnotbeenconsultedontheirneedsforrelocationand

89 HandicapInternational’sRapidAssessmentReport,October200990 SpeakinginEnglish.


restorationoflivelihoods. Inanumberofcasestherewaslittleexpectationonthepartofthecommunitythatanysupportwouldbeprovidedbythemunicipality.Asmentionedabovetherewasastrongpreferencetoreturntoone’spreviousoccupation.Whenconsulted,affectedfamilieswereclearthatcapitalwasthemostneededinput.Thiswasfoundconsistentlyacrossallsitesvisited.

Verylimitedornoinformationwasprovidedtoaffectedcommunitiesontheplansforrelocation. ThiswastrueevenofthosemunicipalitiessuchasZambales,wherethereareconcreteplansforre-housingseverelyaffectedhouseholds.Insomecases,householdsintemporaryrelocationsiteshadheardaboutthepossibilityofahousebeingprovidedbythemunicipality.InZambales,thefamilieshadalsobeeninformedaboutthesiteforrelocation.However,innoneoftheseareas,wasthereafunctioningsystemfortheregulardisseminationofinformationtocommunities.Itwasuncleartoaffectedpeoplehowtheycouldobtaininformationabouttheprocessandthetime-frameforrelocation(orexpresstheiragreementordisagreementwiththemunicipality’sproposals).Thisseemstohavegeneratedahighdegreeofuncertaintyregardingtherelocationprocess.

Therewasamixedresponsetothethoughtofrelocationacrossruralandurbanareas.Inruralareas,familiesweremorelikelytobewillingtomove,providedthattheywereabletocontinuewiththeircurrentlivelihoods.Fisherfolkincoastalareas,forexample,clarifiedthattheywouldbewillingtomovetohighergroundbutwouldwishtomaintaintheirboatsandasmallstructureonthebeachtobeabletocontinuefishing.Indigenousgroups,however,wereextremelyreluctanttomove.AlthoughrecognizingthedangeroflivingintheirpresentlocationscommunitiesinLaTrinidadexpressedastrongdesiretoremainontheirancestralland.Theyhopeanengineeringsolutioncouldbefoundtomaketheareasafe.Theystronglywishedtobeconsultedandtoparticipateinthedesignofanyrelocation/housingplan.Inurbanandperi-urbanareastherewasalsogreatreluctancetomove.Thisreactionwasmorecommoninareasthathadseenregularbutmoderateflooding.Thereisasenseamongthesecommunitiesthattheycanadapttorecurrentfloodsandremaininthesamearea,closetotheirsourceofincomeandsocialnetworks.Wherelivelihoodsareprecarious,evenseverelyaffectedfamiliesarewillingtotakeconsiderableriskstoreturntotheirpreviouslocations.Thiswasalsotrueintheareaswherelocalgovernmenthasissuedanordertopreventhouseholdsfromreturningtoriver-banks.91

Thevastmajorityofmunicipalitiesvisitedhadplanstoestablishacoreshelterprogramtorespondtohousingneeds(atthecostofapproximatelyPhp70,000fora200m2house).Therewereanumberofreportedgapsinthebudgettobeabletoaddresstheneedsofallthefamilieswhosehouseshadbeencompletelydestroyed.ThiswasthecaseinZambales,forexample,wherefundinghadbeensecuredforhalftheaffectedhouseholds.Inothercases,suchasSanFabianandSanta,onlythepurchaseofthelandcouldbeensuredwithmunicipalfundswhilethecostofthecoreshelterprogramwouldberequestedfromnationalgovernmentthroughtheDSWD.Therewerenofirmcommitmentsofadditionalfundingforreconstructionatthetimeofthefieldvisit.

Recommendations

Tohelpthemostvulnerablehouseholdsandcommunitiesrecovermorequickly,apackageofseveralshort-terminterventionstobeimplementedusingacommunity-basedapproachisproposed:

• Thevastmajorityofreliefwasprovidedinkindleavinganumberofunmetbasicneedsamongaffectedgroups.Inaddition,householdneedsvarysignificantlyacrosssitesandfamilycircumstances.Inanumberofalreadyhighlyindebtedareas,householdsarenowborrowingto

91 ThiswasthecaseinNaguilianwithhouseholdswhomaketheirlivingfromcollectingandloadingsandfromtheriverbed.Theyhadreturnedtotheareaimmediatelyafterthefloodingtocontinueworking.


purchasefood,medicineandtopayutilities.Themostvulnerablehouseholds(andthoseunabletoparticipateinotherincomegenerationactivitiessuchasunskilledreconstructionrelatedjobs)wouldgreatlybenefitfromtargetedcashtransferstomeettheirmostpressinghouseholdexpenses.ThecashtransferprogramofPhp1billionwouldtargethouseholdswhosehomeswereseverelydamagedinaffectedareas92.Thedesignandimplementationofanycashtransferprogramshouldtakeinternationalbestpracticeinthisareaintoconsideration.93

• Thereiswidespreaduncertaintyregardingtherelocationprocess.Wheretheycan,householdsarekeepingapresenceintherelocationsitewhilealreadystartingtorebuildmakeshifthousing,ofteninlocationsatrisk.Therearebudgetshortfallsfortheimplementationofrelocationprogramsinallsitesvisited.Whilethecoreshelterprogramswillneedtobeexpanded,itwillalsobeimportanttostrengthenandsystematizetheprocessesofconsultationwithaffectedcommunities.Inadditiontothecashtransfersmentionedaboveforhouseholdsmostpressingneeds,reconstructionandrelocationcanbefurthersupportedthroughcommunityblockgrantstoestablishbasicservicesinnewsitesandsupportlivelihoodrestorationwithafocusonhighlyvulnerablegroups.

• Thereareclearindicationsoftraumaamongchildrenandadultsinthemostaffectedbarangays.Nopsycho-socialinterventionshadbeenundertakenintheareasvisitedatthetimewhenfieldworkwasconducted.Theareaswheretherehasbeensignificantlossoflifewouldneedbeprioritizedforimmediatesupport(bytheDepartmentofHealthandDWSDteams)toensurethatthemostaffectedindividualscanbegintorecover.

Additionalassessmentsarenecessaryprovidecrucialinformationtoplanthesupportprovidedtovulnerablegroupsforrestorationoflivelihoodsand/orrelocationasfollows:

• Indigenouscommunitiesarereluctanttoleavetheircurrentareasofresidenceduetotheircollectiveattachmenttotheirancestrallands.Additionalinformationontheirspecificrelocationandlivelihoodneedsisrequiredtoeffectivelyplanrecoveryactivitiesinrelevantregions.

• Temporaryrelocationsiteslikelytobeinplaceuntiltheresettlementprocessiscompletedwouldbenefitfromsignificantimprovements.Inadditiontotheestablishmentofbasicservices,planningandupgradingofthesesiteswillneedtotakeintoaccounttheprotectionneedsofwomen,children,personswithspecificneedsandothervulnerablegroups.ArapidassessmentofthesesitesbytheGovernmentofthePhilippines(GOP)ReliefandRehabilitationCommitteeisexpectedtoprovideimportantinformationontheadditionalfeaturesandservicesneededattheselocations.

• BuildingthecapacityoftheGOPReliefandRehabilitationCommitteeatcentralandlocallevelsindisasterpreparednessandmonitoringoflongertermimpactswouldbeimportantstepstoimprovetheresponsetofuturedisasters.Thiscaninclude:(i)reviewingemergencystaffingplansofrelevantinstitutions,(ii)creatingandimplementingatrainingprogramforcoordinateddisasterresponse(includingforfamilytracingandreunification),(iii)revisingminimumstandardsfordisasterresponse,and(iv)establishingarosteroftrainedpersonneltobedeployedindisastersituations.

92 TheestimatescollectedbytheHousingsectorindicatethat28,000householdshadtheirhometotallydestroyedbyflooding.AtransfersizeofPhp5,000providedasalump-sum(ratherthanrecurringmonthlypayments)totargetedhouseholdswouldhelpfamiliescoverregularexpensesaswellasreplacebasichouseholditemslostduringtheflooding.Thisisalsoexpectedtoreducetheadministrativeandlogisticalburdenofadministeringtheprogram.

93 Additionaldetailsregardinglivelihoodrestorationsupport(includinginkindassistancewhererelevant)areprovidedintheAgricultureandEmploymentforexample.


Social Impact Assessment - Recovery Framework



The most affectedcommunities and households are able to recover basic assets and meet urgent needswithoutresorting to negative coping strategies.

Thereareanumberofgapsreportedinthein-kindreliefassistanceprovidedtoaffectedpopulations.Theneedsofvulnerable households are highly variable(dependingonthespecificimpactofthedisasterontheirlivelihoods,familycomposition,pre-existingdebtburden).Anumberofcasesofhighlyindebtedhouseholdswereidentifiedduringthesocialimpactassessment.The social impact assessment identifiedahighlevelofuncertaintyregardingtherelocationprocess.Affectedcommunitieshavelittleornoinformationregardingplansatthemunicipallevel.There is reluctance to relocate to areaswherenoviablelivelihoodalternativesseemavailable.The social impact assessment identifiedcasesoftraumaamongchildren and adults in all sites visited.Thelimitedresponsecapacityinseverelyaffectedareasmeantthatnostress-debriefingor counseling sessions have taken place.

Providethemostaffectedcommunitieswithacomprehensive rehabilitation packagewiththefollowingthreecomponents:

Household re-establishment •grants targeted to the most vulnerablehouseholds(Php1.1billion)Establishaprocessof•consultationandofsharinginformationonrehabilitationand relocation options availabletocommunities.Develop community developmentsub-projects,including investment in economic and social infrastructure,followingtheKalahi-CIDSapproach(Php315million)Trauma counseling conducted •byDSWD/DOHforthemostaffectedhouseholdsin7,500barangays.Counselingsessionswilltakeintoaccountthespecificneedsofparticulargroups(children,elderly,sick/disabled)(Php159.6million).

In addition, labor intensive public worksprograms(andadditionalskillstrainingrequired)willbecosted in the Livelihoods and Employmentsectorreport.

Livelihood restoration and /orrelocationinterventions areinformedby a solid understanding ofthespecificneedsofvulnerable groups

Thereislimitedinformationavailableonthespecificrelocation/livelihoodneedsofIndigenousGroups.Preliminaryconsultationsindicate a strong reluctance to leave theircurrentareasofresidence(duetocollectiveattachmenttoancestrallands).

Rapidassessmentofthespecificrelocation and livelihood restorationsneedsofindigenouscommunities completed by December2009withmainfindingsinforminginterventionsinrelevantregions(Php2.7million)Assessmentofprotectionneeds carried out in temporary relocationsitesbyGOP(withafocusonthepreventionofviolenceagainstwomen,childrenandothervulnerablegroups).Thefindingsofthisassessmentwillinformthemeasuresplannedunder the housing sector, to improve temporary relocation sites.(Php11.2million)–See PDNA report on the housing sector.




Future emergency response activities effectivelycoordinated by relevant central and local government agencies(inthecontextoftheGOPReliefandRehabilitation Committee)

Insufficientnumbersofstaffwithlimited specialized training in emergency response limited the effectivenessoftheemergencyresponseinsomeoftheareasvisited.

Reviewtheemergencypreparednessstaffingplansofrelevantagencies(includingtheDSWD)andidentifyadditionaltrainingneedsofcentral,regionalandmunicipalstaff.Create and implement a training programfordisasterresponseaimed at central, regional, provincialandmunicipalstaff(withafocusondisasterproneregions and municipalities and including protection in emergencies).Reviseminimumstandardsfordisasterresponse(includingminimumnumbersofstaffbasedontheexpectedcaseload,corefunctionsandskillsrequiredatmunicipal level, and evacuation centermanagement).Establisharosteroftrainedpersonnel to be deployed in disaster situations as reinforcementtomunicipalandregionalteams.Php60.8million(covers costs for technical assistance and training needs –i.e. no recurrent costs).

Php100million(covers costs for technical assistance and training needs only –i.e. no recurrent costs)

Disaster response effectivelymonitored and corrective action taken as appropriate withactiveinvolvementoflocal institutions

Monitortheimpactofthe response to Ondoy andPepengthrough:(a)follow–upsocialimpact assessment at (i)sixmonths,(ii)oneyear,(iii)twoyears,(iii)threeyears.(Php14.4million)(b)threeroundsofcommunity report cardsinfiveaffectedregions.(Php4.7million)

Php 1.8 billion Php 1.6 billion Php 119.1 million


Financial Sector

Summary

Thefinancialsectorassessmentfocuseson:(i)thestatusofthebankingandinsurancesectors,asthemostpertinentforfinancingthepost-disasterrecoveryandon(ii)thereconstructionfinancingneedsoftheprivatesector,withaviewtowardsettingupmechanismstominimizefinancinggapsintheaftermathoffuturecatastrophes.Overall,thedirectdamagessustainedbythefinancialsectorhavebeenlimited:startingwithcapitalmarkets,thePhilippinesStockExchangesufferednophysicallosses,nordiditsManilabrokers,althoughtheextentofdamagetoitsregionalbrokersremainsunknown.Whiletradevolumesdidfallfirstby50,andthenby25percentduringthetwodaysbeforetyphoonOndoystruck,thiswastheonlyperceptibleimpact.Leasingappearstobesimilarlyunaffected,withthelargestleasingcompanyinthecountryreportingonlysixsmallleasesbeingaffected,allofthemrequiringonlyshort-termrestructuring.Finally,italsoappearsthatthelossesordamagessufferedbythebankingsectorhavenotbeensignificantenoughtoimpairitsoperationsoritsrobustness,asthetotalvolumeofloansthatreportedlymayneedtoberestructuredrepresentsonly0.8percentofthetotalloansoutstandinginthecountry.94

Thebankingsectorcouldplayaleadingroleinprovidingfinancingfortherecoveryandreconstructionoftheprivatefirmsaffectedbythetyphoonssince:(i)existingborrowerslargelyappeartobeabletoreturntoproductivitywithoutnewfinanceand(ii)thereisahighdegreeofliquidityinthebankingsector.

• Facilitating lending to affected enterprises. ByusingMultilateralDevelopmentBanks(MDB)fundstopartlyguaranteethenewportfolioofloanstoMicroSmallandMediumEnterprises(MSME)damagedbythetyphoons,thegovernmentcouldenticeasmallnumberofcarefullychosenprivatebankstousetheirownfundstocoverthesefinancialneeds.Loansshouldbecarefullypricedandstructuredtobeaffordable(e.g.between8percentand13percentp.a.,fora3to5yearterm)forthevastmajorityofMSMEs.Byaddingasecondlosscover95fromaninternationalprivatesectorbank,oranIFC/DEG/FMO-typedevelopmentinstitution,itshouldbepossibletoatleastdoublethevolumeoffundingflowingtoimpactedbusinesses,comparedtoanapproachwhereonlygovernmentfundsaredisbursed.Theestimatedfinancingrequiredfromthegovernment/MDBstodesign,fundandmanagesuchaRiskMitigationFacility(RMF)amountstoPhp5.6billion96.

• Grants to affected enterprises. Thereisalsoaroleforgrantstoplay,inassistingMSMEsthathavenoproductiveassetsleftandnegligiblecreditworthiness.Thesepaymentsshouldbedistributedbymicrofinanceinstitutions(MFIs),thusincreasingtheirexposuretonewmicro-entrepreneurs.TotalfundingforthisgrantsprogramcouldbearoundPhp614million.Financialneedsarehighlydependentuponotherassessmentscarriedoutbydifferentsectors,inparticularDisasterRiskManagement,CommerceandIndustry,andHousing.

94 Thisispartlybecausebanks’lendinglevelsarelow–withonly51percentofbankingassetsinvestedinloans;thismeansthatPhp2.8billionofassetsinthebankingsystemcurrentlyremainsun-lent.

95 SeeappendixfordescriptionandgraphofhowsuchaRiskMitigationFacilitycouldwork.96 ConsistingofPhp5.6billionfor75percentofthe(50percentfirstlosscover,plusPhp25millionforaninitialstudyand

thenmanagementoftheRMF(incl.trainingofpartnerbankstaff).

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• Facilitating lending to LGUs. WhilethehousingsectorassessmentmakesthecaseforLGU-financeforlow-incomehousing,thissectionfocusesonhowtofacilitateprivatesectorlendingtoLGUsforthispurpose.Sincethedegreeofguaranteerequiredisexpectedtobefarlowerthanfordisaster-struckMSMEs,weassume15percentisrequiredonaPhp10.6billionportfolio,comingtoatotalgovernment/MDBcontributionofPhp1.6billion.97

• Insuring against future disasters. TheDisasterRiskManagementsectionclearlyshowstheimportanceoflesseningtheimpactofsuchdisastersinthefuture.Giventheimportanceforthe private sector to manage the LGU Catastrophe Insurance Pool, the cost linked to such managementisaddressedinthissection.Hiringahighlyreputableandproventeamandcoveringtheircostsfor18monthsuntilthePoolisself-financing,isestimatedtocostaroundPhp60million.Whilenoconcretemeasuresareputforwardtohelpincreasefinanceoftheconsumerretailsector,wedorecommendthatastudybeconductedtoexplorewhatmeasuresmightbetaken,mostofalltoencouragemoremicro-housingloansintheimpactedareas.

Thissetofinterventionsisrelativelyshort-terminnatureandcertainlyintermsofspending,astheyallaimtoserveascatalystsforsystemsthatbecomeself-financingrelativelyrapidly.Ascanbeseenbelow,thetotalgovernment/MDBfundingrequired,allofwhichshouldbedisbursedwithin18monthsoftheprogramsstarting,isestimatedatPhp7,899millionofwhich7,758millionisalreadyaccountedforintheenterpriseandhousingsectorreportsleavingatotalofPhp141.6millionseparatelyaccountedforinthissection.

Background

Situation prior to Ondoy & Pepeng98

Main Concerns Main Strengths and/or Opportunities

BanksstillhaveanoverhangofNPAsleftfromtheAsianCrisis, and are thus reluctant to go into sectors they considerofhigherrisk

•Financialsectornotsignificantlyimpactedbytyphoons;

BanksinthePhilippinesallstillprocessSMEloanssimilarlytocorporateloans,i.e.,tooslowandexpensive

•Banksareveryliquid,andgenerallykeentogrowtheirMSMEportfolios–buttheyarenotcomfortablewiththistypeofrisk

•Thebankingsectoristhusverywellplacedtoleadprivatesectorreconstructionfinancing,iftheycanaffordablysharetherisk

Theprivateinsurancesectoristoosmallandfragmentedtobecountedonforoverallcatastropheriskcoverage.

•Thereisplentyofroomfortheprivateinsurancesectorto grow,andexistingsuccessesinmicro-insurancecouldbereplicated.

Overall,theglobalfinancialcrisishashadaverylimitedimpactonthebankingsectorinthePhilippines,whichputsthesectorinastrongpositiontoleadthefinancingofalargepartoftheprivatesector’spost-disasterreconstructionrequirements.

MostoftheratedPhilippinebankshaveadequateresiliencetorideoutthecurrenteconomicdownturn.Fitchratingoutlooksarethereforestable.Philippinebankshavereasonablygood

97 LGUsaregenerallynotconsideredhighriskandrealestateportfoliosarefarmorepalatabletobanks.98 ThissectionislargelybasedonthesummaryofthebankingsectorprovidedbyHasnahOmar,SeniorFinancialSector

SpecialistattheADB,andalsoon“StressTestonPhilippineBanks”,FitchRatings,August2009.


capitalizationwithanaveragereportedcoreTier1capitaladequacyratioof11percentatend-2008forthe11largebanksratedbyFitch.

Loangrowthhasyettobeaffectedbytheglobalfinancialcrisis.Totalloansoutstanding(netofinter-bank)postedadouble-digitgrowthof21.5percentasofendDecember2008comparedtotheprecedingyear;thiswasthehighestcreditexpansionsince1997.Corporateloansstillaccountedformorethanhalfofthebankingsystem’sloanportfolioat57.9percent.Nevertheless,thebankingsector’sloantoassetratioisaverylow51percentasofJune2009,probablystillreflectingtheunresolvedsituationwithAsianCrisisNon-PerformingAssets(NPAs).

Assetqualityexhibitedafairlyrapidimprovementoverthepastseveralyears.However,thelevelofproblemassetsisstillhigh.Thebankingindustryhasbeguntosteadilyincreaseprovisioningforbadlossesdespitepostingveryhighlevelsofreservesrelativetononperformingloans(NPL).ThePhilippines’bankingsectorstillsuffersfromthefactthatmanybankshavenoteffectivelydivestedtheiroverhangofproblemassetsacquiredduringthe1997crisis.Philippinesbankshaveoptedtooff-loadtheirNPLassetstoSpecialPurposeVehicles(SPVs),thisdeferredlossthenbeingamortizedoveraperiodoftenyears.Thison-goingNPLchallengeinevitablyhasanegativeimpactonbanks’appetiteforcreditrisk.

PrudentialsupervisionforthebankingsectorhasbeenstrengthenedoverthepastseveralyearswiththeInternationalAccountingStandards(IAS)fullyadopted.However,complicatingtheBangko Sentral ng Pilipinas’s(BSP)effortsisthefactthatsupervisorsdonothaveimmunityfromprosecutionfordecisionstakeninthelineofduty,whichinhibitssounddecision-making.99

Themassiveliquidityinthebankingsystem,therelativelylowreturnsavailablefromtreasurybillsoverthelastfewyears,togetherwithdecreasedmarginsincorporatebankingallmeanthatbanksarekeentoincreasetheirMSMEportfolios,butstillveryuncomfortablewiththattypeofrisk,andwiththemethodologiesneededtoconductsuchbankingprofitably.ThesectionsbelowoutlineanapproachthatcouldhelpthebankstoovercomethesehurdlesandleadthefinancingofMSMEsimpactedbythetyphoons.

Insurance Sector Situation prior to Ondoy & Pepeng100

ItisnotatallclearthattheprivateinsurancesectorinthePhilippinesisinapositiontogrowsufficientlyrapidlytocovermostofthecatastropheriskthatisthusfaruninsured.

The insurance sector in the Philippines is considered a medium-sized market, despite being much lessdevelopedthansomeofitsimmediateneighbors.101 According to the Insurance Commission, the2007non-lifeinsurancecoveragefortyphoonsamountedtoPhp500.7billion,andforfloodingtotaledPhp454.1billion,i.e.,7.5percentand6.8percentof2007nominalGDP,respectively.

Thecountrystandsoutforitshighlyfragmentedinsurancemarket,withover150insurancecompanies(thoughthetopthreeheld72%ofthesector’sassets,accordingto2005figures).The

99 Otherregulatory/prudentialbarrierstolendinginclude:(i)verycostlyandtime-consumingreal-estatecollateralregistrationandliquidationprocedures;(ii)unreliablelandtitles;(iii)inefficient,un-centralizedandexpensive(non-vehicle)moveablecollateralregistration;(iv)limitedalternativedisputeresolutionmechanisms(i.e.onlyaverysmalldisputescourt);(v)BSPExaminers’tendencytostillfocusoverlyoncollateralcoverage;(vi)on-goinginsistencethatbanksuseauditedfinancialstatementsandincometaxreturns,whicharelargelyfalsified(thoughsmallbusinessesaretemporarilyexempt).

100 Sources:“ThePhilippinesInsuranceMarket”Reuters,July2008;theIFC’sFinancialSectorReview,2007;and“InsuranceEnvironment”,MarshPhilippines,2006.

101 BusinessMonitoringInternationalin2008gavethePhilippinesanIBER(InsuranceBusinessEnvironmentRating)of51.4.


insurancesectorhasrelativelyfewbarrierstoentry.Bothsegmentsareopentoparticipationbyforeigngroups.ThePhilippineinsuranceindustryishighlydependentonforeignreinsurersbecauselocalindustrydemandforreinsuranceexceedsindigenouscapacity.

TheInsuranceAssociationestimatesthatonlyabout12percentofenterprisesactuallyhaveaformofcoverage.Thenumberofhouseholdsinsuredisbelow2percent.Notonlyistheprivatesectorunder-insured,butgovernment-ownedhousingisalsoinadequatelyinsuredagainstnaturaldisasters,asaregovernment-ownedutilities.Thelowpenetrationratesindicatethatthereisobviouslyroomforgrowth,especiallyintheeventofaneconomicupturnandimprovementstothetaxregime.

Insuranceformicro-enterpriseisfairlydevelopedintermsoflifeandloaninsurance,asverymanyMFIsoffersuchinsuranceautomaticallyaspartoftheirmicro-loans.However,non-lifeinsuranceisstillburgeoning,thoughCARDMBAhasplayedaleadingroleindevelopingsuchinsuranceatthemicrolevel,andensuringthatmuchofitisre-insured.OtherMFIsarenowinterestedinreplicatingtheCARDMBAmodel,thoughitisunclearyetifanyoutsideassistancewouldbenecessarytoensurethisisdonesuccessfully.

Giventhefragmentedandunder-developednatureoftheinsuranceindustry,therecommendationsbelowfocusonhowtohelpmanageanLGU-ledcatastropheinsurancepool.However,theprivateinsurancesector,andparticularlymicro-insurance,shouldalsobesupported.

Damage and Losses102

Banking Sector

Dataobtainedondamageandlossestothebankingsectordoesnotcurrentlydifferentiatebetweenprivateandgovernmentfinancialinstitutions(GFIs),butgiventhattheshareofGFIs’assetscomparedtototalbankingassetsinthePhilippinesisonlyaround1.6percent,itissafetoassumethatvirtuallyallthedamageandlossesthatarereportedhavebeenbornebytheprivatesector.Anoverviewoftheimpactsonthefinancialsectorisprovidedhere.Itimportanttonote,however,thatfortheoverallestimatesofdamageandlosses,anyapparentlossesincurredinthebankingportfolioandthroughinsuranceclaimsarealreadycapturedandcomputedintheproductiveandsocialsectors.

Sofar,thereisnodataavailablefromtheBSPontheaveragesizeofdefaultedloans,noronthelocationofthedefaultedloansandbreakdownofoverdueloansbysizeorsectorofborrower.However,accessibledataindicatethattheimpactondepositshasbeenminimal,exceptforaninitialscarewhendepositorsinbranchesclosedbythefloodsfearedfortheirsavings.Currently,allcustomersareeitherbeingservedbytheirownbankingunit,oraneighboringone.TheBSPindicatesthatatotalof169bankshavedescribedthemselvesasbeingaffectedbythefloods,withatotalof681 banking units103impacted(asofNovember10th2009).ByNovember10th,only5bankingunitsremainedoutofcommission.Therewere277ATMsaffected,butbyNovember6,2009,only21remainednon-operational.Banksarelargelyinsuredagainstdamagestotheirphysicalproperties(i.e.,branches,ATMs,computers,etc.)

Ofthe169banksaffected,55bankshaveprovidedBSPwithestimatesofloanvolumesneedingrestructuring;theseunverifiedamountstotaledPhp17.9billion.Theotheraffected114banksdidnotreporttheamountoflosses.SincethetotalportfoliooftheseparticularbanksamountstoPhp26.5billionweassumerelativelysmalllosses,valuedat25percentoftheirloanstoberestructured,

102 Alldamageandlossesrelatedtothefinancialsectorarealreadyreflectedinotherrelevantsectors.103 349unitslinkedtouniversal/commercialbanks,98tothriftbanks,173toruralbanks,and61tocooperativebanks.


totalingPhp6.6billion.ThiswouldgiveatotalvolumeofloansneedingrestructuringofPhp24.5billion,i.e.22percentofalllossestoprivateenterprises.104Toputthingsinperspective,thisisonly0.8percentoftotalloansoutstandingtothePhilippinebankingsectorasofJune2009.

Basedbothondiscussionswithbanksandleasingcompanies,andontheresultsoftheenterprisesurveycommissionedforthePDNA,itwouldappearthatthedamagetoborrowersislargelymanageable,andthatpaymentsshouldbebacktonormalwithin3-6months.Noneofthebanks(commercialandrural)orleasingcompaniesthatwetalkedtohadmorethanahandfulofborrowersthatmightbeinlong-termarrearsduetothefloods.EventheCARDGroup,withbetween80,000-100,000microfinanceclientsaffectedbythetyphoons(thisisestimatedbyPinoyMEtorepresentoverhalfofallPhilippinemicrofinanceborrowers[frommajorMFIs]impacted),estimatesthatvirtuallyallofthoseclientswillsimplyneeda4-weekmoratorium,notevenarestructuringoftheloans.ThePDNAenterprisesurveyshowedthat,ofthosethatdidsaytheywouldhavedifficultyinmakingtheirloanpayments,only14percentstatedthattheyhadnohopeofpayingbacktheirloan(conversationswiththebankswouldsuggestthateventhisfigureisexaggerated).Inourdiscussionswithtwoofthelargestleasingcompanies(OrixMetroandBPILeasing),theycountedatotalofonly8smallclientsthathaverequestedrestructuringormoratoria,noneofthemforperiodslongerthan3months.Inotherwords,onlyaverysmallproportionoftheloansinneedofrestructuringareexpectedtobecomewrite-offs.

Insurance Sector

Thelatestestimate(November11th,2009)oftheInsuranceCommissionsuggeststhatinsuranceclaimsrelatedtothetwotyphoonsaresurprisinglylow,amountingtoPhp8.2billion(Php7.0billionfromnon-motor,Php1.2billionfrommotorinsurance),consistingof11,160claims(4,194non-motor,6,966motor).Thisrepresentsonly0.9percentofthetotal(P954.9billion)non-lifeinsurancecoverforflooding(Php454billion)andfortyphoons(Php501billion)thatwasissuedin2007,andonly9.2percentofalllossesincurredbyenterprisesduetothetwotyphoons,accordingtolatestWorldBankestimates.Wehaveaskedforclarificationtoverifytheaccuracyofthesereportedfigures.TheInsuranceCommissionisnotawareofanyinsurancecompaniesbeinginanysortoffinancialdifficultyfollowingtheseclaims.

Onthesideofmicrofinanceinstitutionswhoissuetheirowninsurancetotheirclients,(probablythelargestproviderofinsuranceistheCARDGroup–ofatotalofover1,000,000clients),theyestimatedupto100,000clientsthatareaffected(mostofthesedidnothaveflood/typhooninsurance).Theirmaininsurancecompany,CARDMBA(re-insuredinpartthroughPioneer)willbepayingclaimsofbetweenPhp35-40million,andtheyassuredthattheycancopewiththesamesortofdisasteragain.

Policy Responses to the Disaster

TheBSPhasofferedverytimelyandsignificantregulatoryrelieftoallbanksintheaffectedregions.Accordingtothebanks’requests,existingloansofborrowersinaffectedareaswillbeexcludedfromthecomputationofpastdueratios(forloansmaturinguptoDec.2010),providedthattheseborrowersarerestructuredorgivenrelief.105TheBSPprovidedfurtherreliefbyreducingthegeneral

104 AsperthemostrecentcalculationsoftheCommerceandIndustryteam,totallossestoenterprisesamountedtoPhp111.4billion,whiletheneeds(recoveryrequirements)totaledPhp66.9billion.

105 UnderSection306.4oftheManualofRegulationsforBanks(MORB),“RestructuredloanswhosetermsofpaymenthavenotbeencompliedwithandwhichhavebecomepastdueshallbegovernedbytheprovisionsofSec.322,”whichrequiresthedowngradinginclassificationoftheloantoalowercategory.Forexample,ifaloanisunclassifiedbeforetherestructuring(whichrequiresa0%allowanceforlosses),it


loanlossprovisionforrestructuredloansofborrowersinaffectedareastoonepercentfromfivepercent(alsouptoDecember2010).Furthermore,thepenaltiesfordelaysinthesubmissionofsupervisoryreportsduebetweenSeptember30andNovember30,2009weresuspended.ForThrift,RuralandCooperativeBankswithHQsinaffectedareas,thereisalsoanon-impositionofpenaltiesonlegalreservedeficiencies,providedthesedeficiencieswerenotpre-existing.

Withrespecttoitsrediscountingfacilities,whichthebanksusetofinancetheirownlendingtotheirclients,theBSPnowallowsbankstorestructurerediscountedloanswiththeBSP.Theinterestrateissetattherediscountingrateandtheloanscanbeforuptofiveyearsinmaturity,butbankscannotpassonthefundsatmorethan6percentabovetherediscountratetoborrowers.

Thegovernmentiscurrentlyconsideringthe“DisasterRiskManagementBill”.WhileSection17ofthisBillcallsforthegrantingof“one-year,no-interestloans”bygovernmentfinancingorlendinginstitutionstothemostaffectedsectionofthepopulationfollowingadisaster,globalpracticewouldsuggestcautioninthisregard.Thiscouldleadtoagreatnumberofentitiesintheseareasabandoningexistingbankloansforthesequasi-grants,damagingthebankingindustry106.Intheseinstances,explicitcashgrants,asdiscussedinothersectionsofthisreport,wouldbemoreadvisable.

Noparticularmeasureshavebeentakenbytheleasingindustry.Also,noknownpolicyactionhasbeentakenintheinsurancesector,exceptforasurveybytheInsuranceCommissionofnon-lifeinsurersoflossclaims.


Banking

Noneofthebanksorleasingcompaniesinterviewedbelievedthatthetyphoonshavecreatedasituationwhereasignificantnumbersoftheirborrowerswillbeunabletorepaytheirloansinthemedium-term.TheBSPreactedrapidlyandprudentlytoaccommodaterequestsforshort-termloanrepayment,moratoriaandloanrestructuringrequeststoaddresstheimpactofthetyphoonsonthebanks’portfolios.

Nevertheless,thesectorassessmentshowslossestoenterprisesofalmostPhp90billion,whilethetheoreticaldemandformid-risehousingforthedisplacedfamiliesisestimatedatoverPhp20billion.Thus,thereisclearlyalargeneedforprivatesectorfinancinggoingforward,asthesefiguresaresignificantlylargerthanwhatMDBsandtheGOParecapableofprovidingontheirown.

Mostofthehouserebuildingthatneedstotakeplacefollowingthetyphoonsislow-incomehousing.ThisisasectorwheresomeLGUshaveshownanabilitytoco-financeimpressivecomplexes,asshowninthehousingsectorneedsassessment.Forconstructiononthescalerequiredhere,noLGUswillhavethenecessaryfinancing.Itwouldbedesirableforlocaland/orinternationalbankstoprovidefinancingtotheLGUs,butthiswillonlyhappenifloansobtained,ornotesissues,areunder-written,perhapsbytheequivalentofanIFC,DEGorADB.

Therequiredinvestmentsinrecoveryandreconstructionofprivateenterprisesistheareawhere

willbeclassifiedasatleast“loansespeciallymentioned”,(whichrequiresa5%allowanceforlosses)underAppendix18oftheMORB.

106 Otherimportantquestionsinclude:Whowouldoverseetheprogram?Howwilltheprogramensurethatbribesarenotgiventoobtainsuchquasi-grants?Howwilltheybeaccountedforonbankbalancesheets?Anysuchmeasurethatmaybebothunnecessary,anddamagingtothefinancialsector,shouldinouropinionnotbemandatedbylaw,butsimplyremainanad-hocoptiondependingonthecircumstances.


theprivatebankingsectorcanplayitsmostnaturalroleinleveraginggovernment/MDBfunding,usingthelattertosharetherisksandthusaccessthehugeunusedliquidityinthebankingsystem(Php2,815billion,i.e.,49percentofbankingsectorassetsareparkedintreasurybillsorotherlow-interestoptions).

AgricultureisasectorthatPhilippinebanksaretraditionallyverywaryof.Furthermore,thevastmajorityofdamagestotheagriculturalsectorhavebeentoricegrowers,asectorthatbanksgenerallyavoidasitispoliticallysensitive,involvingpricecontrolsandsubsidies.Financingthedamagestotheagriculturalsector,therefore,wouldbeextremelychallengingtoachievethroughthebanks.

Therearemanysectionsofthepopulationthatwillnotbeabletoaffordtorepaythefinancialassistancetheyrequire–includingfamiliesthathavelosttheirhomesand/ortheirbreadwinner(s),andalsosomemicro-enterprisesthathavelostalltheirassets.Thesegroupsshouldbeassistedthroughgrantsorcash-for-workschemesthatarebestnotfinancedbythebankingsector.


Channeling relief grants to destitute micro-enterprises

Giventhedesirabilitytomaintainacleardistinctionbetweengrantsandloans(thusminimizingimpactoncreditculture),grantpaymentsarebestnotfundednorassessedbythebanks,butmerelydistributedbythem.Theseloansshouldbeofferedtoarelativelylimitednumberofeligibleenterprises.Eligibilitycriteriacouldinclude:(i)havingbusinessactivitiesexclusivelyinimpactedareas,(ii)beingabletodemonstratethatthemajorityoftheearningassetshavebeenlost,and(iii)requiringfinancinglessthanPhp50,000.Furthermore,itwouldbesensibletoassessthebusinessthatthemicro-entrepreneurplanstore-build–ifitisabusinesswithverypoorprospects,themanagersofthegrantschemecouldbeempoweredtospecifythatthegrantbeusedforthemicro-entrepreneurtoengageineconomicactivitiesthatcontributetodisaster-proofing(e.g.solidwastemanagement,drainbuildingorclearage,dredging,reforestation,etc.)

AccordingtothePulsepoll,11percentofmicroenterprisesandfivepercentofsmallbusinessescannotrepaytheirloans.Basedonthat,around10,800micro-enterprises107and350smallbusinessescouldbeeligibleforsuchgrants.AssessingloanapplicationsandattributingpaymentsshouldideallybeconductedbyanNGOorothertypeofMFI.Allsuchfundsshouldbedisbursedintobankaccountsofparticipatingbanks,whohaveagreedtochargeminimalfeesfortheremittance,andtoopenaccountsfreeofchargeandwithverysmallminimumbalances(e.g.Php500).Thiswillhelpthemicro-entrepreneurstodemonstratetheircashflowstothebank,andthusincreasethelikelihoodofbeingcreditworthyinthefuture.AssumingthatallgrantsareofPhp50,000,thiswouldrequireapoolofPhp557.5millionand,assumingafivepercentcostofdistribution,anotherPhp56.6millionfortheselectedMFItoensureproperselectionofgranteesandrapiddisbursement.

Risk sharing facilities to support financing of MSMEs

ForthoseMSMEsthatarenotentirelydestituteafterthetyphoons(i.e.thosethatcanstillearnsomeincomeandrelativelyquicklyreturntopreviouslevelsofrevenues),itmakessensetooffer‘special’loans.Loansshouldbeforlongerterms,andmoreeasilyandrapidlyaccessible.Thisallowsthegovernment/MDBfundstobeleveragedbybeingusedtoguaranteetheuseoftheprivatebanks’ownfunds.Also,thepossibilitythatasubstantialpartoftheseguaranteefundsareneverdrawnupon,andmaythusrepresentlessofaburdenonthetaxpayersand/oranopportunitytousethis

107 Basedonpreliminaryfiguresthatwillneedverificationbeforeassumptionsandbudgetsarefinalized.


fundingtoguaranteeSMElendingmorebroadlyaftertheimpactedMSMEshavebeenfinanced.

ThesefundswouldonlybeforMSMEswhocandemonstratetheyweredamagedbythetyphoons.Furthermore,atleastinitially,onlyMSMEswithnoexistingformalloanswouldbeprioritized,andonlyiforwhenitisclearthatthereisenoughfundingandcapacitytoextendloanstobankedMSMEswhohavebeenimpacted,wouldtheriskmanagementfacility(RMF)beextendedtothatgroup.ThegovernmentinpartnershipwithMDBsandothercontributorstotheRMFwouldidentifybankswillingtocommittosignificantlevelsofinvestmentintyphoon-strickenMSMEs(e.g.minimumPhp500millionportfolioofcommercialorthriftbanks,Php250millionforruralbanks).Finally,ifthecapacityandtheRMFfacilitystillallowit,theRMFcouldalsobeusedforMSMEsseekingtoinvestindisaster-proofmeasures(buildingwalls,gullies,elevatingpremises,relocatingtohigherground,building/cleaningdrains,etc.).

ThedegreeofriskbornebytheRMFwouldhavetobehigherthannormallyconsidereddesirabledueto:(i)thelowriskappetiteofPhilippinebanksingeneral,and(ii)theneedtorapidlydisbursetoalargenumberofMSMEsdespitethebanksdistrustofthissector.Itisassumedthat75percentofeachloanwouldbeguaranteedbythefacility.108

IFC’sexperienceisthatsuchRMFsworkbestwhentheyhavethefollowingattributes:(i)managedbyareputableprivatesectorfirm,orprivatesector-orienteddevelopmentinstitution;(ii)mustguaranteeallloansofaparticulartype,notallowingthepartnerbankto“cherry-pick”;(iii)shouldbeaportfolioguarantee,i.e.allloanscanbeapprovedindependentlybythepartnerbank,andareonlyverifiedpost-fact,andinbatches,bythemanagersoftheRMF;(iv)thesefacilitiesshouldbebankspecific,thuskeepingvolumesmanageable,andgivingthepartnerbanksmorecomfortthatclientinformationwillnotbeshared.

Assumingthatthegovernment/MDBdoesnotchargeforitsshareoftheguarantee,andthattheprivatesectorinternationalbankordevelopmentorganizationchargesverylittle(e.g.around2-3percentmightbefeasible)fortheirshareoftheguaranteeduetothelowrisk,theaddedcosttotheinterestratefortheborrowershouldbereasonablylow.Therecouldbesomethinglikea2-yearrampupperiod,toensureallMSMEsaffectedhadhadthechancetofigureoutiftheyneedaloan,andtohaveitprocessed,afterwhichtheramp-downperiodtotheendofthisprojectcouldbefiveyears,ifthiswasdeterminedtobethemaximumloanduration.

Givensuchahighlevelofguarantee,thegovernment/MDBsshouldhavemuchmoreleveragetodictatealongminimumduration,nofeesforpre-payment,andaninterestratecap.Bankswouldbeenticedtousetheguaranteethroughtheimpositionofacommitmentfee,andalsoaportfoliovolumeminimumbelowwhichtheRMFwouldberevoked.Asexplainedearlier,basedoncurrentdataweassumethatthetotalportfoliooffinancingtoimpactedMSMEswouldbePhp15billion,whichwouldbefinancedbyprivatebanks,willingtodosobecausetheyonlyneedtotakeon25

108 seeAnnexAforamoredetaileddescriptionofthistypeofRMF.Thegovernment/MDBs,bytaking75percentofthefirstloss(togetherwiththeprivatelocalbanktakingtheother25%ofthefirstlosses),e.g.forthefirst50percentofthefacility,canattractaprivatesectorinternationalbank,oraprivatesector-orienteddevelopmentorganizationsuchasIFC/ADB/DEG,tocover37.5%(i.e.75%ofthesecondloss50%oftheportfolio)percentoftheportfolioonasecondlossbasis-theseproportionsandamountsareofcourseindicative,andcouldchangeascircumstanceswarrant.

Assumingthat,ofthePhp66.9billionofestimatedfinancingneedsonthepartofallaffectedenterprises,only75%willbeinterestedintakingaloan.OfthatPhp50.2billionseekingbankfinancing,wefurtherassumethat30%aretheneedsoftheMSMEs.OfthePhp15billion(roundingdownforthesakeofsimplicity)requiredbyMSMEs,inthisscenario,thelocalpartnerbanksfundallofthePhp15billion;however,MDBstakeresponsibilityforPhp5.63billionoftherisk(i.e.forthefirstPhp7.5billionoftheportfolio,anyloanthatdefaultse.g.over6monthsisrefunded75%tothebankbytheMDBguarantee).BecauseoftherelativelyhighdegreeofcomfortthatloansabovethisPhp7.5billionthresholdareunlikelytodefault,anIFC/FMO/DEGcouldbeamenabletoprovidingasecondlossguaranteeforafurther37.5%oftheportfolio.


percentoftherisk(asanexample,specificsmaywellchange).Thegovernment/MDBswouldinthisscenarioprovidePhp5.6billiontoajointguarantee,withaninternationalprivatebankoraprivatesector-orientedIFIcontributingthesameamountalso.ThesefundssittingintheRMFshouldbeusedtogeneratemorerevenuesviainterestonultra-secure,international-gradeAAAinvestmentoptions.

Somepartnerbanks,especiallyruralbanks,mayalsorequirefreshfinancing,astheylackthespareliquidityofmostofthelargecommercial/universalbanks.However,withsuchaRMFinplace,suchbankswouldbeabletofindprivatefinancing,giventhattheriskbornebythebanksissolimited.

Thecostofmanagingthisfacilitywouldbecovered50percentbythegovernment/MDBsinthefirstyear,afterwhichinterestaccruedontheguaranteefacilitywouldamplysufficetocoverthesecostsfortheentire7.5yearperiodoftheprojectremaining(costsgodownaftertheramp-upperiod).ThecostsforthissixmonthperiodareestimatedatPhp20million.

Inthefirstinstance,however,therewillbeaneedforafarmoredetailedassessmentofthefinancingneedsofMSMEsinaffectedareas,intermsofvolumeandtype,togetherwiththeselectionofthepartnerbanksthatwouldbepermittedtooperatesuchRMFs–thismayrequireanotherPhp5million.

Reconstruction of low-income housing

AssistingLGUstoobtainfinancingfortheconstructionofnewlow-incomehousingstockforthosedisplacedbythefloodsisapriority.Onewaytoencourageprivatesectorbanksand/orhousingconstructiongroupstofinancetheLGUswouldbeforthegovernment/MDBstounder-writetheLGUs’requestsforfunding(eitherfrombanks,orfromcapitalmarkets).

Givenrelativestabilityofrealestateassetvaluesandrelativeeasewithwhichtheycanberepossessed,thelevelofguaranteeneededtoencourageprivatehousingfinance(say,10-20percentoftheentireportfolio)shouldbemuchlowerthanisneededforprivateenterprisefinancing;Weassumeaneedforaround35,000newhousesfordisplacedfamilies,withanaveragecostofaroundPhp600,000,butthatonly50percentofthosedisplacedfamilieswillwanttoinhabitthenewhousingandareabletomaketherequiredpayments.ThisyieldsatotalfinancingrequirementofPhp10.6billion,ofwhichLGUsareassumedcapableoffinancing25percent.FinancingtheremainingPhp7.9billionmaythenonlyrequireafirstlossguaranteeofsomePhp1.575billion(15percentofthetotalportfolio)bythegovernment/MDBstoattractsufficientprivatesectorfinance.Itshouldbeclearthatsuchfundingcanonlybeusedtobuildhousingoutsideofzonesthathavebeencategorizedashavingahighfloodrisk.

Insurance Sector

Therequirementsoftheinsurancesector,especiallyastheypertaintothecatastropheinsurancetocoversucheventsinthefuture,arewellcoveredintheDisasterRiskManagementsection.ItisclearthatthereisacrucialroleforLGUstoplayinestablishingaCatastropheInsurancePool,andthiswouldbebestdonebyhavingsuchaPoolmanagedbyarecognizedprivatesectorinsurancegroup.Thecurrentsectionwillsimplyfocusonafewaspectsofthisdevelopmentoftheinsurancesectorthatareparticularlyrelatedtotheprivatesector.

Onesensiblemeasurewouldbetomakecatastropheinsurancemandatoryforhousingloansandforbusinesscapitalinvestmentloans.Bankswillunderstandthatitisintheirowninteresttoinsuretheassetsthattheyarepartlyrelyingonforrepayment–onceallbanksareforcedtoincludesuchinsurance,nobankwillbeatadisadvantageonceitensuresitsclientshavethisprotection.Thevastlyincreasedvolumesofinsurancepoliciesmayallowpolicypremiumstodropconsiderably.Inanycase,itwillbecrucialtoensurethatpremiumsarenotsohighastosignificantlyreducethe


levelofdemandformortgagesorbusinessequipmentloans.109 It is important to note that such mandatoryinsuranceshouldonlybeputinplaceonceitisclearthatadequateandaffordablepolicieshavebeenmadeavailablebyprivateinsurancecompaniesand/oranLGUCatastropheInsurancePool,otherwisesuchameasurecouldhaveanegativeimpactonaccesstofinance.

Expandingtherangeofbanksabletoofferinsuranceproductswouldbeverybeneficial.TheBSPisalreadyconsideringtoallowruralandthriftbankstodistributeinsuranceproducts.Nofurthercostswouldberequiredforthis.However,itwouldbeimportanttoensurethatthestudiesontheviabilityofmandatoryinsurancealsolookatwhatfurthermeasuresshouldbetakentoencouragethecross-sellingofotherinsuranceproductsbybanks.

TheDisasterRiskManagementsectiondetailsthevitalplansforanLGUcatastropheinsurancepool,financedbytheLGUsandinitiallyalsosupportedbyanMDBcontingentloan.TheDisasterRiskManagement assessment rightly points out, inter alia, that to ensure that both re-insurers and the LGUsareattractedtothispool,itisbestmanagedbyareputableprivatesectorinsurancegroup.

Ensuringthattherearefundsavailabletopayforthismanagement,duringtheinterimperioduntilthepoolisself-sustaining,issomethingthatcouldfitunderthefinancialsectorinitiative,asthisislikelytobeperformedbyaninsurancegroup.Pendingpreparationofmoredetailedprojections,weassumethatthistaskrequiresamanagementteamofoneseniorinternationalspecialistandsixlocalnotaries/accountants,costingaroundPhp40millionperyear.Furthermore,weassumethatthegovernment/MDBwouldhavetopay100percentoftheannualcostduringthefirstyearand50percentinthesecondyear,foratotalrequirementestimatedatPhp60million.

Policy and Regulatory Issues

Thereareconcernsfromamedium-termperspectiverelatedto(i)theamendmenttotheAgri-AgraLaw110,whichrequires25percentofbanklendingportfoliostobedestinedfortheagriculturalsector(giventheseverelossesinthissector);andto(ii)there-approvedSMEMagnaCarta,whichstipulatesthat10percentofbanks’lendingportfoliosshouldgotoMSMEs.Offeringfewalternativecompliancemeasures,theselawsarelikelytoforcebankstolendmoretothosesectors,eveniftheydonothavethecapacitytodosoprudentlyorcost-effectively.ThisislikelytocreatehigherNPLsthanwouldotherwisebethecase,withtheconsequenceofreducingbanks’capitaladequacyand,equallyimportantly,perpetuatingthemyththatlendingtothesesectorsisinherentlyriskyandunprofitable.Asmentionedabove,thebankingsectorisalsonegativelyimpactedbythefactthatBSPExaminersdonothaveimmunityfromprosecutionfordecisionstakeninthelineofduty.

WewouldrecommendthattheinternationalcommunityenterdiscussionswiththeGoPtofurtherexaminethepotentiallynegativeimpactoftheselawsandregulations,andseektomakeimprovements.Asitstands,however,wehavenotbudgetedanyspecificnewexpensesforsuchanalysisandpolicywork.

Other Options to be Assessed Further

109 TheDisasterRiskManagementsectorhasalreadyidentifiedabudgetforthestudiesrequiredtoassessthefeasibilityofthismeasure,anddevelopeddraftTORs.Thisstudywillalsocovertheprecisecatastrophiceventsthatshouldbecovered.

110 Thelawdefinesagriculturalcreditasproductionorothertypesofloansforacquisitionofworkanimals,farmequipmentandmachinery,seeds,fertilizers,poultry,livestock,feedsandothersimilaritems;acquisitionoflandauthorizedundertheAgrarianReformCodeofthePhilippinesanditsamendments;constructionand/oracquisitionoffacilitiesforproduction,processing,storageandmarketing;and,effectivemerchandisingofagriculturalcommoditiesstoredand/orprocessedbythepreviouslycitedfacilities.Source:DepartmentofAgriculture,AgriculturalCreditPolicyCouncil,“TheAgri-AgraLaw:AReviewofitsPerformance,”18September2003.


Thefollowinginterventionshaveemergedtoolatetobeincludedinthebudget,butwouldrequireminimalinvestmenttobeinvestigatedfurther,potentiallyenablingimportantprogresstobemade:

• ThissectionsofaronlyfocusesonhowtofacilitatehousingfinanceforLGUs.Whilsttheprivatebankswillalreadybewillingtofinancevaluablehousesthathaveonlybepartlydamagedbythefloods,manyownersof(mostlymicro/small)housesthathavebeenlargelyorentirelydestroyedalsorequirefinancing,andareunlikelytohaveaccess.Astudyofhowmicro-housingloanscouldbesupportedcouldbeofgreatbenefittothissectionofthepopulation.

• Themicrofinancecommunityhasrequestedthattheinternationalcommunityexplorethepossibilityofsupportingtheestablishmentofanemergencyliquidityfacility,suchastheonethatwascreatedbytheIDBandotherpartnersforLatinAmericabackin1993.

• Althoughitappearsthattheinsuranceneedsaresovastthatitwillrequiregovernmentinvolvementatsomelevel,thesuccessfullyburgeoningmicro-insurancesectorinthePhilippinescouldalsobeanimportantpartofthesolutiontounder-insuranceinthecountry.AstudyofhowexternalassistancecouldallowinterestingpilotsbyCARDMBA,MalayanInsuranceandotherstobereplicatedonafarbroaderscalewouldbesensible.

Table 58: Needs in the Financial Sector (Php Million)

Recovery Reconstruction TotalPublic Private Public Private

Managing RMF 1.1 - 24.0 - 25.0

Managing MF grants 2.4 - 54.2 - 56.6

Managing Catastrophe Insurance Pool

- - 60.0 - 60.0

Total 3.4 - 138.2 - 141.6

FinancialSectorneedsreflectedinenterpriseandhousingsectorreports:

Enterprise RMF loans (236.3)* 630.0 (5,388.8)* 14,370.0 15,000.0

Funding MF grants 23.4 - 534.1 - 557.5

GurantedforLGUhousingfinance - - (1,575.0)* 10,600.0 10,600.0

RMF=RiskMitigatingFacility *publicsectorguaranteecomponentofoverallprivatesectorfinancing


Recovery Framework: Financial Sector



Distribute grants to over11,000micro-orsmallborrowerswhohavelostallproductive capacity

According to o 2004NSOfigures,therewere431Kmicro-and44Ksmall enterprises in affectedregionsBasedonPulseo data,11%ofmicro-and5%ofsmallenterprises say they have no hope ofrepayingtheirloansThiswouldmeano that10,800micro-and350smallborrowersmaywellneed these grants regainproductivity.

Procurementoforganizationo (eitherMFIorNGO)todeterminewhichenterprisesqualifyashavinglostallsignificantproductiveassets–over37,000MSEsassessedinunderayear(MDBRepstodospotchecks);Approve the grants, and o disburse them through automatic payments to grantee’sbankaccountinparticipatingbanks;over11,000grantsdisbursedinunder12months,withlessthan5%ofsamplecaseschallengedbyMDBappraisers;Financingrequired:o

(Forgrants:Php- 557.5millionalreadyaccountedforintheEntreprisesector)Formanagement:Php- 56.6million

- TOTAL accounted for in this section: Php 56.6 million.

None,projectshouldbeo completein2010(althoughthereisachanceofprojectcreepingintoQ12011)

Byactingascatalystand risk-sharer, ensure 15bn PHP is disbursed by private banks to 30,000MSMEsinaffectedareas,75%ofwhomshouldbebackontrackwiththeir pre-typhoon loanpaymentsafter2 years, and over 50%surpassingpre-typhoon revenue levels.

CurrentWorldBanko estimate is that the financingneedsofprivate enterprises impacted by the typhoons amount to66.9bnPHPAssuming that the o needsofMSMEsrepresent30%ofthis volume, and thatonly75%ofthatdemandactually seeks loans, total volume to belenttoaffectedMSMEswouldbe15bn PHPWe believe that by providinga50%firstlossto75%ofthe15bnPHPportfolio(i.e.5,625mnPHP),the government could get local partner banks to fundtheentire15bn PHP, and take 25%oftherisk.AnIFC-typeIFI,wouldtake the remaining half,i.e.thesecondlosspart,ofthe75%portfolioguarantee.

Firststepwouldbeafarmoreo detailedassessmentofthefinancingneedsofMSMEsinaffectedareas,intermsofvolume and type, together withtheselectionofthepartnerbankswhowouldgetsuchRMFs;Reachframeworkagreemento withco-guarantor,i.e.international private bank or private sector oriented developmentorg.(IFC/DEG/FMO);Design RMF and sign up o partnerbanks;Procuremanagementfirmforo theRMF;Managementfirmtrainso partnerbankstafftoanalyzeand process the right loans correctly;LendingtoaffectedMSMEso startsinsecondhalfof2010;Financingrequired:o

Forstudy:Php5million- Formanagement:Php- 20million(Govt.shareofRMF:Php- 5,625million–reflectedintheenterprisesector)

TOTAL accounted for in this section Php 25 million

On-goinglendingtoaffectedo MSMEs,untiltwoyearsafterthestartoflending;Forthefollowing5years,o corenotarystaffensurethatonly eligible loans are being claimedandreimbursed;




Enabling over 10bnPHPinLGUfinancingoflow-income housing, by under-writingLGU’scredit

35,000familieso have been displaced(ofwhich50%willbewillingand able to make rent payments fornewhousingcostingPhp600K/unit;

Thoroughstudyofhousingo needsofthedisplacedthatalsoassessespreferencesandcapabilitiesofLGUs(incl.availabilityofland),and broad guidelines on possiblefinancingfromtheprivatesectorwithsuchunderwritingReachAgreementswiththeo participating LGUs on the risk sharing approach, pricing, etc.Identifyabankortwowillingo toinvestinLGUlow-incomehousing,andhelpfinalizeagreementsbetweenthemandtheLGUs;Follow-upwithpartnerLGUso toensurethatthefinancedhousing and rental methods, accordtotheAgreements;Financingrequired:o

Forstudy:seehousing- sectionGovt.under-writing:- Php 1,575 million both already costed in the housingsector)

- TOTAL accounted for in this section: Php 0

Continuefollow-upwitho partner LGUs to ensure that thehousingbeingfinanced,andwayitisrentedout,isaccordingtotheAgreements;Thisfacilitymaytakeuptoteno yearstofreeuptheneededland and build the necessary housing–bytheendoftheproject,thepartneringLGUsshould have built at least 17,500newlow-incomehousing units, and disbursed over10bnPHPforthispurpose.

TOTAL accounted for in this section: Php 0

Enabling the establishmentofanLGU Catastrophe InsurancePoolwithprivate re-insurance thanks to Pool being managed by a reputable private entity

As demonstrated o by the Disaster Risk Management Group, there is a desperate lack ofcatastropheinsurance in the Philippines;

Thedesignandset-upofo theCat.InsurancePoolisdescribed in the Disaster Risk Managementsection;Procure and hire a reputable o private entity to manage theCat.InsurancePoolthatmanages to attract private sectorre-insurance;Financingrequired:o

Formanagement:Php- 60million

TOTAL: Php 60 million

TheCat.InsurancePoolo management continues indefinitely,butonlyrequiresPhp20millionofgovernment/MDBfundinginyeartwo,andnonethereafter,asthePoolbecomesself-financing;

GRAND TOTAL REQUIRED:

Php 7,899 million (including costs covered in the housing and enterprise sector)

Php 141.6 million to cover costs to the final sector accounted for in this section.


Annex A. Description of the Risk Mitigation Facility

Asdescribedinthemaintext,theexampleweareusingisofariskmitigationfacilitywherethegovernment/MDBcovers37.5percentofthetotalriskoftheentireportfoliowhich,combinedwiththelocalpartnerbank’s25percentofthefirstlossrisk,equalstoanover-allfirstlosscoverageof 50percentoftheentireportfolio.(Figure10)

Figure 10: Example of a Risk Mitigation Facility

Thismeansthatanyloanthatisinarrearsbeyondtheagreedlengthofthetimewouldhave75percentofthevalueoftheinterestandprincipalstilloutstandingpaid,bytheRMF,tothepartnerbankthatholdsthatloans.AnyloanthatiswithinthefirstPhp7.5billionoflosses,wouldbereimbursedusingthegovernment/MDBcontributiontotheguarantee.

Ifthefirstlossisexhausted,i.e.iflossestothisportfolioamounttomorethanPhp7.5billion,thenthesecondlossgetsused,i.e.thefundscommittedbytheinternationalprivatebankortheprivate-sectororienteddevelopmentorganizationgetusedtoreimburse75percentoftheoutstandinginterestandprincipaltothepartnerbank.

• ThroughouttheexistenceofthisRMF,thepartnerbank(usingthesehypotheticalfigures)financesalltheloansupfront,andbears25percentoftheriskinboththefirstlossandthesecondloss.

• Allloansofthistypeareautomaticallycoveredbytheguarantee,thebankdoesnothavetheoptionofexcludingsomeloanstoflood-affectedMSMEs,hopingtoreducecostsiftheyareparticularlylowrisk.

• Claimsshouldbemadeatlimitedintervals,e.g.quarterly,andRMFstaffwillverifythattheloansbeingclaimedfortrulyareeligibleforthiscover.

SecondLossof7.5bn

PHP(50percent)

FirstLossof7.5bn

PHP(50percent)

Local

Bank’s

risk

cover

3,750m

PHP

(25%)

PrivateIntl.BankorIFC/DEGtype

riskcoverage:5,625mPHP

(37.5%oftotalportfolio)

Govt./MDBriskcoverage:5,625mnPHP(37.5%oftotalportfolio,butalso50%offirst

loss)


Disaster Risk Reduction and Management (DRRM)111

Introduction

The geographical location of the Philippines in the tropics and in the so-called “ring of fire” makes it one of the most disaster-prone countries in the world.Itranksinthetop10countriesworldwidewithrespecttoincidenceandhumanimpactsofdisasters112,anditisrankedamongthetop20countrieslikelytobemostaffectedbyclimatechange.113Upto60percent114ofthetotallandareaofthecountryisexposedtoarangeofhydro-meteorologicalandgeo-physicalhazards,and23provincesfacesignificantrisktofourormorehazards115.Settlementpatternsmake74percentofthepopulationvulnerabletodisasters116,withmanyareassubjecttoshocksfromrepeatedsevereweatherevents.Overthelastcoupleofdecades,onaverage,around1,000peopledieasaresultofnaturaldisasterseachyear,andtheadverseeffectsofnaturaldisastersalsohavesignificantimplicationsforthecountry’seconomicdevelopment.Overtheperiod1990to2008,thePhilippinesincurredanestimatedannualaverageofPhp28billionindirectdamageswhichisequalto0.7percentofGDPperannum(Table59).Thisisontopofthelossesinhumanlivesandtothesocialandenvironmentalassetsofcommunities.117Thefullextentoftheimpactisgreateraslosses(particularlyprivatesectorlosses)havenotbeenfullyaccountedforinthepast.

Table 59: Ranking of Disaster Related Fatalities in the Philippines, 1990-2007

Hazard Event Number Killed Damage (US$ millions) Typhoon 36,936 5,989.5Earthquake 9,580 519.5Flood 3,003 1,230.3Volcano 2,996 232.0

Source:CenterforResearchontheEpidemiologyofDisasters,2009

Institutional Framework for Disaster Risk Reduction and Management

The legal and institutional framework for DRRM is currently oriented toward emergency response.Overthepast20years,therehavebeennumerouseffortstoupdatethenow-outdatedDRMlegalbases(PresidentialDecreeNos.1of1972and1566of1978),withaviewtoshiftingtheemphasisfromareactivetoaproactivemodethatfocusesondisasterprevention,preparedness,andmitigationactivitiesrequiredtoreducerisk.Althoughseveralefforts(DBMandDILG118 Joint MemorandumCircular(JMC)No.2003-1)havebeenmadetoallowtheuseoflocalcalamityfundsfordisasterpreparednessandmitigationactivities,thesehavenotyetledtosignificantchangeatthelocallevel.Intheabsenceoflegalreforms,itwillbedifficulttoencouragemorewidespreadaction.Therefore,priorityshouldbeplacedonfinalizingandpassingthelong-awaitedDRR/MLawandaligningitwithotherrelevantpolicyandlegislativereforms(e.g.,theproposedNationalLandUseLaw).

111 Bothconcepts(DisasterRiskReductionandDisasterRiskManagement)encompasspreventionaswellasmitigationandpreparedness.Inthisdocumenttheyareusedinterchangeably.

112 CenterforResearchontheEpidemiologyofDisasters,2009113 Dasgupta,Susmita,et.al.2009.“ClimateChangeandtheFutureImpactsofStormSurgeDisastersinDeveloping

Countries,”CenterforGlobalDevelopment.114 PhilippineCountryRiskProfile,GFDRR.115 Thisistheresultofthevulnerabilityscreeningconductedunderthetechnicalassistance“SupportingLocalGovernment

CapacitiestoManageImpactsofNaturalDisastersinthePhilippines”supportedbyGFDRR.TheprovinceswereidentifiedusinghistoricaldatagatheredfromdifferentgovernmentagenciessuchasPHIVOLCS,MGB,DA,andDPWH,amongothers.

116 Opcit.117 NDCC,2009.118 DepartmentofBudgetandManagementandDepartmentoftheInteriorandLocalGovernment,respectively.


Impetus for enacting a DRRM bill and other legislation has gained momentum, with increasing recognition of the country’s increased exposure to climate change risk and heightened awareness created by the Ondoy and Pepeng disasters.InOctober2009,thePhilippineClimateChangeLaw(RepublicAct9729)waspassed,andeffortstoformalizetheStrategicNationalActionPlan(SNAP)areunderway.TheSNAPistheGovernment-ledmulti-stakeholderresponsetotheHyogoFrameworkforAction(HFA).119Itidentifiesseveralpriorityactions,rangingfromestablishingsoundpoliciestoconcreteDRRMprogramsandprojectsthatareaimedatbuildingthecountry’sresiliencetonaturaldisasters.TheSNAPhasstronglocalandnationalgovernmentsupportthroughaconsultativeprocesswithvariousinterestgroups.However,boththeSNAPandtheproposedlawcouldbenefitfrombetterintegrationoftheclimatechangeadaptation(CCA)anddisasterpreparednessagenda.

In the aftermath of Ondoy and Pepeng, the Government formed a Special National Public Reconstruction Commission (SNPRC) to work with a Philippine Disaster Recovery Foundation (PDRF) established by the private sector (Executive Order (EO) No. 838).ThefunctionoftheCommissionistoliaisewithappropriatepartnerstoplan,generatefunds,andimplementandmonitortheidentifiedneedsforrehabilitationandreconstructioninrelationtodamagesincurredfromOndoy,Pepeng,andFrank.TheSNPRCissupportedbyasecretariatcomprisedoftheNationalEconomicDevelopmentAuthority(NEDA)andNDCC.TheGovernmentiscurrentlypreparinganAdministrativeOrderwhichwillfurtherdefinetheinstitutionalrolesandresponsibilitiesofthevariousmembers.

The mandate for overall policy and coordination for disaster risk management (DRM) lies with the NDCC (Section 2 of PD 1566).TheSecretaryofNationalDefenseheadstheNDCC,whichcomprisesheadsof18departments/agenciesasmembers.ItisthroughtheseNDCCmember-agenciesthatthedisasterpreparedness,prevention,mitigationandresponsefunctionsarecarriedout.NDCCactsasadvisertothePresidentondisasterpreparednessprograms,disasteroperations,andrehabilitationeffortsundertakenbytheGovernmentandtheprivatesector;coordinatesalldisastermanagementefforts;andisresponsiblefortheallocationofdisaster-relatedresourcesinthecountry.

TheOfficeoftheCivilDefense(OCD)functionsasNDCC’spermanentsecretariat.OCDhasastaffcomplementof267,whichperformsfunctionsrelatedtopolicy,planning,andcoordinationwithstakeholdersanddevelopmentpartnersforbothman-madeandnaturaldisasters,inadditiontoitslegalmandateofcivildefense.Attheregionallevel,OCDiscomposed,onaverage,ofonlyaroundeightstaffperformingthiswiderangeofduties.Onaverage,theOCDhasbeenreceivinganannualbudgetofPhp90millionoverthelastfiveyears.Thisbudgetdoesnotincludecapitaloutlay.

AteachlevelofGovernment-regional,provincial,city,municipal,andbarangay-NDCCoperatesthroughanetworkofDisasterCoordinatingCouncils(DCCs).Intheaftermathofadisaster,NDCCcollectsdataondamagesthroughtheDCCsandcompilesrequirementsforsupportfromtheCalamityFund.Inresponsetoneedsidentifiedatboththenationalandlocallevels,NDCCmobilizesitsmember-agenciestostrategizeacoordinatedresponse;deployscivilandmilitarydefensepersonnelandequipmentneededforimmediaterescueoperationstoassistaffectedlocalgovernments;andprioritizestheallocationofthenationalCalamityFundtoaffectedlocalgovernments.

119 BuildingtheResilienceofNationsandCommunitiestoDisastersaccessedonNovember20,2009,at http://www.unisdr.org/eng/hfa/docs/Hyogo-framework-for-action-english.pdf


Amongthemember-agenciesthatcompriseNDCC,therearefourcoreagencies(DPWH,DSWD,DOH,andDND-OCD/AFP)120thathavetheresponsibilitytoaddressreliefandrehabilitationrequirements.Atleast50percentofthenationalCalamityFundischanneledthroughtheseagenciestoassistidentifiedprioritycommunitiesorsectorinstitutions(e.g.,hospitals,roads).Thegeneralappropriationsprescribethelevelofresourcesforthetypicalscaleofcalamitiesfacedonanannualbasis.OnlythosedisastersthatoccuratnationalscaletriggerthereleaseofthenationalCalamityFund.Whennecessary,acallforadditionalbudgetaryallocationsmaybemadetomeetcostsinexcessofthenationalCalamityFund.

Local governments have the primary responsibility for dealing with disasters. Under the Local GovernmentCode,thelocalgovernmentsserveasthefirst-lineofdefense.Theyareexpectedtopreparecontingencyplans,investinprevention,preparednessandmitigationmeasures,establishaDCC(withparticipationfromcivilsociety),andsetasidefivepercentoftheirtotalincomeasacalamityfund.Theymayalsobudgetadditionalhumanandfinancialresourcesfromtheirannualbudgettodisasterriskreductionactionsandestablishpermanentin-housecapacitytomanagedisasterriskonafulltimebasis.

Needs Assessment for DRRM

The Ondoy and Pepeng disasters highlighted weaknesses in the current DRM framework121 and underscored the need to accelerate mainstreaming of DRRM into policies and programs at the local and national levels as well as in different development sectors. Whilethespecificdisasterpreparedness,mitigationandpreventionactionswillnecessarilydifferacrossaffectedlocalgovernmentsandnationalgovernmentagencies,thesectoralassessmentscontainedinothersectionspointtotheimportanceofaddressingbothstructural and non-structural needs over the short(December2010)tomedium-term(December2012).

The main structuralneedsrelatetosafehousing,floodcontrolsystems,andruralinfrastructure.Anumberofcross-sectoral/intra-regionalprioritieshavebeenidentified,suchascomprehensivewatershedandriverbasinmanagementforMetroManila,LagunaLakeenvirons,AgnoandMagat,andtheCordilleras.Inadditiontothese,anumberofnon-structuralneedsmustbeaddressedinordertoensurethesustainabilityofthereconstructionprogram,aswellasreducethepossibilityofincurringimpactsofthismagnitudeinthefuture.

Thefollowingsectiondescribesthebroadcrosssectoralnon-structural needs that should be addressedintheshorttomediumterm.Theproposedactionsareintendedtolayasoundpolicyandinstitutionalframeworkfor:i)ensuringthesustainabilityofthereconstructionprogramtobeundertakenbytheGovernmentandii)avoidingrepeateddamagesandlossesbyadopting“buildbackbetter”strategiesthatemphasizetheimportanceofprevention,preparednessandmitigation.InordertoaligntheidentifiedmeasureswiththeGovernment’sreformagenda,thenon-structuralneedshavebeenclassifiedaccordingtothekeyactionareaslaidoutintheSNAP.

120 RespectivelytheDepartmentofPublicWorksandHighways,DepartmentofSocialWelfareandDevelopment,DepartmentofHealth,andDepartmentofNationalDefense–OfficeofCivilDefense/ArmedForcesofthePhilippines.

121 Manyofwhichhadalreadybeenidentifiedin“TheNationalAssessmentontheStateofDRMinthePhilippines”(ADBandUNDP,2008).


Establish a sound legal and institutional foundation for DRRM at national and local levels

Enact the DRRM Law to enable a shift in focus toward risk reduction.EffortsareunderwaytoenactaDRRMlaw.TheSenatepasseditsversionoftheDRRMBill(SBNo.3086)inSeptember2009,whiletheHouseofRepresentativeshascompleteditssecondreadingofitsownversionoftheDRRMBill(HBNo.6985),withabicameralconferencetargetedtotakeplaceinDecember.TheDRRMBillhasthepotentialtotransformthepolicyandinstitutionalenvironmenttowardsmorecomprehensiveriskreductionandmanagement.However,furtherrefinementsareneededtoensurethatthebillembodiesthefundamentalDRRMprinciplesof:

• Establishingastrongfoundationforintroducingsoundinstitutions,practices,andprocesses;• Identifyingessentialtasksandassigningresponsibilitiesandaccountabilities;• Identifyingminimumacceptableactionscommensuratetothetypeandlevelofrisk;and• Encouragingactors/agenciestotakeactionsbasedonevaluationofriskstomeetstatedintentions.

Inlinewiththeseprinciples,theBillshould:(a)strengthenthelinksbetweenDRRManddevelopmentplanning;(b)clearlydelineatefunctionsamongagenciesperformingadvisory,oversight,andservicedeliverytasks,notablynationalandlocalgovernments,quasigovernmentbodies/publiccorporations,andthecitizenry;and(c)institutionallylinkDRRMwithclimatechangeadaptation(CCA)inthecoordinationofstrategies,priorities,andresources.

Formalize the SNAP. TheNDCChasproposedanExecutiveOrder(EO)toadopttheSNAPintoaformalgovernmentdocumentthatcanprovidetheofficialguidingframeworkforDRRM.FormalizingtheSNAPwouldsignaltheGovernment’sstrongcommitmenttoimplementa10-year“roadmap”onDRRM,inlinewithglobalgoodpractices,andcreateanenablingenvironmentforreform,includingthestepsoutlinedbelow.TheSNAPwouldalsoestablishabasisformobilizingfurtherfundingsupportfromdevelopmentpartnerstoaccelerateandscaleuptheimplementationofalong-termDRMprogram.

Mainstream DRRM into local governance, planning, and budgeting systems. Ondoy and Pepeng affectedatotalof37provinces.Manyofthelocalgovernmentsaffectedbythesestormsareamongthosethatarehistoricallyathighrisktovariousformsofnaturalhazards.Effortstodevelopthecapacityoflocalgovernments(whichare,bylaw,convention,moralobligation,andproximity,the“firstresponders”)toprevent,prepare,mitigate,andrespondtonaturaldisastersshouldbescaledup,inlinewiththereformeffortsoutlinedintheSNAPandthedraftDRRMbill.

AcrossallLGUs,DRRMshouldbeintegratedwithlocaldevelopmentplanningtomakelocalphysicalanddevelopmentplansrisk-sensitive(asin, e.g., AlbayandMakati).DoingsowillrequirethatDRRMprinciplesandprocessesarefactoredintoexistingeffortstoharmonizeplanningandbudgetingprocesses(DILG,NEDA,DBM,andOCDJMCNo.12007).PriorityshouldbegiventoensuringthatguidelinesformainstreamingDRRMintoexistingplanningandbudgetingshouldemphasizeintegrationwiththeongoingrationalizationandharmonizationprocessbasedontheJMCratherthanintroducingstand-aloneDRRMplansascurrentlyproposedinthedraftDRR/Mbill.Standaloneplans,ascurrentlyproposedthere,mayundermine/weakenmainstreamingefforts.Mostlocalgovernmentswillrequirenotonlytechnicalassistancetoidentifyandaddresstheirspecificrisks,butalsofundingtoimplementcorrespondingmeasuressuchasretrofittingofphysicalassets,relocation,orupgradingofDRRM-activitiesandfacilitiestoeffectivelyreducetheirrisks.ThenecessaryDRRMmeasures(commensuratewithlocalhazards)willneedtobereflectedacrossthefullspectrumofthelocalplanningsystem-landuseplans,developmentplansandprograms,ordinances,andbudgets.


IntheparticularcaseofMetroManila,thesedisastershighlighttheneedtoaddressadverseimpactsthatcutacrossmultiplelocalgovernmentsinamoresystematicmanner.ThisincludestheneedforsynchronizinglanduseplanninganddevelopmentactionsacrosscontiguousLGUsthatliewithinacommonwatershedorriverbasin.

Strengthen Community-Based DRM (CBDRM) to deal with disasters on the ground. Community-basedDRMsystemsarethemostefficientapproachtoreducingdisasterriskatthelocallevel.Localknowledgeaboutvulnerabilities,hazards,andtraditionalcopingcapacitiesisneededtoassesstheactualdisasterriskandidentifyfeasibleinterventions-prevention,mitigation,preparedness,andrecovery.However,thecapacityofcommunitiesmustbestrengthenedtoempowerthemtoactontheirown,asexternalassistancemaynotbeavailableduringanextremeevent.BroadparticipationisimportantforasuccessfulandefficientCBDRMsystem.Otherstakeholders,suchastheregionalorlocalstaffofnationallineagencies,theprivatesector,civilsocietyrepresentatives,andvulnerablegroupsthemselvesmustbeactivelyinvolved.CBDRMismosteffectiveiflinkedtothenationalDRRMsystem-thelawsandstandardsaccordingtowhichlocalactorsshouldact.Inaddition,asnaturalhazardsdonotrecognizecommunityboundaries,closecooperationwithothercommunitiesisimportant,especiallyincaseswherecommonresourcessuchaswatershedorriversystemsareinvolved.

Establish a system for gathering data on damages, losses, and needs and tracking expenditures. ThePDNAprocessrevealedthepresenceofdatagapsandinconsistenciesinthecurrentapproachforreportingdamagesandlosses.Accuratemonitoringandreportingisanessentialinputtoriskreductionefforts.Datafromtheestimationofdamagesandlossesbylocalgovernmentsprovidesvaluableplanninginformation,withwhichtoquantifytheimpactandidentifythenatureofdisasters,designappropriateresponses,identifysourcesoffinancing,andmonitortheuseoffunds.Likewise,expandingthecoverageofdatagatheringeffortstotheprivatesectorandotherpublicsectorentitiessuchasgovernment-ownedand-controlledcorporationsandlocalgovernmententerprisesisalsonecessarytoallowamoreaccurateassessmentoftheneeds,matchfundstoidentifiedneeds(e.g.,calamityfundsandextrabudgetaryresources),andestablishthefiscalandmacroeconomicimpactofnaturaldisasters.

TheNDCChaspreparedacountry-specificdisasterassessmentmethodologyadaptedfromtheEconomicCommissiononLatinAmericaandtheCaribbean(ECLAC)methodology.However,themethodologyneedstobefullytestedandrolledout,andmayalsoneedtobeupdatedtotakeintoaccountrecentlessonsofexperience.Areviewofthecurrentsystemofdatacollectionandcompilationisneededtoensurethataccurateinformationcanbeprovidedtodecisionmakerswhoareresponsibleforplanningandcoordinatingrelief,recovery,andreconstructionprogramsaswelltoidentifypreventionandmitigationmeasures.Akeypriorityistoallowtrackingofexpendituresacrosslevelsofgovernmentandfromvarioussources(private,agencies,local).Thisinformationisessentialfordeterminingresourcestobuildbackbetter.

Promote strict compliance with existing risk reduction policy and legislation. Mechanismsforspeedinguptheimplementationofkeylegislation,e.g.,theSolidWasteManagementActandtheCleanWaterAct,shouldbeputinplacetoenablelocalgovernmentstotakeessentialriskreductionmeasures.Compliancewiththesepoliciesisuneven,e.g.,lessthan10percentcompliancewiththeSolidWasteManagementAct.Asameansofacceleratinglocalaction,theGovernmenthasproposedtoputinplaceamatchingfundtosupporttheimplementationoftheAct.Fundshavebeensetasideunderthe2010budgettoincentivizelocalactionandsupportinter-localcooperation(planning,managing,monitoring,andfinancing)amonglocalgovernmentswithsharedfacilities.


Overthemediumtermamendmentstootherkeypiecesoflegislationwillalsobenecessary(e.g.,theproposedlanduselaw).Inaddition,environmentalregulationandimpactassessmentsshouldbereinforcedtoensureastronglinktocomprehensivehazard-scapemapping,andshouldbestrictlyenforcedtoreduce/preventrisksassociatedwithproposedlocationsofinfrastructureprojects.

Identify, assess, and monitor disaster risks and enhance end-to-end, multi-hazard early warning systems

Assemble lessons learned from Ondoy and Pepeng and their associated flooding and landslide events.Tobeabletotransformadversityintoopportunities,stakeholdersfromboththepublicandprivatesectorsshouldsittogethertodetermineprospectsforlong-termactionstopreventthemagnitudeofhumanandeconomiccostsincurredfromOndoyandPepeng.Theassessmentcouldincludedrawingupapictureofthephysicalextentofthefloodsandlandslideswithassociateddamages,aswellastheextenttowhichcontrolmeasures(e.g.,pumpsanddikes)andwarnings,aswellasthecorrespondingmeasurestoremovepeoplefromharm’sway,actuallyworkedonthedaysOndoyandPepengbatteredthePhilippines.Theprivatesectorfoundationestablishedinresponsetothesedisastershasbeganaseriesofconsultationswithprivatesectoractors.SimilarmeasuresareplannedbytheSNPRC.

Fast track the preparation of hazard and/or risk maps in high-risk LGUs. DespitethefacethatmanyoftheaffectedLGUshadcontingencyplansinplace,manywerenotsufficientlypreparedforOndoyand/orPepeng.ThiswasalsoduetoinadequateintegrationofDRRMparametersintolanduseanddevelopmentplansandprograms.Asaresult,manylocalgovernmentsdidnothaveadequatezoningordinances,buildingcodes,andstandardstomitigatetheserisks,

Successfulriskreductionprogramsrequireaccurateandtimelyinformationonthenatureandlocationofhazards,aswellastheabilitytotranslatethisinformationintocomprehensiveriskreductionandcontingencyplans,takingintoaccountthelevelofexposureandvulnerability.NDCCiscurrentlypreparingmulti-hazardmapsforatleast27122provinces(jointlybeingimplementedbyOCD,PHIVOLCS,PAGASA,MGB,andNAMRIA123)throughtheongoingHazardsMappingandAssessmentforEffectiveCommunity-BasedDisasterRiskManagementProject.Tobemoreusefultocommunitiesandlocalgovernments,thesehazardmapscouldbepreparedatascaleof1:10,000(currently1:50,000)toimproveaccuracyatcommunitylevel.Asthiswouldaddtothecostandtechnicalrequirements,intheshorttermeffortsshouldbemadetospeedupimplementationbyboostingthecapacityforpreparationandutilizationofthesemaps.Inthelongterm,anationalspatialdatainfrastructurethatcanbeaccessedandusedbystakeholdersatthelocalandnationallevelscouldbecreatedtocaptureandmaintaintherelevantinformationacrossallscientificagencies.Otherfundamentaldataincludeadministrativemapsandcensusdata.NEDAandNAMRIAarejointlysupportingthisinitiativetoestablishtheriskexposureoflocalgovernments.Externalsupport,especiallyintheformofsatelliteandaerialmappingandphotography,couldhelpfacilitatethepreparationofthesemaps.

122 Theprovincesincludedinthismultihazardmappingprojectare:SurigaodelSur,SurigaodelNorte,Benguet,Cavite,Pampanga,Aurora,Bohol,Leyte,SouthernLeyte,IlocosSur,Abra,Laguna,Quirino,Zambales,Catanduanes,NorthernSamar,EasternSamar,Antique,ZamboangadelSur,IlocosNorte,Isabela,Rizal,NuevaVizcaya,Cagayan.AgusandelSur,Iloilo,ZamboangaSiguguey,andBenguet.

123 RespectivelyOfficeofCivilDefense,PhilippineInstituteofVolcanologyandSeismology,PhilippineAtmospheric,GeophysicalandAstronomicalServicesAdministration,MinesandGeosciencesBureau,andNationalMappingandResourceInformationAuthority.


Asnotedabove,acomprehensiveriskassessmentisrequiredforMetroManila.Previousplansandstudies(e.g.,MetroManilaEarthquakeImpactReductionStudy124),shouldbeupdatedtoincorporatemorerecentinformation(e.g.,theMetroManilaClimateChangeStudy).125Likewise,the1999MetroManilaPhysicalFrameworkPlan-apolicydocumentthatguidestheallocationandutilizationofnaturalandphysicalresources-shouldbeupdatedbuildingontheriskidentificationandassessmentmethodologiesdiscussedabove.TheupdatedframeworkdocumentwouldserveasabasisforcoordinatingeffortswithinthemetropolitanareaaswellasforidentifyinganddelineatingtheresponsibilitiesoflocalgovernmentsandtheMetroManilaDevelopmentAuthority(MMDA),rationalizingresourcesandprioritizingactionsamongtheplayers.

Strengthen the risk modeling and forecasting capacities of scientific/technical agencies. Currently, theprimarybasisforriskidentificationisfromvarioushistoricaldata.Whilethesedataarebothusefulandnecessaryforplanningpurposes,giventhatweather-relateddisastersaccountfor70percentofdamagesrecordedinthePhilippines,andgiventheuncertaintybroughtaboutbyclimatechange,betteruseofscientificinformationformodelingriskandforecastinghazardouseventsisneeded.Onaverage20typhoonsandtropicalstormsarerecordedannually.Investinginadditionalcapacity(e.g.,Dopplerradars)isapriority126.ThroughPAG-ASA,theprocurementofDopplerradarstoimproveitsforecastingcapacitieshasbeeninitiated.Theexpeditiousacquisitionofthisandothernecessaryequipmentrequiredforclimatechangemodelingshouldgoalongwaytowardimprovingtheuseofscientificinformationinplanningriskreductionmeasures.Forecastingcapacitymustbematchedonthegroundwithpreparednessandlocal-levelearlywarningactivities,otherwiseitwillbeapurelyacademicexercise.Truly“end-to-end”forecastingandearlywarningsystemsarenecessarytosavelivesandreducelosses.

Use knowledge, innovation, and education to build a culture of safety and resilience at all levels

Provide DRRM information in a form that is useful for communities and local governments. Within municipalities,theprimaryroleinidentifyingriskreductionmeasuresliesatthecommunitylevel.Itisatthislevelthatearlywarningsystems,evacuationplans,andsearchandrescueeffortsbecomeoperational.Ensuringthatvulnerablecommunitieshavethenecessaryinformationtoplantheireffortsisanessentialchallenge.NumerousbarangayswereaffectedbyOndoyandPepeng.Manyothersrequiresimilarpreparationformanaginganddealingwithdisasterimpacts.DRRMresources(studies,tools,andresources)shouldbemadeavailableinaformthatisusefulatthelocalandcommunitylevel.

Thenatureofinterventionsrequiredbyeachcommunityvaries.Somerequiremoretechnicalexpertisethanothers,soahierarchyofsupportsystemsateachlevelofgovernmentisneeded.Municipalitiesmayseeksupportfromscientificandtechnicalagenciesofthenationalgovernment oracademicinstitutionswithintheirreach.Theymayalsoseeksupportfromprovincesandcitiesthathavein-housetechnicalcapacityanduseGIS-basedhazardandvulnerabilitymapping.TheDRRMbillseekstoestablishaDRRMInstitutethatwillprovidethenecessarycapacitiesacrosssectorsandlocalgovernments.DRRMcurriculacanlikewisebeintroducedintheeducationsystemasawaytobuildacultureofsafetyandresilienceatanearlylevel.TheNDCC,DILG,theLGULeagues,andtheCommissiononHigherEducationcanworkcollectivelytoharnessexistingDRRMexpertiseandknow-howtoserveasfoundationfortheplannedsystematicbuild-upandtransferofknowledgetolocalgovernmentsandothercriticalstakeholders.

124 EarthquakeImpactReductionStudyofMetroManilaand125 Thesestudieshaveledtotheidentificationofthehazards,namelyearthquake,climatechange,andfloodingandtheir

potentialsocialandeconomicimpactsonMetroManila.126 TothisendthePhilippinesisreceivingassistancefromAustraliaandJapan.


Provide basic training on DRM to all agencies responsible for implementing DRM-related services. TheGovernmenthasrightlyidentifiedtheneedtointroduceDRRMconceptsamongtheoversightandsectoralagencies.AstheseagenciesaretaskedtoprovidetechnicalassistancetolowerlevelsofGovernment,itisimportantthatsuchknowledgeisinplace,particularlyamongagenciesthatexerciseoversightfunctionoverlocalgovernments,e.g., DILG, and among those engaged in the provisionofcrucialservicesandinfrastructures,suchasDPWHandDOH,amongothers.Inaddition,thegovernmentshouldseektointegrateDRRMintoschoolcurricula,andoperationsofhealthanddaycarecenters. School-agedchildrenneedtobeorientedonpracticestoallowthemtoprotecttheirliveswhileinschoolpremisesandelsewhere.Buildingacultureofresilienceshouldstartearly,hence,theneedtoincorporatethemintoschoolcurricula.Complementarytothis,day-carecentersandhealthfacilitiesshouldintegrateDRRMintotheirservicestopromotebetterresponseintimesofcalamities.

Reduce underlying disaster risks

Fast track risk finance options to pool and transfer risk. Overtheyears,asystemofnationalandlocaldisasterriskfinancinginstitutionshasbeendevelopedtoprovidepost-disasterfunding.Thekeyelementsoftheexistingriskfinancingsysteminclude:(i)aNationalCalamityFund,(ii)localCalamityFunds,(iii)GovernmentServiceInsuranceSystem(agovernment-ownedinsurerprovidingcatastropheinsurancecoverageforgovernment-ownedassets),(iv)acropinsurancescheme,(v)privatedonationsfromcharities,and(vi)indemnitypaymentsfromprivateinsurancecompanies.Despitethis,thereisashortageofpost-disasterfundingexperiencedbymanysegmentsoftheeconomy,includinghomeowners,LGUs,governmentagenciesinchargeofdisasterreliefandreconstruction,aswellascentrallyandlocallyownedutilities.Inaddition,thereisconcernthatthefiscalimplicationsofdisastersarelikelytoriseinthefuture,whichwillfurtherincreasetheburdenongovernmentovertime.Toaddresstheseshortcomings,ariskfinancestrategyisnecessarytorationalizethedistributionofthefinancialburdenbetweenthepublicandprivatesectorsthrougharangeofoptionstoexpandriskreductionandrisktransfermechanisms.Twoimportantoptionsarecurrentlybeingconsidered:acatastrophepoolthatwouldallowlocalgovernmentstobuildupreservestomanagemediumrisksbyprovidingimmediateliquiditytoitsmemberswhenasignificantdisasteroccurs,thusreducingtheburdenonnationalgovernment;andacontingentfinancingoptionthatwouldprovideimmediateliquiditywhenanationalcalamityisdeclared,aswellasbackingupthecatastrophepoolinitsearlyyears.Otherriskfinanceandtransferschemesthatwouldbenefittheprivatesector,includinghousingandSMEs,arealsobeingexplored,togetherwiththeoptionofestablishingregionalcatastrophefinancingpoolswithothercountriesintheSoutheastAsiaregion.CountriesthathavealreadyestablishedtheirownriskfinanceinstrumentswhichhaveproventobeeffectiveincludemembersoftheCaribbeanCatastropheRiskInsuranceFacilityandtheTurkishCatastropheInsurancePool.

Provide affordable financing to LGUs for priority risk reduction investments. Investments related toDRMareconsideredpublicgoods.Assuch,thereisaneedtoencourageLGUstoimprovepreparednessandinvestinprioritymitigationandpreventionmeasuresbyprovidingaccesstoadditionalandaffordablefinancing.Forlow-incomeLGUs,matchinggrantsorotherincentiveprogramscanbedesignedtoencourageandassistwithmajorDRRMinvestments.Existingfacilities,suchastheDisasterManagementAssistanceFund(DMAF)establishedbytheMDFO,whichcurrentlyofferslimitedfundingonconcessionalterms,couldbefurtherexpandedbytappingadditionalresourcesfromtheMunicipalDevelopmentFund(MDF)orthroughinjectionsofadditionalgovernmentorinternationalfinancing.FundingwindowssetupbyGFIscouldalsobecomplementedbymatchingfundsfromthenationalgovernmenttoacceleratetheuptakeofloansforDRRM-relatedinvestments.TechnicalassistancetodetermineanddesigntheseinvestmentsandtobuildimplementationcapacitywillalsobeneededtoensurethetimelyprovisionofDRRMservicesandinfrastructureinvestments.


Introduce risk–sensitive technologies.OndoyandPepenghaveexposedtheweaknessinthedesign,constructionandengineeringstandardsemployedbylocalgovernments.Thereisanurgentneedtorevisitcurrentstandardsandmethodologiestomakethemresponsivetothevariousrisksfacedontheground,andtoensurethatlocalgovernmentsincorporatethisguidanceinlocalordinances.Moreover,thereisaneedtoensurethatcriticalinfrastructure,suchasschools,healthcenters,localgovernmenthalls,andotherlifelineservicesareprotectedfromhazardsandcontinuetofunctionamidstdisasters.Inthelong-runschoolsshouldceasetobeevacuationcentersandcommunity/socialwelfarecenters,andeventhebarangayhalls,beusedinstead.Financingforfull-fledgedevacuationcentersisnotlikelytobeavailabletomostLGUS.

Strengthen disaster preparedness for effective response at all levels

Prepare for a wide range of hazard scenarios. Itisessentialtostrengthenlocalcontingencyplanningthroughamorecomprehensivepolicythatensuresthatsearchandrescuecapability,evacuationprocedures,andreliefservicestakeintoaccounttheworst-casescenario.Suchplansshouldbebroad-based and include local government, civil society, the business sector, volunteer groups, and otherhumanitarianorganizations.Inaddition,basicemergencyfacilities,training,andregulartestingofemergencyresponsesystemsshouldberequiredinhigh-riskLGUs.Fail-safebackupplansarealsoneededtoavoidrepetitionoftheOndoy/Pepengsituationwheredamagedinfrastructure(e.g.,communications)vitaltotheresponseandrescueeffortswasrenderedinoperable.

Integrate early warning systems, reporting, and monitoring across all levels of Government. Informationgeneratedatthenationallevelbythescientific/technicalagenciesontheprojectedscale/magnitudeofimpendingdisastershouldbeprocessedandtransmittedinatimelymannertolocalgovernmentswhichrelyonsuchinformationtoguideactionsandtoallowfeedbackfromtheground.Accesstoearlywarningsystemsshouldlikewisebeincreasedbyimprovingaffordability,simplifyingtechnologiesandensuringcapacitiestointegratesolutionsacrosslevels.Itiscrucialthatsuchinformationisprocessedtoguideappropriateactions,especiallyatthecommunitylevel.Inaddition,thedifferentcommunicationplatformsshouldbeintegratedbetweenpublicandtheprivatesectorstoincreasefunctionalityandreliability.Forexample,callcenterscouldbeallowedtoreceivecallsrelatedtodisastersanddirectthemtoappropriatechannels.

Widen membership of disaster coordinating councils. Asthescaleofdisasterscanoverwhelmlocalgovernmentswithlimitedresources,expandingthemembershipofthedisastercouncilsisastrategicwaytoaugmentexistingcapacityandresources.Forexample,institutionallinkagestoradio,television,andprintmediaatthenationalandregionallevelshouldbestrengthenedtoimprovetheflowofinformationandearlywarnings.TheutilityofmassmediainemergencycommunicationwasillustratedduringOndoyandPepeng.Allformsofmedia(radio,television,cellphone,web)becamefocalpointsforchannelingappealsforrescue.Giventheextentofthemedia’sreach,givingthemaroleaspermanentmembersofdisastercoordinatingcouncilsshouldbeencouraged.

Localgovernmentsoftenco-optorcoordinatewithothervolunteergroupsandotherprivatesectorgroupsduringdisasters.Jointplansorsupportsystemsshouldbeestablishedbetweenneighboringorclustered(metropolitan)LGUs,suchasregionalbranchesoftheLGULeagues,suchthatwhenonememberoftheleagueisunabletocopewithadisaster,otherablememberscanextendassistancetoreplaceoraugmentlocalresources.

Estimates of needs for the short and medium-term horizons.Therequirementsfortheshort-andmedium-termareestimatedatPHP955andPhp835million,respectively,andaremostlynon-structuralinterventionsthataimtobuildtheknowledgeandcapacitiesamongcrucialsectorsandlocalgovernments.Theyfocusmainlyontherangeofactivitiesthatincludesex-antepreparation


andmitigationthatareenvisagedtoreduce,notjusttheeconomicdamagesandlosses,butalsomortalityfromnaturaldisasters.Manyoftheseinterventionshavealreadybeenplannedand/orinitiatedbythemembersoftheNDCC,withsupportfrommanydevelopmentpartners.However,thereisaneedforneedimmediateactionandeffectiveimplementationoftheseeffortstoachievethedesiredoutcomesofreducingthevulnerabilityofthelocalgovernmentsandtheircommunitiestoincreasingscalesofnaturaldisasters.

Recovery Framework: Disaster Risk Reduction and Management



A clear legal and institutional frameworkfordisaster risk reduction(DRRM)is established to acceleratereformsand actions at all levels

CurrentlawdoesnotprovideforDRRMinlinewiththeSNAP.SNAPhasnotyetbeenformalizedor submitted as GRP commitmenttoHFA.Guidelines on MainstreamingDRRMexist,but need to be disseminated and adaptedCivil society organizations and local governments are actively engaged in promotingCBDRM,albeitinselectedareas.

EnacttheDRMLawto•enableashiftinfocustowardsDRRMIssueanExecutiveOrder•formalizingtheStrategicNational Action PlanDesign and roll out the •Philippine disaster damage and loss assessment methodology(Php20million)Capacity development •forrisk-sensitiveplanningamonghighriskLGUs(Php25million)Harmonize, disseminate •and adapt guidelines across levels(PHP5million)CBDRMinhighrisk•communities(Php50.0million)

Expansionofthe•useofthePhilippinedisaster damage and loss methodology to gather data in all sectors and across levels(PHP20million)Expansionofcapacity•buildingforrisk-sensitive planning among high risk LGUs (Php75million)ExpansionofCBDRM•interventions(Php150million)

Disaster risks at alllevelsoflocalgovernments are identifiedandassessed to provide foundationforappropriate DRRM policy, plans, and programs

Many LGUs in the country facemultiplehazards,but do not have access totechnicalinformationon hazards and risks to guide planning and decision-making.Shortageofmanpowerisseenasaproblemoftechnicalagenciesdoingthemapping.

Fast-trackpreparationofrisk•mapsforLGUCLUPs(Php27million)Dopplerradars(Php600•million)CCRiskmodelsforextreme•weatherevents(Php10million)Endtoendearlywarning•systems in high risk communities(Php50million)

Expandhazard•mappingforLGUCLUPs(Php50million)Developtoolsfor•integratingscientificinformationacrossNGagencies(Php100million)Earlywarning•systems in high risk communities(Php150million)




DRRMknowledgeis systematically disseminated across sectorsandlevelsofgovernment

ExtensiveDRRMknowledgehas been produced at both global and national levels, but this has yet to be translated into more practicalinformationforuse by local governments andtheircommunities.Currently, there is no systemfortransferringknowledgeandskillstolocalgovernmentsandfortesting or monitoring the effectivenessoftheseDRRMcapacity development programs

Develop appropriate DRRM •toolsforlocalizedplanninganddecision-making(Php5million)Revisit land use, guidelines •relatedtosettlement/zoningandconstruction/engineering(Php5million)Integrate DRRM in education •andhealth(costedinothersectors)TrainingforLGUfrontliners•inhighriskLGUs(Php20million)

Underlying risks are reduced through improved access to fundsthatsupportex-anteandex-postDRRM initiatives

ThegovernmentfinancesthebulkofDRRMneeds.Limitedfinancialresourcesconstrain investments in preparedness, prevention andmitigation.Inaddition,thecostsofrecoveringfromorreconstructingafterlargedisaster events may go unfundedbecauseoffiscalconstraints.

Establish a CAT pool to •mobilizeLGUfinancingformediumtolargeevents(Php15million)Introduce contingency •funds,reinsurance,bondsandotherrisktransfermechanisms(Php10million)Develop incentives or •matching grants to support LGU mitigation and preparednessactivities(Php5million)StrategyforusingDRRM•forpovertyreduction(Php3million)

Retrofitand/or•upgrade priority sectors and critical lifelineinfrastructure(costedinothersectors)Increase the role •ofprivatesectorininsurance provision (Php15million)Establish a system •forpaymentforenvironmental services(Php5million)Implement DRRM in •poverty reduction

Capacitiesforeffectiveresponseat national and local levels are strengthened, through collaboration among LGUs and the private sector

Local governments are mandatedbylawtoactasthefirstresponders.However,manyofthemare unable to meet the requirements – personnel, systems, and equipment to effectivelydealwithcrisisontheground.

Develop capacities among •communities to ensure adequate emergency response(Php10million)Revise/upgradecontingency•planning guidelines to ensure that LGUS have capacitytodealwithworstcasescenarios(PHP5million)Evacuation centers in critical •areas(Php90million)

Evacuation centers •incriticalareas(PhpP270million)

Totalfinancingneeds Php 955 million Php 835million


PHOTO CREDITS

Coverphoto:JohnPauldelRosarioInsidefrontcover:NonieReyes

DESIGN & LAYOUT

Graphic Arm
