MANILA–The Philippines has accepted the chairmanship of the Asia-Pacific Economic Cooperation (APEC)’s technical working group (TWG) in charge of crafting financial protection strategies that will strengthen the resilience and quick-response measures of governments to disasters.
Department of Finance (DOF) Assistant Secretary Paola Alvarez said the Philippines took over the chairmanship of APEC’s TWG on Disaster Risk Finance and Insurance (DRFI) after it was offered by Peru, which chaired the group last year.
Vietnam, which will host this year’s APEC meetings, was first offered the chairmanship of the TWG, but it declined on grounds that it was never part of the working group and did not have the expertise on this concern, according to Alvarez.
Alvarez, the DOF spokesperson, said that Peru then turned to the Philippines, which co-chaired the TWG last year and has vast experience on the issue, having pushed the disaster risk finance agenda during its hosting of the APEC meetings in 2015.
“After consultation with (DOF) Secretary (Carlos) Dominguez (III), the Philippines accepted the chairmanship,” Alvarez said.
The TWG-DRFI is an offshoot of the 10-year Cebu Action Plan launched in 2015, when the Philippines was the host of 22nd APEC meetings.
Crafted by the finance ministers of the 21 APEC member-economies, the Cebu Action Plan has the following four pillars: (1) promoting financial integration; (2) advancing fiscal reforms and transparency; (3) enhancing financial resilience; and (4) accelerating infrastructure development and financing.
In the area of financial resilience, the APEC finance ministers agreed that this can be bolstered by developing innovative disaster risk financing and insurance strategies to help the Asia-Pacific region, where 60 percent of the world’s disasters strike, cope with the devastating effects of natural and man-made calamities.
The World Bank, which was tasked to conduct a study and prepare a report on options for regional disaster risk financing mechanisms, proposed the creation of the TWG-DRFI in 2016.
“After the Philippines took over the chairmanship of the DRFI technical working group, Japan, Chile and Peru said they plan to participate in the TWG and that Japan is willing to co-chair it, given its extensive knowledge on this issue,” Alvarez said.
Alvarez said the Geneva-based Sustainable Infrastructure Foundation (SIF), a non-profit group with multilateral funding institutions as its partners, has also approached the Philippines after it accepted the TWG chairmanship and offered its assistance in training and support for the development of the country’s sustainable infrastructure.
The government, she said, can tap SIF’s International Infrastructure Support System (IISS), a public management tool to enable government agencies to improve their project preparation activities, especially now that the Philippines is the new chair of the TWG-DRFI and has unveiled an unprecedented spending program on public infrastructure on the Duterte watch.
The TWG-DRFI held its first meeting in February 2016, with Peru and the Philippines co-chairing it.
As of December 2016, the TWG’s members, besides the Philippines and Peru, are Canada, New Zealand, Japan, United States, Indonesia, Mexico and Chile, along with the World Bank, Asian Development Bank (ADB), Organization for Economic Cooperation and Development (OECD), and the APEC Business Advisory Council (ABAC).
The TWG-DRFI plays a crucial role in crafting measures that would financially protect APEC’s 21 member-economies from disaster risks and enable them to bounce back after calamities.
Over a 10-year period from 2005-2014, disasters have been increasing worldwide especially in the Asia-Pacific, with the costs of physical damage reaching USD520 billion, equivalent to 45 percent of total global economic losses caused by natural disasters.
Most countries devastated by disasters usually turn to passive financial resources such as donations and government borrowings, underscoring the need to develop proactive sources of funding such as disaster risk insurance, and tapping the international capital market by way of credit support in the form of disaster bonds and catastrophe bonds.
Last year, Dominguez, representing the Philippines as chair of the Vulnerable Twenty (V20) Ministerial Dialogue, said a lot more must be done collectively by its members to get the rest of the world to assist in the additional USD100 billion in financing package by 2020 for the global response against climate change.
V20 was formed in 2015, with then Finance Secretary Cesar Purisima as its first chair, by the world’s 20 countries most vulnerable to climate change. This bloc’s membership has since then increased to 43 countries, with the Ethiopian finance minister taking over as chairperson of the V20 meeting in Washington in 2016.