Abstract
Disaster risk financing is usually sourced from public funds for recovery and rehabilitation. National government allocates large amounts of public funds for recovery, rather than on public investments for development. Risk transfer mechanisms (RTMs), such as local insurance, ease the financial burden on local governments by providing additional funds for early recovery. While many laws require insurance of local public assets against disasters, these are still not insured, or are under-insured. This chapter assesses current issues on RTMs by looking at the experience of Quezon City to identify policy gaps that need to be addressed in charting an enabling policy. It argues that institutional convergence, RTM risk layering, and risk transfer options planning be part of the investment planning process of local disaster funds. These can be undertaken by crafting a clear policy strategy—ensuring that insurance funds are locally available for timely disaster recovery.
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Notes
- 1.
RA 9729 was enacted on 23 October 2009 while RA 10121 was signed into law in 27 May 2010. “RA” stands for “Republic Act”.
- 2.
Definitions from this World Bank document may be found in its Glossary.
- 3.
See Section 3(kk) of RA 10121.
- 4.
See Section 2 of RA 9729, as amended.
- 5.
Section 21 of RA 10121 provides that at least 5% of local revenues be earmarked as LDRRMF.
- 6.
The Quezon City Local Disaster Risk Reduction and Management Office (LDRRMO) started to fully operate in 2016. Data on risk transfer became available starting on the said year only.
- 7.
Data on local property insurance were obtained from the Government Service Insurance System (GSIS).
- 8.
Presumably, the purpose for these 2018 budget items are the same as the previous years, i.e. to provide insurance for volunteers.
- 9.
Data on risk transfer expenditure trend were also obtained from the Quezon City Project Procurement Plan of the Local DRRM Fund, from 2016 to 2018.
- 10.
The barangay or village is the most basic and smallest political and governance structure in the Philippines.
- 11.
See Section 5 of RA 656.
- 12.
Section 3.3 of COA Circular No. 2012-002 allows payment of insurance premiums on property and Accredited Community Disaster Volunteers.
- 13.
Section 6.3 of MC 2015-77 at best mentions that “other sources of funding should be explored”, and not just the LDRRMF and PSF.
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de la Torre, D.G., Alampay, E.A. (2023). Risk Transfer Mechanism: Charting a Strategy on Local Insurance. In: Tadem, T.S.E., Atienza, M.E.L. (eds) A Better Metro Manila?. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-19-7804-3_15
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