GAR 2013: “From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction”

Senator Loren Legarda

Privilege Speech

6 June 2013

Mr. President,

The United Nations International Strategy for Disaster Reduction (UNISDR) has released the 2013 Global Assessment Report on Disaster Risk Reduction, “From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction”.

Allow me to share some of the findings relevant to the Philippines.

The Philippines is ranked first in terms of economic losses due to disasters as it is estimated to lose more than 10% of its gross fixed capital formation (GFCF), which is the combined annual capital investment of both the public and private sectors, to earthquakes; while more than 1% of GFCF will be lost due to typhoons.

In fact, the Philippines can suffer losses worth more than US$9 billion due to a strong earthquake.

Losses to disasters could even exceed the country’s revenue. The Philippines has been experiencing budget deficits due to disasters, from more than Php100 billion in 2000 to Php300 billion in 2009, resulting to increased foreign borrowings.

The report reveals that middle-income countries like the Philippines have high levels of risk because of weaker infrastructure, which affects a nation’s annual average loss to disasters—a factor which is important for investors.

Amid all the risks and potential losses from disasters, the report emphasizes that the Philippines has shown improvements in its disaster risk reduction and management efforts, particularly through increased budget allocations for DRR. The allocation for DRR investments in the national budget has increased from 1.4% in 2009 to 2.1% in 2011.

The heightened engagement of the business sector in disaster risk reduction and climate change adaptation efforts is crucial in preventing substantial business losses and economic development setbacks resulting from disasters of unprecedented scale.

As disaster risk reduction is everybody’s business, a more visible action from the business community must be urged. Aside from coming up with their business continuity plans that will show how prepared they are to face disasters and be back in business as soon as possible, the private sector is encouraged to work with the government in constructing homes, schools, hospitals, and buildings that are safe and secure amidst natural hazards, and in designing and constructing roads, bridges and other infrastructure that help spur economic growth with disaster risk reduction in mind.

The business sector is also encouraged to conduct and share risk assessments of their companies, establish effective and efficient early warning systems and disaster plans in their respective corporations, and engage in worthwhile advocacies that will protect our ecosystems, among other actions.

We urge an increased participation from the business sector in building a more productive and resilient economy and in ensuring that in the natural hazards to come, we will have zero or less casualties and damages. After all, the higher value of corporate business is not found in the monetary profit it brings neither in the wealth it creates, but in the nobility of purpose – to improve the quality of life of the people and to build a sustainable and resilient human society.

Thank you, Mr. President.