A comprehensive approach to disaster loss and damage accounting is crucial for accurately assessing the true costs of natural and man-induced calamities. This is vital for enhancing the country’s resilience amid increasing exposure and vulnerability to disaster events.
In a recent forum hosted by the Socioeconomic Research Portal for the Philippines, an initiative by the Philippine Institute for Development Studies (PIDS), PIDS Senior Research Fellow Dr. Sonny Domingo emphasized the need for an integrated disaster loss and damage accounting framework. In his research titled, “Study on Climate Change and Disaster Related Loss and Damage Accounting”, Domingo explained that such a framework should capture not only immediate economic damages but also non-economic and long-term socio-economic impacts.
Domingo argued that most current loss and damage accounting methodologies, both international and local, only monitored and reported economic short-term direct impacts. There is a need to appropriately account for the non-monetary, and long-run socioeconomic impacts of disasters. Among those that should be considered are loss of culture and health burdens; disruptions in productivity, productivity flows; ecological integrity costs; and intergenerational and other long-term damages
He stressed that adopting a more holistic approach will provide a clearer picture of the true costs of disasters, enabling more informed policy decisions and effective financial planning for eventual rehabilitation and recovery processes.
The Philippines currently employs the Post-Disaster Needs Assessment (PDNA), Post-Conflict Needs Assessment (PCNA), and Damage and Loss Assessment (DaLA) in assessing losses and damages (L&D) post-disaster events. However, Domingo highlighted the benefits of incorporating risk assessment methodologies, similar to practices in developed countries, to enhance the country’s disaster accounting framework.
Unlike PDNA, PCNA, and DaLA, which are more reactive, risk assessment methodologies provide a proactive approach to disaster management by also considering potential threats and pre-disaster projections before actual loss and damages are incurred.
This need for a more robust disaster accounting framework cannot be overstressed given the Philippines’ consecutive number one ranking as the country most at risk in the World Risk Report for the years 2022 and 2023. The ranking reflects the country’s high exposure to natural hazards, vulnerability, and limited adaptive capacity.
The financial aspect of disaster management is equally critical. The United Nations Environment Programme has reported a significant shortfall in adaptation finance for developing countries, including the Philippines. The estimated annual need for L&D ranges between USD 300-500 billion, with projections nearing USD 600 billion by 2030.
