FAILURE to decisively address persistent flooding and other climate issues could make it significantly harder for the Philippines to move beyond lower middle-income status, a former Bangko Sentral ng Pilipinas (BSP) official said.
Writing for New-York based financial consulting firm GlobalSource Partners, former BSP deputy governor Diwa Guinigundo pointed out that inadequate disaster preparedness was behind the extensive damage caused by severe tropical storm Kristine, which battered most of Luzon last week and left over a hundred people dead.
“Despite the government of President Bongbong Marcos spending about half a trillion pesos for flood control projects in just over two years, and there are about 5,000 of them, nothing seems to have come out of such massive public spending,” he said in an October 26 commentary.
Former BSP deputy governor Diwa Guinigundo
The Department of Agriculture on Sunday said that crop damage from Kristine alone had topped P3.0 billion. The National Disaster Risk Reduction and Management Council, meanwhile, said Monday that 116 deaths had been confirmed and that the storm had also affected 6.7 million people or 1.6 million families.
The difficulty in delivering essential supplies has underscored the vulnerability of both public and private sectors to climate-related disruptions, Guinigundo said, with relief efforts primarily mobilizing only after the storm’s peak.
“Effect on life and property could have been somewhat mitigated if preemptive measures had been taken earlier when the country’s Pagasa (Philippine Atmospheric, Geophysical and Astronomical Services Administration), the weather bureau, warned in its advisory that the tropical cyclone was serious as it turned out to be,” he added.
“For many cities and provinces, it was the worst in a couple of decades.”
While the government has since authorized unprogrammed funds for disaster response and a “conveyor belt of aid,” Guinigundo argued that more anticipatory strategies were needed.
Without effective preemptive policies, he stressed that repeated climate shocks could threaten the durability of critical infrastructure and hinder sustainable growth.
“More anticipatory and strategic moves by the government are needed in order to minimize the hit on both life and property. This is crucial because the Philippines is right on the Pacific Ring of Fire and typhoon belt in the Pacific,” Guinigundo said.
“If this persistent issue of flooding is not addressed and addressed decisively, the Philippines will find it extra difficult to break out of the lower middle-income group.”
The country is classified by the World Bank as lower-middle income, a status it has held since 1987.
Gross national income (GNI) per capita rose to $4,230 in 2023, up from $3,950 in 2022, but is still within the lower-middle income range of $1,146 to $4,515. This was updated from the $1,136 to $4,465 level set last year.
To achieve upper-middle income status, GNI per capita has to hit $4,516 to $14,005, higher than the previous range of $4,466 to $13,845.
The government is targeting a shift by 2025, and last July, the National Economic and Development Authority said that the 2023 GNI level had surpassed the goal set in the 2023-2028 Philippine Development Plan.
“With current data, estimates suggest that the Philippines is poised to achieve UMIC (upper middle-income country) status by 2025, provided the economy sustains a robust growth rate in 2024 and 2025,” it said.
Guinigundo said that while annual allocations for flood control and disaster response were continuing to rise, the Philippines was still among the top countries most vulnerable to natural disasters worldwide due to insufficient coping and adaptive capacities.
“More outlays for flood control will just be dissipated, and money allocated for key infrastructure projects will just be wasted because they are likely to be devastated during similar weather shocks,” he also said.
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