Forecast-based financing in the Philippines

Closing the gap between disaster risk reduction and emergency relief

This project, which began in 2017, seeks to reduce the humanitarian impacts of typhoons and floods in high-risk areas of the Philippines, and to ensure faster recovery in the affected areas - with a particular focus on reducing the loss of life and damage to livelihoods and shelter.

Through the project, the Philippine Red Cross and the German Red Cross have engaged disaster-management and forecasting officials at the national, regional, provincial and municipal levels to develop two early action protocols (EAPs): one for cyclones and one for floods. This process has included consultation workshops, technical studies (e.g., on shelter-strengthening kits), training and simulations, as well as advocating for the forecast-based financing (FbF) approach. The project is currently developing an EAP for drought.

Project description: anticipatory action in practice

Floods and typhoons are major sources of damage and destruction in the Philippines. The EAPs for typhoons and floods cover 28 provinces. They are also complementary: while less severe typhoons may not trigger the EAP for Typhoons, they may cause severe flooding and thus trigger the EAP for Floods.

High winds, storm surges and floods associated with typhoons destroy houses and crops, and disrupt fishing patterns. These disruptions to people’s lives and livelihoods can lead to negative coping strategies, such as migrating to find jobs away from their family, reducing food consumption, taking out loans, or pulling children out of school. The EAP for Typhoons, which was approved in November 2019, covers 25 provinces and aims to mitigate income losses for farmers and fishermen, and to reduce damage to houses, through the following actions.

• Evacuate livestock to safe locations close to human evacuation shelters and provide food and water for animals for three days. Ensuring animal safety protects this important livelihood asset, which can encourage people to be evacuated as well, rather than staying behind to tend to their animals.
• Strengthen houses to ensure people have homes to return to when the storm is over and spend less time and money on repairs.
• Early harvesting of mature food crops and abaca trees. The latter is an important crop, providing fibres which are sold to make a variety of commercial goods, and the production of which is the main livelihood in Catanduanes island.

The EAP for Typhoons is triggered when a typhoon is forecast to destroy at least 10 per cent of houses in at least three municipalities, and has a maximum lead time of three days. To calculate the predicted impact, a statistical model combines wind speed forecasts with data on damages caused by past storms and housing types. The trigger was developed with the support from 510 – an Initiative of the Netherlands Red Cross, and is currently f being handed over to the Operational Center from the Philippine Red Cross. The Office of Civil Defense in the Philippines has shown an interest in being briefed and trained on how the model for forecasting and triggering typhoons works.

Floods in the Philippines destroy crops and damage aquaculture operations. In urban settings, flood waters can interrupt small business activities and destroy merchandise. As with typhoons, these disruptions to livelihoods can lead to negative coping strategies. The EAP for Floods aims to reduce the economic impacts of extreme floods by supporting the following actions.

• Early harvesting of mature corn, rice and other high-value crops to prevent livelihood losses.
• Harvesting of mature fish from aquaculture operations to prevent loss of livelihood.
• Evacuation of livestock and key assets (for the reasons listed under ‘typhoons’).
• Relocating small urban businesses to ensure that their owners do not lose their merchandise in flood waters, and to allow them to continue sales and maintain their income.

For floods, it is proposed to trigger the early actions using GloFAS forecasts when the probability of reaching the five-year return period is more than 70 per cent. The maximum lead time to complete these activities is three days.

The actions in both EAPs are supported by cash-for-work activities in which the Philippine Red Cross hires farmers and fishermen to assist with early actions (e.g., shelter strengthening, building temporary structures for animals, harvesting crops). This provides community members with a source of cash to prepare their families for the event, or to offset losses.

The project is now working to develop a third EAP to address drought. A small-scale test activation for drought took place in 2019 and a feasibility study of potential triggers was carried out in February 2022.

In this project, the Philippine Red Cross coordinates with key government institutions, such as Office of Civil Defense, PAGASA (the meteorological department), the Department of Interior and Local Government, provincial disaster risk reduction and management offices, and the Department of Agriculture. Much of this coordination takes place through a national technical working group and provincial technical committees. Since the project began, the Philippine Red Cross and its partners have organized seven simulation exercises and four national dialogue platforms, as well as hosting the Asia-Pacific Regional Dialogue Platform in 2019.

Lessons learnt

Information, education and communication materials have been developed and published on the Anticipation Hub’s learning section. The project has developed several guidelines, videos and case studies to gather evidence of successful implementations and to advocate for the institutionalization of the FbF approach.

• A test activation of the EAP for Typhoons in 2019 showed that the kits to strengthen houses against wind and rain can be successfully installed by trained volunteers, workers and community members working together in the very short time frame between the trigger and storm making landfall (around 72 hours). This includes prior steps, such as household identification, transport and certain procurements.
• The project has had considerable success in integrating with government structures for disaster risk reduction at the provincial and local levels. This has been achieved through joint advocacy with other partners in the Philippines, such as WFP, FAO and the Start Network. The Philippine government has issued a memorandum (Memorandum 60) that allows local government units to access funding available for emergency responses for early actions - when an extreme event is forecast to affect at least 15 per cent of their population. A case study of how this can be implemented is under way.
• The Philippines provides strong examples of the use of local financing in FbF, and in scaling up this approach. For example, the Philippine Red Cross has signed a memorandum of understanding with Samar Province Local Government to allocate funds for financing the EAP for Typhoons.
• For its anticipatory action initiatives in the Philippines, the United Nations Central Emergency Response Fund is using the probabilistic trigger developed by the Red Cross 510 model, proving that the Philippine Red Cross and the German Red Cross are heavily involved in coordinating anticipatory actions within the country.

New EAP of the Forecast-based Financing Project

Videos showing experiences of implementing early actions in the Philippines

On this page you will find short videos from the Philippines Red Cross highlighting their experiences in implementing or simulating the following early actions: shelter strengthening kits, fish harvesting, relocating micro-enterprises, livestock evacuation, rice harvesting and abaca harvesting.

Business relocation as an urban early action: lessons and challenges from a simulation in the Philippines

While most early actions implemented to date have been in rural environments, there are growing efforts to expand anticipatory action to urban settings. This case study outlines lessons from a Philippine Red Cross simulation of relocating urban microenterprises in advance of floods. The study highlights critical challenges in the design and execution of urban early actions, including managing competing demands for people’s time and developing effective beneficiary selection procedures.