Water-related disasters to cost Philppines $124 billion

MANILA, Philippines — The Philippines stands to lose $124 billion until 2050 from water-related disasters such as floods and storms, according to a report by global professional services company GHD.

This will translate to an average annual gross domestic product (GDP) loss of 0.7 percent, GHD said in its latest report, “Aquanomics: The economics of water risk and future resilience.”

GHD has ranked the nation as the fourth most affected country in the world for water-related disasters, with approximately 20 typhoons entering the country annually, bringing torrential rain and extreme flooding.

And as global warming intensifies, extreme weather events are expected to increase, resulting in greater water risk to the country, it said.

The report showed storms would have the greatest direct impact on the Philippine economy, with losses reaching $47 billion, followed by floods at around $42 billion, and droughts at $3 billion until 2050.

On a per sector basis, Aquanomics revealed that the agricultural sector is particularly vulnerable, with an average annual output loss of 0.9 percent, or projected annual output losses of over five percent by 2030 and eight percent by 2050.

In terms of value, this would be equivalent to $23 billion.

In 2020, the sector generated a gross value added (GVA) of about P1.78 trillion, equivalent to a 10.2 percent share of the country’s GDP.

GHD said this is the first time that the economic impact of these three types of events has been calculated at a GDP and sector level.

The report said the rising threats to the agriculture sector need to be tackled now with greater focus on water recycling, desalination and smarter irrigation.

Meanwhile, GHD put focus on water supply and sanitation services, with three million Filipinos currently relying on unsafe water sources and seven million lacking access to improved sanitation.

“The Philippine Water Supply and Sanitation Master Plan calls for a total investment of around P1.1 trillion to achieve universal access to water and sanitation for all Filipinos by 2030. GHD partners with the country’s major water utility providers to achieve universal access to safe, sufficient and sustainable water supply,” GHD Global Water Lead Rod Naylor said.

GHD said no matter what size or sector, all businesses are dependent on water, which is crucial to enabling circular economies and global supply chains.

It also means no sector is protected against operational disruption in the face of water-related disasters.

“By focusing on economic impacts, as we have done with this study, we aim to help identify and unlock the social and environmental benefits of tackling water risk head-on. As well as highlighting risk, this study explores some of the ways in which our focus countries can adapt to change and build resilience in their water systems. With water risk on the rise, we need to adopt a proactive, holistic and inclusive approach in understanding and addressing fast-developing challenges,” Naylor said.

On flood management, the study indicates that investment needs to be targeted to build infrastructure in the right areas and work with nature to channel water away.

GHD’s study focuses on seven key countries across GHD’s footprint – Australia, Canada, China, the Philippines, the United Arab Emirates, the United Kingdom and the United States – and three US regions – the Northeast, Southeast and Southwest.