Natural disasters, debt crises top risks for Philippines, says survey

MANILA, Philippines — Natural disasters, debt crises, and high inflation are the top risks for the Philippines in the next two years, according to a survey conducted by the World Economic Forum (WEF).

Results of the Executive Opinion Survey (EOS) released as part of the WEF’s Global Risks Report 2023 showed Philippine business leaders consider natural disasters and extreme weather events as the top risk for the country in the next two years.

The Philippines is among the countries most prone to natural disasters and extreme weather events globally.

Conducted between April and September last year, the EOS covered over 12,000 respondents across 121 economies to determine the possible-short term risks at the country level.

For the survey, respondents were asked to select the top five risks they consider as posing the biggest threat to their country in the next two years from a list of 35 risks.

The WEF report showed Philippine respondents consider debt crises as the second biggest risk in the next two years, followed by rapid and/or sustained inflation.

Last December, the country’s headline inflation rate hit a 14-year high of 8.1 percent from eight percent in November amid faster food price increases.

Other top risks cited by Philippine respondents are misinformation, and geopolitical contestation of resources including technology, energy and minerals.

Globally, the WEF said the cost-of-living crisis or inability of broad sections of the population to maintain their current lifestyle due to higher costs of essential goods is the top risk identified in the short-term or over a two-year period.

The WEF said prices of basic necessities like food items, which were already increasing even before the COVID-19  pandemic, rose further last year due to disruptions brought about by the Russian invasion of Ukraine.

While the cost-of-living crisis is perceived by respondents to be a short-term risk, the WEF said its persistence could lead to a greater proportion of people unable to access basic needs.

“Continued supply-chain disruptions could lead to sticky core inflation, particularly in food and energy. This could fuel further interest rate hikes, raising the risk of debt distress, a prolonged economic downturn and a vicious cycle for fiscal planning,” the WEF said.

In  the long term or over a 10-year period,  failure to mitigate and adapt to climate change were cited as the most severe global risks, the WEF said.

As the demand to address other crises grows, the WEF said this would reduce the speed and scale of climate change mitigation efforts.

“Without significant policy change or investment, the interplay between climate change impacts, biodiversity loss, food security and natural resource consumption will accelerate ecosystem collapse, threaten food supplies and livelihoods in climate-vulnerable economies, amplify the impacts of natural disasters, and limit further progress on climate mitigation,” the WEF said.

As countries face ongoing shocks, the WEF said it is important for countries not to lose sight of the long term view.

“Climate and human development therefore must be at the core of concerns of global leaders to boost resilience against future shocks,” WEF managing director Saadia Zahidi said.