According to the Organisation for Economic Cooperation and Development (OECD), the Philippines could lose as much as one-fifth of its economic output within the next five decades if climate change effects continue unchecked, undermining long term growth and fiscal stability.
A high-emission scenario could shrink gross domestic product (GDP) by about 5 percent as early as 2040, with losses accelerating to 20 percent by 2070.
“As a tropical island nation, the Philippines is projected to remain severely impacted by climate change, with more intense and more frequent typhoons, accelerated sea level rise, and more extreme rainfall events – all posing grave risk to businesses, communities, infrastructure, and ecosystems,” the OECD said in its first Economic Survey of the Philippines.
Further, extreme weather events can cut local economic activity by up to 2.2 percent on impact, with about 1.7 percentage points of that contraction persisting even five years later, despite post-disaster adaptation, relief, and reconstruction efforts.
The OECD said this underscores the need to integrate climate change and its consequences into economic activity, employment, inflation, fiscal space, and public indebtedness.
The Paris-based organization also flagged the lack of projections of the future fiscal change of climate change in the country’s Medium-Term Fiscal Framework (MTFF) and Debt Sustainability Analysis (DSA).
The country is already ranked first among 193 countries in the World Risk Index due to high exposure to hazards, compounded by an average of 20 typhoons annually, frequent earthquakes, volcanic activity, flooding, and sea level rise.
Beyond science, societal vulnerability among the poor is heightened by fragile infrastructure and limited adaptive systems.
It also noted that despite the mounting risks, most households remain uninsured, leaving millions vulnerable to climate-related losses.
A country as disaster-prone as the Philippines, even without taking the effects of climate change in mind, should already know by now that it still needs to do more to protect its people from losses. Warning systems need improvement, Infrastructure and adaptive systems needs to be made more robust, and protections such as insurance encouraged in areas known to be vulnerable. If these investments can prevent losses and facilitate recovery, we wouldn’t waste so much time and resources getting back on our feet every time disasters strike.*
