DOF pushes enhanced climate-disaster finance for Philippines

The Department of Finance, in partnership with the Global Shield Secretariat and the Institute for Climate and Sustainable Cities, is spearheading the establishment of enhanced climate-disaster risk finance and insurance mechanisms in the Philippines.

“We aim to craft a proposal for a proactive solution, to be supported by Global Shield financing vehicles, a source of funding that is poised to bolster our financial defenses against the adverse effects of climate change and mitigate loss and damage, especially in the most vulnerable segments of our society,” DOF Chief of Staff and Undersecretary Maria Luwalhati Dorotan Tiuseco said during the Global Shield Country Workshop on Aug. 13, 2025.

The DOF serves as the national authority for mobilizing financial resources for the country’s climate actions and is currently developing the Climate Finance Strategy while updating the Disaster Risk Finance and Insurance Strategy.

The Global Shield against Climate Risks, a joint initiative of the G7 and the Vulnerable Twenty Group of Finance Ministers, aims to strengthen financial protection for climate-vulnerable nations by expanding access to pre-arranged finance.

The workshop gathered representatives from government, civil society, non-government organizations, private sector, academia, and bilateral and multilateral development partners to introduce the initiative and set priority actions for scaling up pre-arranged finance solutions.

German Ambassador to the Philippines Dr. Andreas Michael Pfaffernoschke expressed support for the Global Shield in-country process, highlighting the role of pre-arranged finance in reducing the fiscal impacts of climate disasters.

Germany, as part of the G7, is a key funding partner of the Global Shield against Climate Risks.

The Global Shield Secretariat and ICSC are supporting the DOF through the In-Country Process, which includes a multisectoral stocktake and gap analysis to assess the Philippines’ climate-disaster risk finance and insurance landscape.

Pre-arranged finance is a cornerstone of the government’s disaster risk management and climate adaptation approach, with existing measures such as emergency funds, contingent financing, and sovereign insurance under the 2015 DRFI Strategy.

Despite these mechanisms, a gap persists in making climate-disaster risk finance more cost-effective and accessible for vulnerable communities.

“It is important to note that this is not a new strategy on its own. The Global Shield project will complement and be integrated into our broader national efforts,” Undersecretary Dorotan Tiuseco said.

“By investing in CDRFI tools, we are not just bracing ourselves for the next storm––we are making an investment in long-term economic stability,” she added.

Stakeholders at the workshop assessed gaps in the country’s financing landscape and identified action points to expand pre-arranged solutions with support from the Global Shield and partners.

Discussions also examined the use of existing disaster financing instruments, including contingent finance and quick response funds, to aid vulnerable communities.

Recommendations included introducing innovative mechanisms such as parametric insurance and micro-insurance while maximizing the use of Local Government Units’ Disaster Response Funds for anticipatory financing.

“Resilience is not defined by the lack of vulnerability, but by our capacity to withstand shocks and adapt well in the face of adversity. There will always be challenges over the horizon, but with a strategic approach, we will overcome them,” Undersecretary Dorotan Tiuseco said.