Case Study

Jhon Kent Lantaco BSDRM-D
Case Study: Typhoon Haiyan (Yolanda) – Philippines

Background of the Disaster
Time: November 8, 2013
Location: Central Philippines (Eastern Visayas, Leyte, Samar, and surrounding regions)
Impact: Typhoon Haiyan (locally known as Yolanda) was one of the strongest tropical cyclones ever
recorded, with winds reaching 315 km/h (195 mph). The storm triggered massive storm surges up to 6
meters high, flooding coastal areas and devastating towns and cities. Over 6,300 people were killed,
more than 28,000 were injured, and approximately 1,800 were reported missing. About 4 million people
were displaced, and the economic damage was estimated at $14 billion, affecting homes, livelihoods,
and infrastructure.
What financing or insurance mechanisms were in place prior to the disaster?

Before Typhoon Haiyan, the Philippines had several disaster risk financing and insurance mechanisms in
place, but they were limited in their capacity to cope with a disaster of such magnitude:
 Philippine Disaster Risk Reduction and Management Act (2010):

This legislation established the National Disaster Risk Reduction and Management Council (NDRRMC),
which coordinates disaster preparedness, response, and recovery. It mandated local governments to
allocate 5% of their Internal Revenue Allotment (IRA) to the Local Disaster Risk Reduction and
Management Fund (LDRRMF) for disaster risk reduction (DRR) activities and response.
 Government Catastrophe Insurance

The Philippine government had a limited catastrophe insurance program to protect public assets (e.g.,
schools, hospitals, and government buildings) against natural disasters like typhoons, floods, and
earthquakes. This program provided some protection for government infrastructure but was not
extensive enough to cover all public assets or immediate recovery needs.
 Private Insurance:
Private insurance in the Philippines was underdeveloped, with low penetration rates, especially in rural
areas. While some businesses and wealthy households had property insurance that included typhoon
coverage, a large proportion of the population, particularly in highly vulnerable areas, were not insured.
How did these mechanisms support the recovery process?

 Government Response and Local Disaster Funds:
The national government, through the NDRRMC, quickly mobilized resources from the National Disaster
Risk Reduction and Management Fund (NDRRMF) for emergency response, including providing food,
water, medical assistance, and temporary shelter. Local governments used their Local Disaster Risk
Reduction and Management Funds (LDRRMF) to initiate relief operations; however, many local
governments, especially in severely affected areas, exhausted their funds quickly due to the
overwhelming scale of the disaster..
 Private Insurance:
The insurance payouts from private insurers were limited, as most affected people in the disaster-prone
areas did not have typhoon insurance coverage. However, businesses and homeowners who were
insured received payouts that helped finance rebuilding efforts, although the insurance sector struggled
to cope with the massive claims.
 Post-disaster Recovery and Rehabilitation:

The Philippine government, with support from international financial institutions and foreign
governments, launched a comprehensive rehabilitation program called “Build Back Better” to rebuild
homes, infrastructure, and livelihoods in affected areas. A series of supplemental budgets were enacted
to finance the long-term recovery, which included housing reconstruction, road repairs, and livelihood
programs.
What lessons were learned from this event about the role of disaster risk
financing and insurance?
One of the main lessons from Typhoon Yolanda was the lack of sufficient insurance coverage,
particularly among the poor and rural populations. The government and private sector recognized the
need to expand insurance coverage for vulnerable populations to improve financial resilience. Micro-
insurance initiatives have since gained traction, offering low-cost insurance products tailored to the
needs of lower-income households.
.
 Strengthening of Public Asset Insurance:
The need to expand and strengthen the government’s insurance coverage for public infrastructure
became evident. The significant damage to schools, hospitals, and roads put immense pressure on
recovery efforts. Following Typhoon Haiyan, the Philippine government has worked to expand its
catastrophe insurance program to include a broader range of public assets.
 Emphasis on Risk Reduction and Resilience Building:

The scale of destruction prompted a shift in focus from disaster response to disaster preparedness and
resilience-building. The Build Back Better approach emphasized constructing more resilient
infrastructure, reinforcing coastal defenses, and adopting climate-resilient agriculture and livelihood
practices. Additionally, early warning systems were enhanced to better prepare communities for future
disasters.

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Jhon Kent Lantaco BSDRM-D

Case Study: Typhoon Haiyan (Yolanda) – Philippines

What financing or insurance mechanisms were in place prior to the disaster?

 Philippine Disaster Risk Reduction and Management Act (2010):

 Government Catastrophe Insurance

How did these mechanisms support the recovery process?

 Post-disaster Recovery and Rehabilitation:

 Emphasis on Risk Reduction and Resilience Building:

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