Philippine Institute for Development Studies Surian sa mga Pag-aaral Pangkaunlaran ng Pilipinas Disasters, Poverty, and Coping Strategies: The Framework and Empirical Evidence from Micro/Household Data - Philippine Case Danilo C. Israel and Roehlano M. Briones DISCUSSION PAPER SERIES NO. 2014-06 The PIDS Discussion Paper Series constitutes studies that are preliminary and subject to further revisions. They are be- ing circulated in a limited number of cop- ies only for purposes of soliciting com- ments and suggestions for further refine- ments. The studies under the Series are unedited and unreviewed. The views and opinions expressed are those of the author(s) and do not neces- sarily reflect those of the Institute. Not for quotation without permission from the author(s) and the Institute. January 2014 For comments, suggestions or further inquiries please contact: The Research Information Staff, Philippine Institute for Development Studies 5th Floor, NEDA sa Makati Building, 106 Amorsolo Street, Legaspi Village, Makati City, Philippines Tel Nos: (63-2) 8942584 and 8935705; Fax No: (63-2) 8939589; E-mail: [email protected] Or visit our website at http://www.pids.gov.ph Disasters, Poverty and Coping Strategies: The Framework and Empirical Evidence from Micro/Household Data - Philippine Case Danilo C. Israel and Roehlano M. Briones Abstract This study analyzed the interactions between natural disasters and household poverty and discussed the coping strategies used by households in response to natural disasters in the Philippines. It used data from the 2011 CBMS Household Profile Survey for Pasay City, Metro Manila and results of relevant past studies. The study found that a) there are existing analytical frameworks for the study of the interactions between natural disasters, household poverty and household coping strategies; b) some empirical studies have been done in the Philippines analyzing the aforementioned interactions; c) relevant past studies generally point to the negative effect of natural disasters on household income and subsequently on household poverty; and d) past studies also showed that households practice several coping mechanisms to address the effects of natural disasters. Furthermore, based on own estimation done, the study found that the occurrence and frequency of typhoons and/or floods in Pasay City, Metro Manila have significant and negative effects on household per capita income. It concluded that for Pasay City and other similarly situated urban areas in the country, natural disasters have a negatively impact on household income and consequently on household poverty. The study proposed future studies that can be conducted on the interactions between natural disasters and household poverty in the Philippines. Keywords Natural Disasters, Typhoons, Floods, Household Poverty, Household Coping Strategies, Pasay City, Metro Manila Disasters, Poverty and Coping Strategies: The Framework and Empirical Evidence from Micro/Household Data - Philippine Case Danilo C. Israel and Roehlano M. Briones1 I. Introduction Although understanding the interactions between natural disasters and poverty at the household level is highly important particularly for disaster-prone and poverty-stricken developing countries, empirical works on the subject have been limited so far. A major reason behind this is that standard national household surveys that have been conducted by countries generally do not include the collection of data and information relevant to natural disasters (de la Fuente et al. 2009). In more recent years, however, this situation has started to change with the design of hazard modules in some household surveys that include questions on natural disasters. In the Philippines, specifically, national household surveys have not yet included natural disasters in their coverage. While this is so, a number of site-specific and natural disaster-specific surveys have already been conducted by some studies and projects. In particular, a survey covering numerous selected sites in the country, the Community-Based Monitoring System (CBMS) Household Profile Survey, has recently added some natural disaster-related data and information among those that it collects and monitors. The availability of these new data and information may now allow some empirical analyses of the interactions between natural disasters and poverty in the country. Likewise, some site-specific and natural disaster-specific surveys on household adaptation and coping strategies in response to natural disasters have been undertaken in the Philippines. The results of these surveys indicated that numerous strategies have been employed by households before, during and after the occurrence of natural disasters. At present, however, there is there remains need to review and compare the results of these studies and see if some important commonalities and differences exist in the practice of coping strategies among households. This study looks into the interactions between natural disasters and household poverty in the Philippines. As corollary objectives, it reviews the adaptation and coping strategies used by households in response to natural disasters and the overall disaster risk reduction and management system existing in the Philippines. The study uses data from the 2011 CBMS Household Profile Survey for Pasay City, Metro Manila and results of relevant past studies. The specific objectives of the study are to: a) discuss the existing frameworks for analyzing the interactions between natural disasters and household poverty and the practice of coping strategies by households; b) review the evidence based on existing literature in the Philippines on the interactions between natural disasters and household poverty and on the practice by households 1 The authors are Ph.D.s and Senior Research Fellows of the Philippine Institute for Development Studies (PIDS), Makati City, Philippines. Research assistance was provided by Ma. Diyina Gem Arbo, Research Analyst II, also of PIDS. This study has been funded by the Economic Research Institute for ASEAN and East Asia (ERIA) based in Jakarta, Indonesia. Gratitude is also extended to the CBMS management and local government of Pasay City, Metro Manila for the use the CBMS Pasay dataset. of coping strategies; c) review the disaster risk reduction and management system in the Philippines; d) empirically estimate the relationship between natural disasters and poverty at the household level using Pasay City, Metro Manila as case study; and e) present the summary, conclusion and recommendations. II. Framework of Analysis 2.1 Natural disasters and household poverty A general framework for studying the effects of natural disasters at the household or community level was developed by Lindell and Prater (2003). In summary, the physical impact of a natural disaster on the households (e.g. damage on the house) is determined by several contributing factors (Figure 1). These factors include the geographical and natural conditions surrounding the households (e.g. whether the location of the household is hazard prone or not); hazard agent characteristics (e.g. intensity, scope and duration of the impact of the natural hazard); hazard mitigation practices of the households (e.g. building of a sturdy house); and emergency preparedness practices of the household (e.g. sandbagging of house surrounding). Figure 1: Model of Disaster Impact at the Household Level Household Recovery Resources or Coping Hazard Mechanisms and Extra Mitigation Assistance Practices Geographical and Social Impact Natural Factors, Physical at the Hazard Agents Impact Household Characteristics Level Emergency Socio-demographic and Preparedness Economic Factors Practices Sources: Adapted from Lindell and Prater (2003) and Rodriguez-Oreggia et al. (2008) 2 The aforementioned framework showed that after the physical impact, the social impact of a natural disaster on the households follows. This social impact is determined by the physical impact as well as a host of other contributing factors including the recovery resources available to or coping mechanisms practiced by the households (e.g. use of household savings for house repair), availability of extra assistance (e.g. government, non-government and other outside relief efforts) and the prevailing post-disaster socio-demographic and economic factors surrounding the households (e.g. the prevailing states of the economy of the household locality, region and country). An extension of the above framework that will allow the identification of the links between natural disasters and poverty among the affected households can be developed. To continue, the social impact of natural disasters can be classified into four different types (Figure 2). The first, socio-economic effects, consists of the direct losses (e.g. property loss) and the indirect losses (e.g. losses due to higher prices of food and other necessities) experienced by households after the occurrence of the natural disaster. These socio-economic losses are seen to likely reduce household income (from work and other income generating sources) resulting to increased poverty among poor households. The second, socio-demographic effects (e.g. dislocation of households), is also viewed to likely negatively affect households resulting again to reduced household income and increased poverty among poor households. The third, socio- political effects (e.g. rise in conflicts), are likewise seen to negatively affect households, particularly the less connected