Assalamu alaikum wa Rahmatullahi wa Barakatuh.

I hope you had a safe and dry weekend despite the heavy downpour caused by Severe Tropical Storm "Crising" and the southwest monsoon, or habagat.

Our country's geographical location, as an archipelago along the Pacific Ring of Fire and the Pacific typhoon belt, predisposes us to various geological hazards and weather conditions, such as earthquakes, volcanic eruptions, and about 20 tropical cyclones annually. In fact, from 2022 to 2024, the Philippines topped the World Risk Index among 193 countries, making us the country most vulnerable to experiencing disasters. As we have seen many times, these hazards and conditions impact people's lives and our economy.

Hence, I believe that our ability to manage public funds is crucial not only to address the pressing needs of our kababayans today but to become resilient to these shocks and prevent disruptions in our pursuit of progress. As President Ferdinand R. Marcos Jr. (PBBM) emphasized in his speech at the 2024 Asia-Pacific Ministerial Conference on Disaster Risk Reduction, "Resilience and sustainability must underpin the national agenda of our economy."

I am glad to note that, on June 10, we launched the Disaster Resilient and Responsive Public Financial Management (DRR-PFM) Assessment Report, along with four other Reports: the Basic Public Expenditure and Financial Accountability (PEFA), Gender-Responsive PFM, Climate-Responsive PFM, and the Child-Responsive PFM.

Aligned with the PEFA Framework and utilizing the World Bank Diagnostic Tool, the DRR-PFM identified the strengths, challenges, and opportunities in our PFM system, which are critical to bolstering our country’s capability to address disaster-related risks and manage public funds more efficiently and effectively in post-disaster situations. The results of this assessment will serve as valuable inputs when we conduct the PFM Reforms Roadmap 2024-2028 midterm review and action planning. It will thus support the achievement of our Philippine Development Plan 2023–2028.

The assessment evaluated eight pillars, namely: 1) Institutional arrangements; 2) Resilient information systems and records; 3) Planning and budgeting for DRM; 4) Disaster-informed public investment and asset management; 5) Budget management, control, and Reporting during Disasters; 6) Disaster-Responsive Public Procurement; 7) Disaster-Responsive Audit and Oversight; and 8) Social Inclusion. These pillars have 27 elements. Using a three-point scale scoring system with yes, partial, and no, the summary score for each pillar then served as the overall score of the integration of the DRR with the PFM, classified as low, basic, moderate, and advanced. The assessment covered the central finance agencies (CFAs), as they regulate and manage core PFM functions, spending or line agencies, and oversight institutions.

The assessment revealed that our country has an advanced capacity for disaster risk management (DRM): 17 of the 27 elements showed advanced capacity for integrating disaster resilience and responsiveness (DRR) with PFM. Of these, nine elements were assessed to be fully integrating DRR with PFM. These include a clear mandate for disaster proclamation; institutional mandate for DRM; regulatory framework; information technology (IT) resilience; post-disaster treasury management; expedited procurement procedures; external audit, policy framework, and planning for social inclusion; and institutional coordination for social inclusion in DRM. Meanwhile, the other seven elements labeled as advanced but not fully integrated are the following: planning for IT resilience; fiscal risk assessment; disaster-informed asset management; post-disaster budget flexibility; post-disaster expenditure control; procurement planning of post-disaster response; and contract management.

On the other hand, eight PFM elements were evaluated as moderately integrating disaster risks, including CFA capacity for DRM; CFA business continuity planning; expenditure planning for disaster risk reduction and resilience; financing of disaster response and recovery; disaster-informed public investment management; transparency and disaster-related expenditure; legislative oversight; and a social-inclusion-informed budget system for DRM. Further, two elements demonstrated basic capacity, namely, accounting for and tracking disaster-related expenditure and participation. One element, the post-disaster internal audit, was assessed as having low capacity for DRR-PFM.

The assessment presents several opportunities for improving and integrating DRR into our PFM system. One is to strengthen the integration of CFA functions for better coordination. It also recommends the implementation and linking of government databases such as the National Asset Registry System (NARS), the Property Inventory Application, the Integrated Financial Management Information System, and the Social Protection Management Information System, as well as creating synergy between NARS and GeoRisk PH to provide real-time data for decision-making, maximize resource utilization, and enhance transparency on social protection expenditure. Further, it recommends capturing social protection payments from the Unprogrammed Appropriations as implicit contingent liabilities in the Fiscal Risk Statement. As accountability mechanisms, it encourages stronger scrutiny on the uses and impacts of disaster funds and enhanced citizen participation.

Beyond budget, the DRR-PFM Assessment Report sheds light on the strengths, challenges, and opportunities of incorporating resilience into government finance. Seizing the opportunities presented in closing these gaps will future-proof our PFM systems. Rest assured, the PBBM administration is determined to work together to ensure every peso spent will protect lives, safeguard our development gains, and create a safer, inclusive, and resilient Bagong Pilipinas.