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  • 7/25/2019 General Business Environment Environment and Natural Disasters

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    Joint Foreign Chambers Advocacy Paper

    ARANGKADA PHILIPPINES 2010: A BUSINESS PERSPECTIVE

    DECEMBER 2010266

    Environment and Natural Disasters

    For decades the Philippine environment has been under assault from a fast-growing population

    and practices that have degraded the countrys air, land, and water. Despite laws requiring trees tobe replanted, forests were clear cut and denuded areas abandoned, damaging watersheds and silting

    farmland and estuaries. Coral reefs were destroyed by dynamite blasting and the use of cyanide

    to stun tropical sh. Mangroves and their sh spawning shallow waters were converted to prawn

    ponds. Over half the countrys population lives in urban areas, where the air is often polluted and

    a silent-killer, and solid waste management and sanitation are highly inadequate. The percentage

    of the total population living in cities in the Philippines has long been higher than in other Asian

    countries (see Figure 157).

    Figure 157: Proportion of urban population, selected Asian countries, 1950-2010F

    Fortunately, there has been growing recognition of the problems such bad habits have created

    and an increasing desire to introduce sound environmental practices. More coastal communitiesunderstand that preservation of marine natural resources is critical for tourism and shing. The

    costs of polluted air in terms of death, disability, and medical care have become better understood.

    Logging continues, but at much reduced levels, as less forest remains, and enforcement of restrictions

    on illegal logging have increased. Several landmark laws have been passed: the Ecological Solid

    Waste Management Act, the Clean Air Act, and the Clean Water Act. These laws are, however,

    under-funded and poorly implemented.

    F

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    Environmental degradation harms the nations investment climate when it results in unhealthy

    living conditions, which deter foreign residents and visitors. The most adverse effects may be

    on tourism, when marine and mountain environments are degraded, making tourist destinations

    unattractive and sometimes unhealthy. Financial and economic cost of pollution is estimated atabout US$ 8.6 billion annually.

    Table 65: Estimated cost of air and water pollution in the Philippines

    Air pollution1,3 2.28 105.38 2007 119.0 2.5 1.55 WB-CEA-2009

    Water pollution 1.24 67.00 2003 94.2 2.0 1.23 WB-PEM 2003

    Water supply, sanitation

    and hygiene3.49 167.73 193.5 4.1 2.52

    Health1 2.77 127.90 2007 144.4 3.0 1.88 WB-CEA-2009

    Water in terms of usage2 0.65 35.56 2005 43.8 0.9 0.57 WSP, 2008

    Other welfare impacts2 0.04 2.07 2005 2.5 0.1 0.03 WSP, 2008 Tourism2 0.04 2.21 2005 2.7 0.1 0.04 WSP, 2008

    Sources: WB-PEM, 2003, The Philippines: Country Environmental Analysis WB-2009, Economic Impacts of Sanitation in the

    Philippines WSP-2008, NSCB (for GDP) and BSP (for ex rate)

    Note: 1-includes mortality and morbidity cost; 2-includes economic and fnancial impacts; 3-indoor and outdoor air pollution

    Source of pollutionAmount,

    billion$US

    Year% ofGDP

    Amount,billionPhP

    Amount,billion US$

    (2009 prices)

    Amount,billion PhP

    (2009 prices)Source

    Solid Waste

    Metro Manila faces a solid waste crisis and is running out of disposal capacity.200Under the

    Solid Waste Management Act (RA 9003), barangays are responsible for collecting and separating

    biodegradable, compostable, and reusable materials, while the municipality collects non-recyclable

    and special materials. Sanitary landlls must be built to contain the future solid waste of the

    metropolis. Once in place and better waste management is achieved at the barangay level, thecurrent sites can be closed. Because of leachate leaking hazardous chemicals into ground water and

    streams, the current dumps will still need to be cleaned.

    Under the 1999 Clean Air Act (RA 8749), all incineration is banned to prevent air pollution.

    However, the law ignored modern incineration technologies, which are non-polluting and can

    produce energy and construction materials as by-products. Aside from an imminent solid waste

    crisis, medical and chemical wastes are not properly disposed of or need to be shipped abroad.

    Metro Manila generates many tons of medical waste daily, but the law forced medical incinerators

    to close without providing an alternative.

    A Supreme Court ruling in January 2002 (GR 147465) afrmed that not all incineration is

    banned. The decision reads Section 20 [of the Clean Air Act] does not absolutely prohibitincineration as a mode of waste disposal; rather only those burning processes which emit poisonous

    and toxic fumes are banned.

    200 Asian Development Bank (ADB), The Garbage Book: Solid Waste Management in Metro Manila. ADB, 2004.

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    Despite the Supreme Court ruling, uncertainty remains, and incineration is not taking place.

    Environmental groups still claim that all incineration is banned to prevent air pollution. To avoid

    a solid waste crisis, the DENR should establish clear rules and standards that would allow modern

    incineration technologies. There is also a need to amend the Act to allow modern incinerators thatmeet clean air emission standards.

    Air quality

    Despite passage of the strict Clean Air Act, many vehicles, especially trucks, buses, jeepneys,

    and two-stroke motorcycles, spewing noxious fumes still ply Metro Manilas streets due to weak

    enforcement of pollution standards and corruption of mid-level ofcials. Licensed private emission

    stations have operated for more than a decade, but smoke-belching vehicles with up-to-date stickers

    on their license plates that passed the emission test remain on city streets. National and local

    government should demonstrate greater political will to reduce air pollution in the megalopolis and

    lessen this serious public health hazard.

    Bangkok, Beijing, Dhaka, New Delhi, and Seoul, cities where natural gas is now widely used

    for many public transit vehicles, are good examples for the Philippines to learn from. A Natural

    Gas Vehicle Program for Public Transport, started in 2004 under EO 290, allowed bus companies to

    import and operate 200 buses fueled by Compressed Natural Gas (CNG). However, the program has

    not been successful, reportedly due to technical difculties accessing the CNG from the countrys

    only natural gas eld.

    Many taxis in Metro Manila are converting from gasoline to Liqueed Petroleum Gas (LPG)

    fuel in order to save fuel costs. Since 2006, over half of the more than 30,000 taxis in Metro Manila

    have converted to LPG.

    Much rmer enforcement by local authorities is essential to rid the streets of the principal causes ofair pollution. Polluting two-stroke engines should be replaced by 4-stroke, as has happened elsewhere.

    Overall, these various efforts are reportedly preventing Manila air from getting dirtier but have

    not been sufcient to improve it to healthy levels. The DENR reports the quality of air may have

    slightly improved. According to the Total Suspended Air Particulates Air Quality survey released

    by the DENR in 2009, the air quality of the metropolis in 2008 averaged 138 micrograms of

    pollutants per normal cubic meter, far above the 90 micrograms target set by the DENR. The air

    quality of the metropolis improved from 160 micrograms in 2004 to 132 micrograms in 2007.

    Epifanio de los Santos Avenue (EDSA) continues to have the dirtiest measured air in the country

    with 282 micrograms, over twice the Metro Manila average. Tests conducted by the DENR in

    the rst quarter of 2010, however, showed an increase of suspended particles in the air to 190

    micrograms per normal cubic meter.

    Water Infrastructure

    In July 2010, the United Nations General Assembly passed a resolution declaring access to

    clean water and sanitation a basic human right. Whether an urban or a rural resident, every Filipino

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    would like to have ready access to clean, inexpensive water, but does not. There are also problems

    involving the disposal of wastewater and a need to better educate the public about the growing

    problem of sewage pollution, which can have grave effects on health.

    The Philippines faces two major challenges in improving water resources: supply and quality.

    In large urban areas such as Metro Manila, adequate supply in the future is an issue in the absence

    of large expenditures on infrastructure. In remote rural areas, distribution is poor. Years of

    deforestation have reduced watersheds. Over-population is shrinking aquifers. Some are threatened

    with salt-water intrusion.

    Another problem is declining water quality due to sewage pollution in many rivers and coastal

    areas. Except for some areas of Metro Manila, only a few (Bacolod, Baguio, Cebu, Davao, Vigan

    and Zamboanga) out of more than 100 cities and 1,600 municipalities have sewage systems. In

    addition to the runoff of raw sewage into clean water resources, open pit dumpsites used for solid

    waste throughout the country create leachate (concentrated organic and inorganic pollutants) that

    seeps into groundwater, rivers, and lakes. As a result, water in some bays and coastal areas isbecoming unsuitable for swimming, tourism, and sh spawning.

    The Clean Water Act (RA 9275), signed in 2004, is a beginning to solving sewage pollution.

    The law: (i) requires designation of multi-sectoral Water Quality Management Areas (WQMA)

    to monitor and upgrade local water resources; (ii) mandates preparation of a national sewage

    and septage program and requires interconnection of all existing sewage lines; (iii) requires

    implementation of a wastewater charge system for all industries located in WQMAs that discharge

    wastewater and a nancial liability mechanism under which new factories and infrastructure

    will put up an environmental guarantee fund, insurance, or bond; and (iv) provides investment

    incentives for compliance in the form of scal and non-scal incentives under the Investment Code

    for projects involving wastewater treatment and water pollution control.

    The most important public utility privatization undertaken in the Philippines was that of MWSS

    in early 1997, with technical assistance from the International Finance Corporation. The privatization

    resulted in two concessions and was internationally recognized as a major accomplishment. After

    13 years of operations, the two concessionaires Manila Water Company (a Filipino-UK-Japan

    joint venture) and Maynilad Water Services (initially a Filipino-French joint venture and now

    Filipino-Hong Kong) have demonstrated the effectiveness of the PPP model.

    One of the Millenium Development Goal (MDG) targets by 2015 is to reduce by half the

    proportion of the population without sustainable access to safe drinking water and basic sanitation.

    To meet this MDG target, the Philippines must raise water access to over 92% by 2015 (that is

    reducing the waterless by at least half between 1990 and 2015). The Philippine data were based

    on the National Demographic and Health Survey (NDHS) and Multiple Indicator Cluster Survey(MICS) of UNICEF. Given the data of the WHO and UNICEF, the country is on track of surpassing

    that goal as it is already at 91% as of 2008 (see Figure 158).

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    Figure 158: Proportion of population with access to safe drinking water sources

    84% 93%

    76%

    88% 93%82%

    91% 93% 87%

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%80%

    90%

    100%

    Total Urban Rural

    1990

    20002008

    Sources: Joint Monitoring Program reports of UNICEF and WHO, 2006 and 2008 issues

    Figure 159: Proportion of population with access to sanitary toilet

    58%

    70%

    46%

    69%76%

    59%

    76% 80%69%

    0%

    10%

    20%

    30%

    40%

    50%

    60%70%

    80%

    90%

    100%

    Total Urban Rural

    1990

    2000

    2008

    Sources: Joint Monitoring Program reports of UNICEF and WHO, 2006 and 2008 issues

    However, anecdotal evidence suggests these gures are overestimated. At present, there are

    still about 400 municipalities (out of more than 1,600) that remain waterless (dened as less than

    50% of the population has access to potable water).201Moreover, a World Bank expert on water

    and sanitation has expressed concern that high urbanization and underinvestment in water and

    sanitation in urban slum areas means the Philippines may not meet this MDG target. As many ofthese urban residents are informal settlers, local government is usually reluctant to provide such

    infrastructure.202

    Deforestation

    The extensive deforestation of the country over a century has been the largest contributor to

    the contemporary degraded environment. Improved protection of watersheds, rivers, and estuaries

    is essential, as are programs of reforestation and developing sustainable upland agriculture

    practices.

    201 The Presidents Priority Program on Water (P3W) launched in 2005 to address the potable water needs of then 432 municipalities

    identied as waterless, was marred by technical, administrative, and bureaucratic problems resulting in little improvement in the

    welfare of target areas. Insertions of municipalities not included in the established target list was made possible by inuential political

    gures and constant changes in the leadership of the National Anti-Poverty Commission (NAPC), which is the lead agency, are only

    some of the concerns the program encountered. The program was given PhP 5 billion by the National Government to nance water

    projects between 2005 and 2010.

    202 Article by Michelle Remo, Philippine Daily Inquirer, April 28, 2010

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    Figures 160 shows the decline of Philippine forest cover from 90% of the countrys total land

    area in 1934 to around 20% in 2007.203Figure 161 shows that the rate of deforestation in the

    Philippines from 1990 to 2007 was signicantly higher than in Indonesia, Malaysia, Thailand, and

    Vietnam. That rate, 3% between 1990 and 2000, declined to 2% since 2000. The Philippines mustwork harder to reduce it further and reverse the decline as the present forest cover is critically low.

    In Vietnam the reforestation rate has been 2% over the past two decades.

    Figure 160: Philippine forest cover, 1934-2007, mil has, % total land area

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    0

    2

    4

    6

    8

    10

    12

    14

    16

    18

    1934 1970 1990 1997 2003 2005-07

    Forest cover, Mil Ha, lhs

    % of total land area, rhs

    Sources: CEA 2009, Bureau of Forest Management and FAO

    Figure 161: Deforestation rates, selected countries, 1990-2007

    1.7%

    0.4%

    2.8%

    0.7%

    -2.3%

    2.0%

    0.7%

    2.1%

    0.4%

    -1.9%-3.0%

    -2.0%

    -1.0%

    0.0%

    1.0%

    2.0%

    3.0%

    4.0%

    Indonesia Malaysia Philippines Thailand Vietnam

    1990-2000

    2000-2007

    Source: ADB; Negative values mean reforestation (e.g. in the case of Vietnam)

    Disaster Prevention

    Philippine urban areas have developed with very little planning

    to mitigate the effects of ooding, landslides, earthquakes, and other

    potential disasters, despite the frequency of these events in the country.

    During the dry season, res are common in slum areas of cities.

    Storms and oods are the major types of disasters in thePhilippines, both in terms of frequency and the number of people

    affected (see Figures 162 and 163). Earthquakes and volcanic

    eruptions, while more dramatic, are infrequent.

    203 Forest is a minimum area of land of 0.05-1.0 hectares with tree crown cover of more than 10-30 per cent with trees with the

    potential to reach a minimum height of 2-5 metres at maturity in situ. (FAO, 2006)

    In the wakeof Haiti and

    Chile, earthquake experts

    have been scanning the

    globe for other high-risk

    areas and most agree that

    the likelihood of a major

    earthquake in Manila is

    high.

    PSA report, August 2010

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    Metro Manila has grown rapidly but has not experienced a serious earthquake since 1968, when

    the Ruby Tower apartment building collapsed killing 268 sleeping residents during an intensity 7.3

    earthquake. In 1990 an earthquake of intensity 7.8 struck north of Manila and killed 1,621 persons

    in Cabanatuan and Baguio. A recent study assessed the probability of extensive damage to thecapital in the event of a major earthquake on the scale of those in recent years in Sichuan, China

    (intensity 8.0 killed at least 68,000 persons) or Haiti (intensity 7.0 killed an estimated 230,000

    persons).204

    Figure 162 shows the frequency of natural disasters for the current and three previous decades.

    The frequency of natural disasters has doubled over 40 years to an average of 15 each year. During

    the same period, the number of persons affected by natural disasters has more than doubled to some

    50 million (see Figure 163). Damage from natural disasters has averaged around US$ 300 million

    a year (see Figure 164).

    Figure 162: Total frequency of natural disasters, Philippines, per decade, 1970-2009

    0

    20

    40

    60

    80

    100

    120

    140

    160

    1970-1979 1980-1989 1990-1999 2000-2009

    Others

    Flood

    Storm

    Source: CRED International Disaster Database; Note: Others include earthquakes, epidemics, extreme tempincidents, insect infestations, wet & dry mass movements, volcanic eruptions, and wildfires.

    Figure 163: Number of people affected by natural disasters, Philippines, in Mn,per decade, 1970-2009

    0

    10

    20

    30

    40

    50

    60

    1970-1979 1980-1989 1990-1999 2000-2009

    Others

    Flood

    Storm

    Source: CRED International Disaster Database

    204 Metro Manila Earthquake Vunerability Assessment, Pacic Strategies and Assessments, August 2010

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    Figure 164: Estimated damage of natural disasters, Philippines, in US$ Bn,

    per decade, 1970-2009

    0.0

    0.5

    1.0

    1.5

    2.0

    2.5

    3.0

    3.5

    1970-1979 1980-1989 1990-1999 2000-2009

    Source: CRED International Disaster Database

    Urbanization has reduced the drainage and storage capacity of creeks, rivers, and lakes to

    hold water, as they become clogged with garbage and mud, making inhabited areas nearby more

    vulnerable to ooding. Typhoon Ondoy (Ketsana) in September 2009 documented a record-highamount of rainfall in 24 hours of 18 inches (in Quezon City). The storm killed 464 persons and

    caused damages estimated at US$ 237 million.

    It is necessary not only to make buildings safer, earthquake-resistant, ood-proof, and

    reproof, but also to improve roads, open spaces, and parks that can prevent the spread

    of re, while at the same time raise government and citizen preparedness for disasters in

    order to minimize the potential loss and damage to life and property.

    Architect Jun Palafox, urban planner,MAP Statement, February 2, 2010

    Global Warming

    As a relatively small developing economy, energy consumption in the Philippines is a minor

    contributor to global warming. Its level of CO2 emissions per capita, after doubling over the

    period 1986 to 1996, has been stable in the subsequent decade and is the lowest of the ASEAN-6

    (see Figures 165 and 166). However, continuing deforestation in the country is adding to global

    warming.

    As the worlds second largest archipelago with a total coastline of 36,289 kilometers, the

    countrys shores and estuaries will be subject to inundation as seas rise. As throughout Southeast

    Asia, much of the population lives near river mouths, since marine travel was prevalent for

    millennia, and modern land and air travel are less than a century old. As the sea rises, ooding of

    these littoral communities will increase and force their inhabitants to relocate to higher ground,which could reduce available land for agriculture.

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    Figure 165: Philippines CO2 emission from energy consumption, 1980-2008

    0.0

    0.3

    0.6

    0.9

    1.2

    0

    10

    20

    30

    40

    50

    60

    70

    80

    90

    1980

    1981

    1982

    1983

    1984

    1985

    1986

    1987

    1988

    1989

    1990

    1991

    1992

    1993

    1994

    1995

    1996

    1997

    1998

    1999

    2000

    2001

    2002

    2003

    2004

    2005

    2006

    2007

    2008

    Total CO2 emissions from consumption of energy, in mil MT, lhs

    Per capita CO2 emission from energy consumption, MT, rhs

    Source: EIA

    Figure 166: Per capita emission from energy consumption, 2008, in MT,

    selected countries

    0 5 10 15 20 25 30 35 40

    Philippines

    Vietnam

    India

    Indonesia

    Thailand

    China

    Malaysia

    Japan

    Korea, South

    United States

    Australia

    Singapore

    Source: EIA

    Headline Recommendations

    Implement policies prescribed by the Solid Waste Management Act, CleanAir Act, and Clean Water Act. Deal effectively with the solid waste challenge.Reduce air and water pollution. Clean rivers. Improve access to water and

    sanitation. Establish clear rules and standards that would allow modernincineration technologies. Amend the Clean Air Act to allow non-pollutingclean incineration.

    1.

    Benet tourism, agriculture, and sheries by ending deforestation, beginningreforestation, and rebuilding damaged coral reefs.

    2.

    Emphasize disaster prevention as well as disaster relief. Reduce oodingby improving drainage, zoning, and infrastructure. Make cities safer against

    earthquakes. Plan effectively for the impact of climate change/global warming.

    3.

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    Recommendations: (14)

    A. Environment: Solid Waste. Implement the Solid Waste Management Act (RA 9003). Build

    sanitary landlls to contain the future solid waste of the metropolis and clean up existingdumpsites. Improve garbage collection and recycling. Establish clear rules and standards that

    would allow modern incineration technologies. Amend the Clean Air Act to allow non-polluting

    clean incineration. (Medium-term action by DENR, MMDA, LGUs, and private sector)

    B. Environment: Air. Implement the Clean Air Act (RA 8749). Clean Manilas air faster by

    removing all vehicles that fail to meet pollution standards. Crack down on corrupt emission

    stations. Replace 2-stroke with 4-stroke engines. Convert jeepneys and buses from diesel to

    natural gas. (Medium-term action by DENR, DOTC, and DTI)

    C. Environment: Water. Implement the Clean Water Act (RA 9275) to increase sewage systems

    and water treatment plants in all cities and municipalities in order to reduce water pollution.

    (Long-term action DENR, DPWH, LGUs, and private sector)

    D. Environment: Rivers. Replicate the KapitBisig Para sa Ilog Pasig (KBPIP) project to clean

    and restore the Pasig River for other polluted waterways. (Medium-term action private sector)

    E. Environment: Water. Increase access to water and sanitation facilities for more Filipinos, in

    waterless municipalities and for residents of slums in urban areas. (Long-term action DENR,

    DPWH, LGUs, and private sector)

    F. Environment: Reforestation. Reduce the rate of deforestation to zero. Protect remaining

    forests effectively and increase reforestation of damaged watersheds. (Long-term action

    DENR, LGUs, and private sector)

    G. Environment: Reefs. Continue to ght illegal shing methods that destroy reefs. Expand reef

    restoration programs and education of coastal communities. (Immediate action DENR, LGUs

    and private sector)

    H. Environment: Plastic Bags. Educate the public to use reusable non-plastic bags and consider

    laws to reduce the widespread use of plastic that pollutes the marine environment and clogs

    waterways. (Immediate action DENR, Congress, LGUs, and private sector)

    I. Disasters: Prevention. Incorporate disaster prevention, not just disaster reaction, into planning,

    development, and education. (Medium-term action NEDA, LGUs, and private sector)

    J. Disasters: Typhoon Warning Systems. Install Doppler radars, capable of predicting rainfall,with coverage of Luzon and Visayas. Improve alert systems when typhoons are approaching

    and when full dams need to spill water. (Immediate action PAGASA, DOST, DILG, LGUs, and

    private sector)

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    K. Disasters: Flood. Seek to create ood-proof cities by undertaking extensive ood-control

    measures, improving drainage, building dikes and water retention facilities, and planting trees.

    (Medium-term action DENR, DPWH, DILG, LGUs, and private sector)

    L. Disasters: Earthquakes. Develop and implement a program to make cities safer against

    major earthquakes. Make gas, electric, and water supply facilities more secure and make codes

    for building construction stricter following best practices to more advanced countries. Audit

    buildings and infrastructure for safety. (Medium-term action DENR, DILG, LGUs, and private

    sector)

    M. Disasters: Hazard Maps. Prepare and publish Hazard Maps for earthquakes, ooding,

    volcanic eruption, tsunami, re, and rising water levels due to climate change and other hazards.

    (Medium-term action concerned agencies)

    N. Global Warming. Implement the planning, educational and other tasks of the Philippine

    Climate Change Commission (PCCC) created in 2010 by the Philippine Climate ChangeAct (RA 9729) especially making the country better prepared to deal with natural disasters.

    (Medium-term action OP and concerned agencies)