Manila to lose more than NY due to natural, man-made risks
ManilaÕs exposure to natural and man-made risks is fourth highest in the world and first in the Association of Southeast Asian Nations (Asean), the Lloyd’s City Risk Index 2015-2025 report said.
In the report, Manila’s total “GDP@Risk” or potential impact of risks on the economic output is $101.1 billion (about P4.7 trillion), or 50.3 percent of the city’s average annual gross domestic product (GDP).
Manila was just behind the cities of Taipei (with a GDP@Risk at $181.2 billion), Tokyo ($153.3 billion) and Seoul ($103.5 billion) and ahead of New York ($90.4 billion).
In the Philippines’ capital city, wind storms put at risk $60.7 billion; earthquakes, $13.3 billion; volcanic eruptions, $5.8 billion; flooding, $5.5 billion; market crashes, $4.8 billion; human pandemic, $3.5 billion; oil price shocks, $2.4 billion; droughts, $1.9 billion; terrorism, $760 million; sovereign defaults, $710 million; tsunamis, $510 million; power outages, $470 million; solar storms, $310 million; plant epidemics, $290 million; and cyber-attacks, $290 million.
“Natural threats account for more than 90 percent of Manila’s economic exposure. Its total GDP@Risk is the fourth highest in the index and is dominated by wind storm, [in which] its economic exposure is the second highest globally,” Lloyd’s said.
“The impact of wind storms on the Philippines was starkly demonstrated in 2013, when Typhoon ‘Haiyan’ (Yolanda) killed more than 6,000 people and destroyed or damaged the homes of five million. The Financial Times subsequently reported losses of between $12 billion and $15 billion. But Haiyan was the 25th major storm to hit the country that year, so the cumulative effect of wind storm is much greater,” the report said.
“Manila is also located on the edge of the Ring of Fire, a series of tectonic faults and other volcanic features that produces around 90 percent of the world’s earthquakes. Consequently, it has the world’s ninth highest economic exposure to earthquake, the fourth largest to volcano and the sixth largest to tsunami. It is ranked 10th globally by potential losses from drought,” it said.
“Although proportionally less significant (at 9.3 percent), its man-made threats still account for $9.4 billion of risk to GDP, with market crash and oil price shock the most important. Human pandemic accounts for the majority of Manila’s emerging threats,” Lloyd’s said.
According to Lloyd’s, known as a “specialist insurance market,” the report was “based on original research by the Cambridge Center for Risk Studies at the University of Cambridge Judge Business School.”
The index measured the GDP@Risk of 301 of the world’s major cities from 18 man-made and natural threats, Lloyd’s said.
“The index shows how governments, businesses and communities are highly exposed to systemic, catastrophic shocks and could do more to mitigate risk and improve resilience,” it said.
Lloyd’s said a total of $4.6 trillion or 12.2 percent of the average annual GDP of the cities covered by the report are at risk in the 2015-2025 period. Ben O. de Vera
