Local Disaster Risk Reduction and Management Fund (LDRRMF)

LDRRMF – The Local Disaster Risk Reduction and Management Fund (LDRRMF) is a unique program in the Philippines that encourages local government investment in disaster risk reduction. The LDRRMF builds on a long-standing directive from the national government to local governments to set aside 5% of their budgets as a local calamity fund. Starting in 2012, the government introduced new legislation to authorize local governments to use up to 70% of these funds to support pre-disaster preparedness and risk reduction measures.

The LDRRMF features the following key provisions:

1. Section 21 of RA 10121 states that not less than five percent (5%) of the estimated revenue from regular sources shall be set aside as the LDRRMF to support disaster risk management activities such as, but not limited to, pre-disaster preparedness programs including training, purchasing life-saving rescue equipment, supplies and medicines, for post-disaster activities, and for the payment of premiums on calamity insurance.
2. Of the amount appropriated for LDRRMF, thirty percent (30%) shall be allocated as Quick Response Fund (QRF) or stand-by fund for relief and recovery programs in order that situation and living conditions of people In communities or areas stricken by disasters, calamities, epidemics, or complex emergencies, may be normalized as quickly as possible.
3. Unexpended LDRRMF shall accrue to a special trust fund solely for the purpose of supporting disaster risk reduction and management activities of the LDRRMCs within the next five (5) years.

The LDRRMF is a triumph for decentralization in the Philippines. In many examples elsewhere, roles and responsibilities for disaster management have been decentralized without attention to whether adequate funding is available to fulfill this mandate. By i) requiring that local governments set aside a portion of their operating budgets for disaster management and ii) encouraging local governments to use a significant portion of that funding for pre-disaster preparedness and risk reduction measures, the Philippines has developed a set of initial components for a comprehensive local government risk financing mechanism system that scales easily through existing budgeting structures.

Beyond the existing provisions, two further improvements have also been discussed. The first is to encourage risk pooling among local governments (to address imbalances between budget levels and risk exposure). The second is to encourage use of insurance to provide short- and medium- term fiscal protection against catastrophic risks during the time required to bring online necessary preparedness and risk reduction measures which may take 10-20 years to fully implement.

Joint Memorandum Circular No. 2013-1: Allocation and Utilization of the Local Disaster Risk Reduction and Management Fund, RA 10121 – National Disaster Risk Reduction and Management Act in 2010 (online)
http://www.dbm.gov.ph/wp-content/uploads/Issuances/2013/Joint%20Memorandum%20Circular/JMC2013-1.pdf, http://www.ifrc.org/docs/idrl/878EN.pdf