B-READY for a paradigm shift

Residents of Barangay Asgad, Salcedo, Eastern Samar participates in the B-READY Users’ Orientation led by the People’s Disaster Risk Reduction Network. (Photo: Jhomar Padullo/PDRRN)

Residents of Barangay Asgad, Salcedo, Eastern Samar participates in the B-READY Users’ Orientation led by the People’s Disaster Risk Reduction Network. (Photo: Jhomar Padullo/PDRRN)

The digital financial inclusion program is meant to be adaptive to the needs of communities and partners that Oxfam has been working with for many years now.
Maria Theresa Abogado, Senior Manager for Programs and Partnerships
Oxfam Pilipinas

Learning from an innovative strategic investment in pre-disaster preparedness

More than three decades of humanitarian policy and work on the ground in the Philippines have pushed Oxfam Philippines to staunchly support the development of a community-led, innovative, and strategic disaster response and preparedness system that is both science- based and informed by an understanding ofcommunity norms and behaviors.

Oxfam’s B-READY initiative combines an EWS for typhoons with digital financial inclusion in helping vulnerable communities. The initiative is powered by strengthened disaster governance.

Maria Theresa Abogado, Oxfam Philippines’ Senior Manager for Programs and Partnerships, who led the development of the

B-READY concept, points to the many years of implementing, testing, and refining Oxfam’sfinancial inclusion programs in disaster- affected communities in the Visayas and Mindanao.

Recalling Oxfam’s response in the provinces of Eastern Samar and Leyte, Visayas in 2013, where Super Typhoon (STY) Haiyan (local name: Yolanda) left thousands dead and millions in assets and livelihoodsdestroyed, as well as the response to the victims of Typhoon Tembin (local name: Vinta) in the province ofLanao del Sur, Mindanao in December 2017, Abogado

explains the paradigm shift in disaster response that she hopes the national government, local governments, humanitarian organizations and socially responsible businesses will consider.

“The digital financial inclusion program is meant to be adaptive to the needs of communities and partners that Oxfam has been working with for many years now,” Abogado says. She notes that communities affected bydisasters expressed a willingness to evacuate to safer locations before a disaster strikes if they have the cash to buy the provisions they need while they are displaced.

“This is the paradigm shift—instead of providing cash assistance when communities are already affected, we provide the cash support to help them prepare. This will increase their resiliency, as well as provide them the dignity of making their own decisions about how best to prepare. When we put inplace what they need before disaster strikes, they are afforded more dignity and also have better chancesfor quick recovery, survival, and importantly, zero casualty,” Abogado points out.

“Those living in low-lying areas can evacuate early before a typhoon’s landfall, and the ensuing storm surgeand flood. When there are no more spaces in evacuation centers and schools, families can use the cash in hand

for transportation and emergency food. Such arrangement gives them more dignity and better chances ofsurvival. “This innovates on the use of cash transfer,” Abogado notes.

For resilience to work, she says, there have to be investments at the government, business, community, and individual levels. The government has to lead, business has to feel responsible in protecting their clients and the community where they operate, and individuals should have the knowledgeand capacity to act.

To operationalize these investments, Oxfam along with its partners implemented B-READY in the municipalityof Salcedo in Eastern Samar. The effort covered 2,000 households from January 2019 to December 2020. There were delays in implementation and adjustments in mobility when the COVID-19 pandemic set in, but accomplishments and learning have been gathered asevidence that B-READY is a promising socio-scientific innovation.

Science-based social protection

A critical addition to the B-READY approach to humanitarian response is the use of weather forecastinformation to equip local stakeholders, particularly local government leaders who call the shots onpreparations based on information they have. “When they are equipped with the right information, they caneasily understand and use early warning information that allow them to prepare in advance,” Abogado says.

Using the parametric index, forecast information is combined with historical data on disaster events inthe community and how the community was affected by previous disasters. Partnering with GlobalParametrics, B-READY uses historical data from the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) and forecast information from more than 20 forecast agencies to assess a coming typhoon. Such set-up helps localgovernments and communities decide whether to stay or evacuate, and what and how to prepare.

When pre-agreed triggers are met, cash is released to vulnerable households before the disaster, using digitalplatforms. Installing triggers, B-READY comes up with scientific estimates on the possible effects of thecoming typhoon on a particular area.

“The increased intensity and frequency of extreme weather events brought about by climate change makes theB-READY model even more important,” Abogado explains further.

On top of historical data and forecast information, B-READY incorporates social vulnerability. It looks at theimpact of typhoons on geographically exposed areas, poor communities, houses with light materials and related factors. Data from the community are collected and integrated with other social vulnerabilityindicators that include income, access to finance, and productive resources.

B-READY innovates on the combined use of historical data, forecast information and social vulnerabilitiesto create a parametric index, which develops the triggers that tell communities when to act.

Another innovation pertains to what Oxfam has already been doing — the innovation that allows digitalfinancial services to be available online and accessible in different forms as well. This was inspired by the platform Inclusive and Affordable Financial Facilities for Resilient and DevelopedFilipinos or iAFFORD Project, Oxfam’s award-winning innovation that was first implemented in 2017 to provide individuals from vulnerable communities a platform for savings, remittance, payments, and even insurance.

With B-READY, these financial services are linked to the parametric index. The system is designed such thatwhen a trigger for release emerges, money is immediately released digitally. “This prepares the community better. This is the proof of concept of B-READY,” says Abogado.

The value of cash

While Republic Act (RA) 10121 or the “Philippine Disaster Risk Reduction and Management Act of 2010” devolves the Disaster Risk Reduction (DRR) function to local governments, auditing rules prevent them fromdisbursing cash prior to any disaster. A disaster’s effects have to be seen and measured before any cash canbe released. While local governments are allowed to purchase and preposition goods prior to a disaster, experience from the many disasters that have hit the country has identified cash in hand as a critical factorfor household level preparedness.

The local government has a list of protocols on what can be released 24, 36, or 48 hours before a predicted disaster strikes, and buys food stocks as the usual preparation. “In Oxfam’s studies, food is not the only need during a crisis or in evacuation. There are multiple and varying needs such as WASH (water, sanitation, and hygiene), dignity kits, protection of assets, and livelihood,” Abogado notes.

“The best way to respond to those needs is still cash because it gives people choice. Providing access toresources in the form of cash also gives women the economic leverage to protect themselves when there is risk of gender-based violence (GBV) in households,” she adds.

Moving forward

For B-READY’s implementation in Salcedo municipality, the focus was on typhoons. Typhoons hit the country 21 to 24 times each year and have the most impact on vulnerable communities. Of this number, five are usually destructive.

The selection criteria for the project area listed, among others, that the area must be in the typhoon path, isgeographically exposed and vulnerable, has experienced STY Haiyan, and has a receptive local government. Onthis basis, nine barangays in Salcedo participated in the pilot project.

From scientific to popular language

Translating scientific language into something that community members could easily understand was achallenge. The first metrics formed were numerical and could be understood by humanitarian organizations, but not by the general public. Being the main user of the parametric index, the local government unit (LGU) also had to read the policy language. To adjust, the numbers were converted to the same signals used by PAGASA, which local governments have been accustomed to. Redsignals danger, yellow or orange tells them to organize and prepare, while green means risks are still manageable.

People decide

For people to feel ownership, they also had to be involved in the process of data collection, including deciding on the triggers. The triggers and the collective decision-making process helped local stakeholders decide faster.

Ensuring alignment

The funds were managed by the People’s Disaster Risk Reduction Network (PDRRN), a long-time Oxfampartner. When a different entity manages the funds and another decides on the triggers, the two entities have to be aligned in order to make the program useful and easier for people to access. Even if Salcedo municipalityalready had some experience with Oxfam’s innovations, the learning process started anew given the new elements.

Data limit

There was difficulty building the triggers because of the required historical information. Instead of getting100 years of historical information, the program could only trace 60 years back. As government data is still manually produced and not readily accessible online, Oxfamcovered the services of people hired to retrieve information going back to 60 years of extreme weatherevents in the Guiuan municipality and Eastern Visayas region and to encode data from printed files retrievedfrom physical archives.

Taking time for preparations

Priming the community to understand preparedness and the local government to activate the system took time. Global Parametrics (a pioneer in the use of global data sets to create indices for risk transfer) also needed time to design the EWS. During the strong typhoons of 2019, the parametric index was not yet in place. When Typhoon Phanfone (local name: Ursula) wreaked havoc on Christmas Eve of 2019, the local government used PAGASA forecast information.

A preparedness meeting was conducted, but cash was released only after the disaster had already struck.Equipped with awareness and a strong sense of ownership of the program, residents evacuated on time. More than 90 percent of the 2,000 households participated in the evacuation. When the money was released, residents used the cash to repair their houses.

By February 2021, when Tropical Storm Dujuan (local name: Auring) hit, local policy was already installed, triggers had been developed, and community drills had been conducted per barangay. The system functioned;pre-emptive cash was paid out. “Local government’s confidence in the program increased. When local government is able to In addition to governmentfunds, Abogado thinks that “private financial service institutions should be encouraged to introduce financial tools and windows such as pre-disaster loans and insurance. They can perhaps lend money so that affected families can buy food, or farmers can hire people to save their harvest,” she says.

On the downside, local government was not able to allocate money because RA 10121 allows the prepositioning only of commodities and goods, not cash. Thus, even if a local policy is in place, local governments cannot useDRR funds for allocating cash.

B-READY will have to address this challenge as part of addressing policy barriers in the scale- up for the second phase of the project.

Encouraging business

While the government’s Internal Revenue Allocation (IRA) is a source of funds, Abogado thinks that financialinstitutions should also be encouraged to introduce financial tools and windows such as pre-disaster loans and insurance. “For instance, loans can be extended to enable people to purchase food or even to hire additional labor to save their harvests,” she says.

Oxfam has previously conducted a study on disaster risk financing, which came up with a radical finding – the potential strategic role of pay-out insurance before a disaster happens. However, this scheme has a policy and business design barrier. Insurance companies argue that the model of insurance is to help the insured recover based on the impact of the damage.

If a pay-out is to be made before a typhoon hits, the problem is how the pay-out will be computed.

“Our counter-argument is to use forecast information on the incoming impact of the typhoon. ParametricIndex becomes the basis for releasing insurance premium. We are advocating for a certain percentage to bereleased before a disaster strikes,” Abogado stresses.

Approval also needs to be sought from the Insurance Commission and the Department of Finance as regulatory agencies. “We are bringing this challenge to the next phase,” Abogado concludes.

The coming phase will scale up the B-READY program scaled up to the national level. Apart from typhoons,flooding will also be covered by the parametric model. Further into the future, all major hazards in the Philippines will be included.



The Building Resilient, Adaptive, and Disaster-Ready Communities (B-READY) Project is a two-year pilot project that aims to better protect vulnerablehouseholds from natural disasters through a pre-disaster cash transfer program using two innovations: first, the use of digital weather forecasting and risk modeling technologies as part of the local communities’ early warning systems (EWS) and trigger mechanisms for early response; and second, the use of financial services provision technologies and a local financial ecosystem that would allow for safe and secure pre-disaster cash transfer programming.

The B-READY project was a collaboration of a consortium of partners, namely: Local Government of Salcedo, Eastern Samar; People’s Disaster Risk Reduction Network; PayMaya Philippines; Global Parametrics; and Plan International. Over the past two years, the project reached almost 9,300 individuals in nine barangays (villages) in Salcedo with access to digital financial services, literacy trainings, and pre-disaster cash grants for two devastating typhoons; supported theaccreditation of 17 community-based cash agents for disbursement of cash grants; jointly developed and tested the triggers of typhoon parametric index; strengthened safeguarding mechanisms during emergencies; and facilitated local government adoption of a resolution for using parametric index as part of disaster EWS.