Technical note on the estimation of infrastructure demand for flood control

This technical note examines the relationship between flood control budgets and the level of flood damage in Japan and the Philippines. The note finds that countries decide on the scale of their flood control investment based on the disaster that had the most impact on the national economy in the past, rather than on the average level of flood damage experienced over time.

Japan and some other countries have turned these disasters from crises into opportunities for expanding this type of investment. Demand for flood control infrastructure in the Philippines is estimated at 32-61 billion USD using multiple regression analysis and the growth of GDP. The note concludes that the investment will pay off, since the asset value in risk areas will increase because of urbanization and economic growth. This estimation shows a continuous rapid increase of the budget. Financing arrangements and strengthening the implementation capacity for flood control are challenges.