The government signed a $500-million (P25-billion) loan agreement with the World Bank to augment urgent financing requirements arising from the crisis created by the coronavirus disease 2019 pandemic.
Finance Secretary Carlos Dominguez III and Achim Fock, the World Bank acting country director for Brunei, Malaysia, Philippines and Thailand, signed the agreement on the Third Risk Management Development Policy Loan that aims to strengthen the country’s capacity to prepare for, respond to and recover from natural disasters, including health emergencies like the Covid-19 crisis.
The loan accord, which was signed on April 10, followed two earlier Risk Management Development Policy Loans extended in 2012 and 2015 to the Philippines by the World Bank. The loan is payable in 29 years, inclusive of a 10-and-a-half-year grace period.
Dominguez said the third budget-support loan was programmed for accelerated disbursement by April 30, 2020 to help support the immediate financing requirements of the government resulting from the impact of the COVID-induced crisis.
“We thank the World Bank for its swift action on this facility in support of disaster risk management, coming at this critical time when the Philippines, like most other countries worldwide, is struggling to cope with the devastating health, social and economic impacts of the coronavirus pandemic,” Dominguez said.
“This $500-million facility, which is just one of several financial assistance programs made available to the Philippines by the World Bank during this global health crisis, bolsters the Duterte administration’s overall efforts to provide instant relief to the poor and other hardest-hit sectors, and strengthen our healthcare system,” he said.
Fock said in an earlier statement following the bank’s approval of the loan on April 9 that the bank is committed to supporting efforts to strengthen the Philippines’ capacity to prepare for and respond to natural disasters as well as health and economic shocks.
The loan will support policy reforms undertaken by the Philippine government in the area of disaster risk management, including the implementation of an emergency cash transfer program during times of crises.
The loan also aims to support the adoption and implementation of a unified disaster rehabilitation and recovery planning framework by the national government and local government units; the development of multi-year investment plans for seismic risk reduction and retrofitting of important government buildings; and the promotion of integrated hazard and risk analysis in physical planning, and in support of policy development.
The World Bank said that on top of the financing package, it also earmarked a $100-million fast-track loan to the Philippines to enable the Department of Health to procure personal protective equipment for medical frontliners, along with testing and laboratory materials, quarantine areas, isolation rooms and other essential equipment to fight COVID-19.
The loan is under the World Bank’s recently launched $14-billion Fast Track COVID-19 Facility.
