MANILA, Philippines — The World Bank has approved a $400-million loan aimed at making the Philippines more resilient to natural calamities.
The Promoting Competitiveness and Enhancing Resilience to Natural Disasters Programmatic Development Policy Loan (DPL) Subprogram 1 was green-lighted by the Washington-based multilateral lender’s board on Dec. 17.
“The program development objective is to support the government of the Philippines in promoting competitiveness; enhancing fiscal sustainability, and strengthening financial resilience to natural disasters and climate change,” the World Bank said.
This World Bank loan has a 19-year maturity, inclusive of a 10-year grace period.
The DPL will be implemented by the Department of Finance (DOF).
While the Philippine economy has been sustaining rapid and “pro-poor” economic growth since 2010, which also contributed to declining poverty incidence, the World Bank had said, “more needs to be done to improve the inclusiveness of growth and enhance resilience to natural disasters.”
“Due to its geographical location, the Philippine archipelago is at high risk to a range of natural disasters, which will worsen with climate change. The Philippines has been identified as the third most vulnerable country in the world to weather-related extreme events and sea-level rise. Main hazards in the Philippines include typhoons, floods, earthquakes, and volcano eruptions,” the World Bank had noted.
Specifically, the World Bank loan will enhance regulation for the private insurance market against natural disasters; increase the efficiency of post-disaster financing by expanding the government’s risk-layering strategy; and reduce contingent liabilities by creating and managing a public asset registry.
In terms of promoting competitiveness, the loan extended by the World Bank will “support the government in ensuring food security and stable prices by liberalizing the importation of rice; simplifying ease of doing business (EODB) by streamlining government procedures; and increasing access to economic opportunities through the creation of a foundational ID and better payment systems.”
The loan will also enhance fiscal sustainability by “improving budget planning and financial management; increasing revenue mobilization; and reducing fiscal risks of government-owned and -controlled corporations (GOCCs).”
In 2020, the Philippines would secure two more World Bank loans aimed at enhancing the country’s preparedness and resilience to natural disasters, including $400 million for Promoting Competitiveness and Improving Resilience to Natural Disasters 1, and $500 million for Third Disaster Risk Management Development Policy Loan with a Catastrophe Deferred Drawdown Option (CAT-DDO), the 2020-2023 World Bank Group-Philippines Country Partnership Framework showed.
For 2021 to 2022, Promoting Competitiveness and Improving Resilience to Natural Disasters 2 and 3 will both be extended DPLs worth $400 million each.
In all, the World Bank will lend the Philippines up to $4.42 billion during the next three years—$1.34 billion in 2020, and $2.88-3.08 billion from 2021 to 2022.