The Philippines will secure two more loans worth a total of $880 million from the World Bank in December to support economic recovery and the agriculture sector amid the COVID-19 pandemic.
World Bank documents showed that the $600-million second Philippines promoting competitiveness and enhancing resilience development policy loan to be implemented by the Department of Finance was scheduled for approval by the Washington-based lender’s board on Dec. 16.
“This proposed development policy loan supports the government of the Philippines’ recovery effort from the social and economic impact of the COVID-19 pandemic while advancing structural reforms on competitiveness and resilience,” the World Bank said.
The World Bank noted that while the Philippines had a “sound macroeconomic framework and strong reform program” prepandemic, the COVID-19 crisis had put the Philippines’ resilience to the test.
For one, the stringent lockdown measures imposed since mid-March slashed firms’ and workers’ incomes, such that the World Bank projected poverty incidence to rise by about 1.9 percentage point this year.
Specifically, the World Bank loan will support policy reforms in agriculture and trade policies, ease of doing business, as well as telecommunications competition and investments.
The loan will also “[enhance] fiscal sustainability through increasing revenue and strengthening fiscal resilience to natural disasters through improved risk management and enhanced response systems, while strengthening social resilience by improving social program delivery and improved access to digital payments,” the World Bank said.
The other loan that is up for World Bank board approval on Dec. 15 will be extended to the Department of Agriculture (DA) for its Philippine Rural Development Project (PRDP).
The $280-million World Bank financing will cover the bulk of the $361.83-million cost of the continuation of the DA’s PRDP, for which the lender also extended a $501.25-million loan in 2014.
“The PRDP aims to increase rural incomes and enhance farm and fishery productivity in the targeted areas by supporting smallholders and fisherfolk to increase their marketable surpluses, and their access to markets,” the World Bank noted.
This additional investment project financing will “scale up PRDP activities to enhance the benefits and impacts of this well-functioning nationwide project and support COVID-19 economic recovery,” the World Bank said.
In particular, the loan will support the DA’s “Plant, Plant, Plant” program as well as assist more local government units in war-torn Midnanao, especially in the newly formed Bangsamoro Autonomous Region in Muslim Mindanao.