PH secures $400-M World Bank loan for financial sector reforms

The $400-million development policy loan (DPL) to the Philippines that the World Bank has just approved will make the financial sector in the country resilient from shocks as the economy recovers from the pandemic-induced slump, the Washington-based lender said.

The quick-disbursing financial sector reform development policy financing, which the World Bank board green-lit on June 24 will strengthen financial sector stability, expand financial inclusion across firms and individuals, and promote disaster-risk financing, the lender said in a statement.

“Among the policy reforms supported by this DPL are measures addressing legal, regulatory, and supervisory issues to improve prudential supervision of banks by the Bangko Sentral ng Pilipinas; bringing insurance legislation in the Philippines in line with global standards, and ensuring long-term availability of credit to small and medium enterprises,” the World Bank said.

To expand access to finance by individuals and firms, this DPL supports reforms to promote innovative financial services by harnessing digital technologies and increase the reliability of credit information, it added.

“To catalyze disaster risk and green finance, this DPL supports the efforts of the government and the private sector in establishing public-private partnership (PPP)-based risk pooling mechanisms for catastrophe insurance. It also supports financial sector resilience to climate-related shocks by integrating climate and environmental risks in financial institutions’ risk management frameworks and mobilizing finance for environment-friendly projects,” according to the World Bank.

The Department of Finance will implement this project. —Ben O. de Vera