DOF: PH to borrow P4B from WB for Odette response | Inquirer Business
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DOF: PH to borrow P4B from WB for Odette response

By: - Reporter / @bendeveraINQ
/ 05:04 PM December 23, 2021

MANILA, Philippines—The government would tap a P4 billion facility from the World Bank’s $500 million quick-disbursing credit line to bring aid and help rehabilitate areas flattened by Super Typhoon Odette, according to the Department of Finance (DOF) on Thursday (Dec. 23).

The DOF announcement came two days after President Rodrigo Duterte, in a televised talk to the nation, said the government has run out of funds for aid and rehabilitation in Odette’s wake because of the strain on finances caused by COVID response.

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Duterte’s statement, however, was clarified by Palace spokesperson Karlo Nograles who said the President didn’t mean it that way.

Aside from the amount to be drawn from the fourth disaster risk management development policy loan with a catastrophe-deferred drawdown option (CAT-DDO 4) approved by the World Bank last month, the Department of Budget and Management (DBM) will also release P1 billion to local government units (LGUs) worst hit by Odette, Finance Secretary Carlos Dominguez III told reporters.

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Odette made landfall nine times in different Philippine regions carrying winds of up to 260 kph. The first landfall happened on Dec. 16.

Citing a message from DBM officer-in-charge Tina Rose Marie Canda, Dominguez said the money to be charged to the contingent fund will be released on Thursday or Friday (Dec. 24) at the latest, upon instruction of Executive Secretary Salvador Medialdea.

The DBM was currently computing the allocation or share of each LGU affected by Odette, Canda told Dominguez.

In a statement, the DOF quoted Dominguez as saying that “this week, the DOF will draw $80 million from the World Bank disaster financing loan to fund the amount with cover in the 2021 budget.” The amount is around 4 billion in Philippine peso.

“The Philippine government will draw another $120 million [about P6 billion] from the same World Bank standby loan facility in the first week of January when the loan cover will be available in the 2022 national budget,” Dominguez said.

The total of $200 million—or about P10 billion—to be drawn this month and next month was based on financing requirements as determined by the national government’s assessment of the damage wrought by Odette.

The Philippines will be able to draw from the CAT-DDO 4 facility following Duterte’s declaration of a state of calamity in the regions of Mimaropa, Western Visayas, Central Visayas, Eastern Visayas, Northern Mindanao, and Caraga. The state of calamity declaration would last for a year starting on Dec. 21, 2021.

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The World Bank loan was already in effect since it was signed with the Philippine government last Nov. 29. The financing facility had an available balance of $497.5 million, which was net of a 0.5-percent front-end fee, the DOF said.

The Philippines already benefited from World Bank loans with CAT-DDOs in 2011 and 2015, both amounting to $500 million. The first CAT-DDO extended by the World Bank 10 years ago was the first of its kind liquidity facility in Asia-Pacific.

The CAT-DDO 2 loan that the World Bank approved in 2015, meanwhile, released $496.25 million to the government in 2018 to rehabilitate the areas flattened by Typhoon Ompong in Luzon back then.

In another statement, the DOF said Dominguez also ordered 24/7 processing of donors’ tax- and duty-exemptions for imported goods intended for Odette survivors.

“Upon the request of Finance Undersecretary Antonette Tionko, Dominguez tasked several officials and personnel of the revenue office of the DOF to be deployed and work in shifts on a 24-hour period to speed up the processing of tax exemption indorsements (TEIs) and the quick release of importations of donated relief consignments expected to come from various foreign governments and international organizations or institutions,” the DOF said.

“Appropriate government agencies such as the departments of Social Welfare and Development (DSWD), of Foreign Affairs (DFA), and of Health (DOH), and the Office of Civil Defense (OCD) may apply for TEIs that grant tax and duty exemptions to importations under relief consignment in the Bureau of Customs (BOC),” it said.

“Local government units (LGUs) as well as private or non-government organizations (NGOs) duly-registered, licensed or accredited by the appropriate government agencies may also apply for TEIs,” the DOF added.

The DOF said covered by the tax- and import duty-exemption were relief consignments like food, medicine and equipment and materials to build shelter to be distributed for free to those by affected the typhoon.

Vehicles and other transportation means donated or leased for rescue and relief operations by both the government and the private sector would get the same tax perks.

Also, Dominguez said the Bureau of Internal Revenue (BIR) was expected to issue regulations related to the President’s declaration of a state of calamity, in particular to extend tax deadlines as a form of relief to corporate and personal taxpayers in areas badly hit by Odette.

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TAGS: Carlos Dominguez III, Department of Budget and Management, Department of Finance, new loan, odetteph, Typhoon Odette, World Bank
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