The World Bank (WB) has approved a $500-million credit line for the Philippine government, intended to help minimize the impact of major natural disasters and health crises on the domestic economy and on the country’s long-term development.
In particular, the facility dubbed “Philippines Disaster Risk Management and Climate Development Policy Loan with a Catastrophe Deferred Drawdown Option” is focused on protecting schools, health facilities and human settlements.
The multilateral lender noted that three-fifths of the country’s total land area and about three-fourths or 74 percent of the population are vulnerable to multiple hazards including typhoons, landslides, floods, storm surges, droughts, volcanic eruptions and earthquakes.
These natural disasters make life harder for many families— or worse push some into poverty —considering that these occurrences regularly damage infrastructure, disrupt the delivery of essential education and health services, and destroy homes and personal belongings.
Also, nearly four-fifths (78 percent) of public schools and almost all (96 percent) of students in the Philippines are exposed and vulnerable to multiple hazards.
Through this credit line, the Philippine government can quickly draw funds when such calamities and health emergencies hit.
The funds may be accessed when the President of the country declares a state of calamity in response to a natural disaster or public health emergency, in line with the Disaster Risk Reduction and Management Act of 2010.
Three years
The full amount, $500 million, will be available for three years, giving the government immediate access to funds when needed, enabling it to better manage the cost of shocks and protect the population.
In addition, this financial support has a revolving feature —the three-year drawdown period may be renewed up to four times, for a total maximum period of 15 years.
Ndiamé Diop, the World Bank’s country director for the Philippines, said in a statement the new fund was about making sure that the people who have the least are taken care of and can bounce back immediately after these disaster events.
“The real benefit of this support is its ability to rapidly deliver crucial services—such as health care, shelter, and food—to those most impacted by disasters or climate events,” Diop said.
Further, the World Bank noted that between 2021 and 2023, around 4,000 schools were damaged due to various disasters, disrupting the continuity of learning for two million children.
Diop added that the financing is not just about responding to disasters, but also about preparing for them in advance to mitigate their impact.
Lesley Cordero, senior disaster risk management specialist at the World Bank, said that the reforms that this new financial instrument supports are key in making sure places where people learn, live and take care of their health are built with climate and disaster challenges in mind.