World Bank releases $496.2-M loan for ‘Ompong’ rehab

HOMELESS. A resident of Battalan village in Lasam town loses his family’s house after typhoon “Ompong” (international name: Mangkhut) battered Cagayan province on Saturday. INQUIRER/RICHARD A. REYES

To aid the government’s reconstruction and rehabilitation efforts in areas devastated by typhoon “Ompong” (international name: Mangkhut) last month, the World Bank (WB) has released the standby $496.25-million loan facility and extended its validity.

“We express our sympathies to all the Filipino people affected. Natural disasters can exacerbate poverty through loss of lives, livelihood, property and infrastructure, and can roll back years of development gains. They disproportionately disrupt the lives of poor and vulnerable people, particularly women, the elderly and children. We want them to know the World Bank supports the country’s efforts to address their needs,” Mara K. Warwick, WB country director for Brunei Darussalam, Malaysia, Philippines and Thailand, said in a statement on Tuesday.

As such, the Washington-based multilateral lender gave access to the contingent credit line approved in 2015 dubbed Second Disaster Risk Management Development Policy Loan with a Catastrophe-Deferred Drawdown Option (Cat-DDO 2), which “will give the Philippine government flexibility to help families and communities recover, reconstruct vital infrastructure (such as roads, bridges, schools and hospitals), and restore basic social services.”

“The Cat-DDO 2 gives the Philippines immediate liquidity to recover from a natural disaster. This instrument also comes with technical assistance to support the government’s disaster risk reduction and management efforts,” the WB explained.

“The program enhances the country’s preparedness for natural disasters in the future, strengthening investment planning and regulations to reduce disaster risks, and help manage the financial impacts of natural disasters,” it added.

The loan was supposed to expire on September 30 this year, but its availability has been extended up to September 30, 2021.

The terms showed that on top of the three-year drawdown period, this loan can be renewed by a maximum of four times during a 15-year period.

The loan facility was activated by President Rodrigo Duterte’s declaration last week of a state of calamity in four Ompong-hit regions in northern Luzon.

Proclamation No. 593 series of 2018 covered Regions 1, 2, and 3 as well as the Cordillera Administrative Region.

“We are getting ready to respond to the possible impact of the calamity on our macroeconomic targets. The declaration of a state of calamity in the affected areas is one measure that will enable the government to use contingent credit lines and mitigate rising inflation,” Socioeconomic Planning Secretary Ernesto M. Pernia said last week. /kga