30 Sep Philippines eyes $500-million disaster loan from World Bank
THE PHILIPPINE government has tapped the World Bank for a $500-million loan to boost the country’s resilience against natural disasters and help it contain a coronavirus pandemic.
A World Bank document showed the proposed loan program will be its fourth for the government’s disaster risk management initiatives that allows a so-called deferred drawdown option.
Under the plan, funds are only released when a disaster strikes or a national calamity is declared to help with rehabilitation efforts, Finance Undersecretary Mark Dennis Y.C. Joven said in a text message on Thursday.
The multilateral bank’s board is expected to act on the proposal on Nov. 16.
“The development objective is to strengthen the government of the Philippines’ institutional and financial capacity to manage risks from climate change, natural disasters and disease outbreaks,” it said.
The program is also expected to help with the state’s poverty reduction efforts. About a million poor Filipinos are affected by natural calamities each year, according to World Bank estimates.
“Many of them reside in disaster-prone provinces on the eastern edge of the country and are also working in the agriculture and fishery sectors, which are highly vulnerable to climate change and natural disasters,” it said. “The COVID-19 pandemic has worsened the situation.”
The loan will support programs that institutionalize disaster recovery plans for local communities to fast-track rehabilitation, improve disaster risk management information drive and include climate change impacts on investment planning.
This will ensure that local governments have rehabilitation plans in place when they tap the disaster fund to hasten recovery efforts and ease the impact of natural disasters on communities, especially poor households.
“Improved availability, access and use of baseline data are also expected to help the affected communities to be better prepared and resilient from these shocks,” it said.
While the government has “established a good track record of delivering results,” the World Bank said there are risks to the program. A prolonged coronavirus pandemic could delay economic rebound and worsen fiscal space further, it pointed out.
The lender also warned of substantial political and governance risks despite efforts to roll out reforms to improve the country’s disaster resilience in the past decade.
“The national and local elections in May 2022 may slow down the pace of implementation of policy reforms proposed under this [loan program],” it said.
The World Bank said the country remained highly vulnerable to natural disasters, making it the ninth most-exposed nation in the world to extreme typhoons.
It said 60% of the country’s total land area and 74% of Filipinos are exposed to risks from natural hazards such as typhoons, earthquakes, floods, tsunamis, volcanic eruptions and landslides, which have been worsened by climate change.
Mr. Joven said the government had taken out three similar credit lines from the World Bank, the last one in April 2020 worth $500 million.
The first two loans for disaster resilience were issued in September 2011 and in December 2015 worth $500 million each. — Beatrice M. Laforga