RP gets $258.64-million World Bank loan package

MANILA, Philippines - The World Bank has extended an assistance package worth a total $258.64 million to the Philippines “to support the country’s recovery and reconstruction from the recent natural disasters as well as its capability to manage toxic chemicals that threaten people’s health and the environment.”

Bulk of the total amount at $250 million is under the World Bank’s Philippine Development Policy Operation (DPO): Supplemental Support for Post-Typhoon Recovery designed to cushion the economic and social impacts of the destructive typhoons Ondoy and Pepeng that battered the country in late 2009.

It is a quick disbursing loan that can be used by the National Government to speed up reconstruction efforts.

The second is a $8.64-million grant to support the Integrated Organic Pollutants Management Project (IPOP) aimed at reducing human and environmental exposure to harmful persistent organic pollutants (POPs) such as furans and dioxins that are known to cause cancer.

The supplemental financing is part of the social protection measures and programs outlined in the original Food Crisis Response DPO approved by the World Bank Board in Dec. 17, 2008. The DPO was designed to enhance policy coordination and institutional arrangements for social protection, improve targeting of poor households, and deepen the impact and efficiency of social safety nets through a conditional cash transfer (CCT) program.

The World Bank has extended support in the development of a targeting system and its CCT program since 2007.  In Nov. 17, 2009, the World Bank also approved a $405-million loan to support the CCT and strengthen the Department of Social Welfare and Development (DSWD) as a social protection agency.

World Bank country director Bert Hofman said the newly approved loan is part of a financing package that was agreed last December with development partners, and was designed to help the Philippines address reconstruction needs following the natural disasters that hit the country.

“The loan will support the government’s reconstruction plan and will help overall growth and poverty alleviation,” Hofman said. An earlier report, the Post-Disaster Needs Assessment (PDNA), estimated that damage and losses from the two major typhoons in 2009 amounted to about $4.38 billion, with associated losses in production and other flows of the economy placed at nearly $2.93 billion. These associated changes in economic flows were projected to last beyond 2010.

The assessment also pointed to total requirements of about $2.4 billion for recovery and reconstruction efforts to be undertaken by the public sector through 2012.

Larger investments, particularly in flood control and housing, may need to be considered in the longer term. The support for post-disaster reconstruction is part of a broader initiative for disaster risk reduction and management in the Philippines that the World Bank is supporting. 

The reconstruction and recovery project is part of the global effort under the Stockholm Convention to phase out use and reduce emission of toxic compounds. Of the various sources pollutants in the Philippines, POPs are of particular concern because they remain in the environment for long periods, can be transported over long distances, and accumulate in body tissue through the food chain, causing severe health problems among people.

The grant, which will come from the Global Environment Facility Trust Fund, is designed to strengthen the country’s regulatory and monitoring framework for managing toxic chemicals including polychlorinated biphenyls or PCBs found predominantly in electrical transformers. It also aims to reduce releases of unintentionally produced POPs coming mostly from open burning of waste, as well as lessen human exposure to land, soil, or groundwater contaminated by POPs.