World Bank extends fresh $500-M loan to Philippines' COVID-19 fight
MANILA, Philippines — The World Bank has added to the Philippines’ fund pool to counter the impact of the coronavirus disease-2019 (COVID-19) on the economy after the agency approved a $500-million loan to the government.
In a statement, the Washington-based lender said the amount is a “risk management development policy loan,” which is primarily intended to help member countries cope with natural disasters, but can otherwise be used for other purposes.
In this case, Manila’s latest loan, apart from strengthening disaster resiliency, is targeted to “also support the urgent needs created by the COVID-19 crisis,” the lender said.
“Natural disasters and pandemics disproportionately hurt poor families and communities. Enhancing risk management and the capacity to address these challenges can help ensure that the Philippines can sustain progress in poverty reduction,” Achim Fock World Bank’s acting country director, said in the statement.
The loan will be handed on a single tranche and payable for 29 years, with additional grace period of 10 and a half years. It will be charged an interest, although information on charges remain unclear.
Loan negotiations started as early as February, shortly after the Taal Volcano erupted in late January.
This marked the third time the government tapped this type of financing from the World Bank, after 2012 and 2015. The last availment in 2015 was partly used to fund the reconstruction of areas damaged by typhoon Yolanda late in 2013.
According to the World Bank, the new loan will also support key programs in disaster rehabilitation for both national and local governments. Planning and analysis for upcoming disasters can also be funded, including strengthening foundations of government buildings.
The funds may also finance cash subsidies to the poor.
“The World Bank has expressed its solidarity with the people of the Philippines and is working closely with the authorities to support action to address the unfolding COVID-19 emergency through financial support and just-in-time technical assistance,” the lender said.
The latest cash from the World Bank comes on top of its $100-million loan to the health department last month for COVID-19 response. The loans form part of the agency’s $14-billion “fast-track package” for developing countries fighting the global pandemic.
The credit will also form part of the P1.1 trillion the Duterte government is currently raising to fund COVID-19 contingency programs. Excluding the latest World Bank loan, the sources of a total of P625.39 billion had been identified, including bond issuances and loans.
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