ADB OKs $1 billion loan for labor, disaster plans

MANILA, Philippines —  The Asian Development Bank (ADB) has approved a $1 billion policy-based loan to support the Philippine government’s efforts to improve the employability of the workforce and  strengthen disaster resilience and response.

In a statement, the multilateral lender said it has approved a $500-million loan for the Business and Employment Recovery Program – Subprogram 2, which will assist the Philippines in pursuing reforms and initiatives to equip the country’s workforce with the necessary skills to meet the evolving requirements of the industry.

At the same time, the bank also approved a $500-million policy-based loan for the Second Disaster Resilience Improvement Program, which will provide the Philippines quick access to financing when the country is hit by disasters due to natural hazards or health-related emergencies.

ADB said the business and employment program  aims to increase women’s participation in the workforce through technical and vocational education and training (TVET) and improved access to livelihood and employment opportunities through government job facilitation programs.

Under the program, the government aims to increase formal employment in the private sector by an average of 600,000 to 700,000 jobs per year, as well as increase the share of private sector jobs to total employment to 51 percent against 49 percent in 2019 or prior to the COVID-19 pandemic, which led to massive job losses.

The program also aims to provide skills training for 5,000 workers, including those displaced during the pandemic, through private sector-led programs.

In addition, the government wants to raise the number of job placements through public employment service offices in local government units (LGUs) across the country by 120,000 annually.

The government also wants to expand the number of LGUs implementing the JobStart Philippines skills training program for the youth not in education, employment or training.

In the past, the ADB has supported the government’s labor market reforms and initiatives through the Facilitating Youth School-to-Work Transition Program, which aimed to help increase the income earning ability of the Filipino youth.

Meanwhile, the   disaster resilience program   is a multi-year contingent disaster financing program that can be replenished twice, upon the ADB Board’s approval.

Under the program, loan renewals will be allowed if there will be unutilized amounts after the initial five-year period.

The program follows the first Disaster Resilience Improvement Program for the Philippines completed in 2023.

The ADB said the first program has helped strengthen the resilience of institutions and communities, as well as government response to pandemics and natural hazards.

Similar to the first program, the new program will be supporting reforms to increase resilience and enable timely response to disasters in order to minimize the impact on the economy and the people.

Among the aims of the new program is to harmonize disaster risk reduction and management (DRRM) planning processes at the national, provincial and city level, as well as integrate such in national public financial management reforms.

It also aims to enhance disaster response efforts and provide additional sources of risk financing including a voluntary city parametric disaster insurance scheme offering faster payouts for damages from earthquakes, typhoons and other disasters.

“The Philippines is one of the fastest growing economies in Southeast Asia but is at high risk for earthquakes, volcanic eruptions, typhoons, rising sea levels and flooding,”   Ramachandran said.

According to the World Risk Report 2024, the Philippines ranked as the country with the highest overall disaster risk out of 193 economies.