WB approves $500-M credit line for PHL disaster risk mamagement

The World Bank on Wednesday approved a $500-million credit line for the Philippines to manage risks posed by natural disasters, which the country may dip in to following a presidential declaration of a state of calamity.

The country may dip into the credit line following a presidential declaration of a state of calamity.

World Bank country director Motoo Konishi said the new credit line signifies the bank's recognition of the Philippines' comprehensive efforts to strengthen the country's capacity for managing disaster risks.

"If not managed well, disasters can roll back year of development gains and plunge millions of people into poverty," Konishi said.

The credit line or the Second Disaster Risk Management Development Policy Loan with a Catastrophe Deferred Drawdown Option (CAT-DDO 2) will make available $500 million to "strengthen investment planning and regulations to reduce disaster risks and help manage the financial impacts brought about by calamities.

"CAT-DDO 2 gives the Philippines flexibility to use the funds as needed," according to the bank.

It will have a drawdown period of three years and will be renewable up to four times for 15 years.

First in Asia

"Amounts repaid during the drawdown period are available for subsequent withdrawal," the bank said.

The Philippines was the first country in the Asia and Pacific region to use this type of financing option under the CAT-DDO in 2011.

"This second CAT-DDO will provide the government with a platform for sustaining reforms and effectively implementing the country's disaster risk reduction and management program," it said.

"The Philippines is among the most vulnerable countries in the world. Together, the 20 most vulnerable countries face escalating losses of $44.9 billion due to climate-related natural disasters alone," Finance Secretary Cesar V. Purisima said in the same statement.

"With the number set to multiply almost tenfold by 2030, amounting to $418 billion, we turn to innovative financing mechanisms to boost our resilience," he added.

World Bank data shows that more than 1,000 lives on average are lost in the Philippines every year due to natural calamities.

Of this number, typhoons account for 74 percent. Typhoons also account for 62 percent of total  damages and 70 percent of agricultural damages.

The country is also highly exposed to geologic hazards including earthquakes and volcanic eruptions, the bank noted.

"Disasters can induce and exacerbate poverty through the loss of lives, destruction of assets, disruption of economic activities and trade, and indirect impacts on health, mobility, gender equality, and access to education," Konishi said. – Jon Viktor Cabuenas/VS, GMA News