PHL, World Bank ink $500-M loan deal to augment COVID-19 response capacity

The Philippines and multilateral lender World Bank have signed a $500-million or roughly P25 billion loan agreement that would boost the Duterte administration’s financing capability to respond to the coronavirus disease 2019 (COVID-19) crisis.

In a statement on Wednesday, the Department of Finance (DOF) said the loan accord was inked by Finance Secretary Carlos Dominguez III and World Bank country director for Brunei, Malaysia, Philippines, and Thailand over the weekend.

The $500-million “Third Risk Management Development Policy Loan” aims to strengthen the country’s capacity to prepare for, respond to, and recover from, natural disasters, including health emergencies such as COVID-19 pandemic.

The loan deal was approved by the World Bank last week.

It follows two earlier Risk Management Development Policy Loans in 2012 and 2015 signed between the Philippines and the World Bank.

Dominguez said the third budget-support loan is programmed for accelerated disbursement by April 30, 2020 to help support the immediate financing requirements of the government resulting from the impact of the COVID-induced crisis.

"We thank the World Bank for its swift action on this facility in support of disaster risk management, coming at this critical time when the Philippines, like most other countries worldwide, is struggling to cope with the devastating health, social and economic impacts of the coronavirus pandemic," the Finance chief said.

"This $500-million facility, which is just one of several financial assistance programs made available to the Philippines by the World Bank during this global health crisis, bolsters the Duterte administration's overall efforts to provide instant relief to the poor and other hardest-hit sectors, and strengthen our healthcare system," he added.

The loan is payable in 29 years, inclusive of a 10-and-a-half-year grace period, according to the DOF.

The loan financing also aims to support the adoption and implementation of a unified disaster rehabilitation and recovery planning framework by the national government and local government units (LGUs); the development of multi-year investment plans for seismic risk reduction and retrofitting of important government buildings; and the promotion of integrated hazard and risk analysis in physical planning, and in support of policy development.

On top of the new loan package, the World Bank has also earmarked a $100-million fast-track loan to the Philippines to enable the Department of Health (DOH) to procure personal protective equipment for medical frontliners, along with testing and laboratory materials, quarantine areas, isolation rooms and other essential equipment to fight COVID-19.

The World Bank recently launched a $14-billion fast track facility to strengthen the COVID-19 response in developing countries and shorten the time to recovery. --KBK, GMA News