$80M of $500-M standby loan from World Bank for relief, rehab efforts in Odette-hit areas — DOF

The government will draw $80 million or about P4 billion from the World Bank’s $500-million standby credit line extended to the Philippines to support disaster relief and rehabilitation efforts in provinces devastated by Typhoon Odette, the Department of Finance (DOF) said Thursday.

"This week, the DOF will draw $80 million from the World Bank disaster financing loan to fund the amount with cover in the 2021 budget," Finance Secretary Carlos Dominguez III said in a statement.

The Philippine government will draw another $120 million from the same World Bank standby loan facility in the first week of January, when the loan cover will be available in the 2022 national budget, he said.

The World Bank’s Fourth Disaster Risk Management Development Program with a Catastrophic Deferred Drawdown Option (CAT-DDO4) will provide the government immediate access to funds for its ongoing efforts to aid the recovery of typhoon-hit areas.

The standby loan facility was approved by the World Bank Board on November 17 and the loan agreement for the facility was signed by the lender and the Philippines, represented by the DOF, on November 29.

Net of a 0.5% front-end fee, the CAT-DDO4 has an available balance of $497.5 million as of December this year.

Dominguez said he issued the statement in response to the calls of Senate Minority Leader Franklin Drilon and Senator Juan Edgardo Angara for the government to do a cash sweep of undisbursed funds and savings in the state coffers to provide funds for the relief and reconstruction efforts in Odette-hit areas.

A presidential declaration of a state of calamity or a public health emergency is required to trigger the release of the funds available under the $500-million WB standby loan facility.

President Rodrigo Duterte declared on December 21 a state of calamity in six Odette-battered areas: Regions 4B (Mimaropa–Mindoro, Marinduque, Romblon and Palawan), 6 (Western Visayas), 7 (Central Visayas), 8 (Eastern Visayas), 10 (Northern Mindanao) and 13 (Caraga).

Dominguez said the CAT-DDO4 aims to strengthen the Philippines’ institutional capacity to manage risks from climate change, natural disasters and disease outbreaks.

The CAT-DDO4 forms part of the Philippines’ Disaster Risk Financing Insurance (DRFI) strategy, which aims to maintain sound fiscal health at the national level, develop sustainable financing mechanisms for local government units (LGUs), and reduce the impact on the poorest and most vulnerable. — VBL, GMA News