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COVID-19 CRISIS

Philippines adds $500-M agreement with World Bank to growing list of loans

By JON VIKTOR D. CABUENAS,GMA News

The Philippines this week inked another accord with the World Bank, adding $500-million to the growing list of loans to finance its war chest against the coronavirus disease.

Signed on Wednesday, June 3, 2020, the Department of Finance (DOF) said the loan will support efforts to ease the social and economic impact of COVID-19 on poor households and workers of micro, small, and medium enterprises (MSMEs).

The loan will cover a maturity period of 29 years, inclusive of a grace period of 10.5 years, and is targeted for accelerated disbursement by the third week of June.

The approval of the Emergency COVID-19 Response Development Policy Loan (ECRDPL), the DOF said, signifies the "strong confidence" of the international community in the Philippines' capacity to meet the funding needed.

"This is the third loan accord that we have signed with the World Bank that is designed to assist us in swiftly responding to the challenges brought about by the COVID-19 emergency," said Finance Secretary Carlos Dominguez III.

"The World Bank has always been our reliable partner in strengthening our country’s economic resilience," he added.

To recall, the Philippines and the World Bank already earlier inked two loan agreements -- a $500-million loan a $100-million loan -- in April, both for COVID funding.

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The latest loan will also be added to the national government's outstanding debt, which widened to a record P8.6 trillion as of end-April.

"We once again thank the World Bank for its prompt action on this financial support package that will help us to promptly provide relief to poor and low-income households and employees of MSMEs who lack the means to fend for themselves during the lockdowns implemented nationwide to contain the spread of COVID-19," said Dominguez.

According to the latest data available from the DTI, 99.52% of the total 1.003 million business establishments in the country as of 2018 were micro, small, and medium enterprises (MSMEs).

Micro enterprises are defined as those with total assets worth less than P50,000; cottage enterprises with assets worth P50,001 to P500,000; small with P500,001 to P5 million; and medium from over P5 million to P20 million. — RSJ, GMA News