By Chino S. Leyco
The Philippines has sealed a loan agreement with the World Bank (WB) representing the first tranche of a three-part financing package that aims to further boost the country’s competitiveness and fiscal sustainability while enhancing its resilience to natural disasters and the impact of climate change.
Finance Secretary Carlos G. Dominguez III, on behalf of the Philippine government, and acting Country Director Achim Fock, representing the World Bank, signed the $400-million agreement for the development policy loan on implementing the Promoting Competitiveness and Enhancing Resilience to Natural Disasters Sub-Program 1.
This is a component of a three-part loan package from the World Bank with a total amount of $1.2 billion.
“This financing support very clearly helps drive our general effort to build a resilient and competitive society over the medium term. We thank the World Bank for its confidence in our determination to push forward reforms that will create a strong and inclusive economy for our people,” Dominguez said after the signing ceremony held at the Department of Finance (DOF) headquarters.
Fock said the World Bank is committed to continuing its support to the Philippines’ development agenda.
“My colleagues and I look forward to the continued success of the country’s programs for poverty reduction and inclusive growth. We like to thank the Department of Finance and Secretary Dominguez for his excellent leadership in this important endeavor,” Fock said.
Dominguez said that with this three-tranche loan, the Philippines expects its loan portfolio with the World Bank to increase to between $1.5 billion and $2 billion annually starting next year, which is about thrice times more than the multilateral institution’s average annual lending commitment of $600 million to the country for the past 10 years.
He said the government was able to access such support from the World Bank as a result of the Duterte administration’s sustained policy efforts to improve the country’s global competitiveness, as shown by the Philippines dramatic leap to 95th to its previous 124th ranking in the Ease of Doing Business Report (EODB) of the Bank.
The Ease of Doing Business (EODB) and Efficient Government Services Act, the Rice Tariffication Law (RTL), the Philippine Identification System Act, the National Payment Systems Act, and the Comprehensive Tax Reform Program (CTRP) as well as the government’s initiatives to improve the economy’s financial resilience against natural disasters are also among the factors that led the World Bank to increase its support to the Philippines, Dominguez said.
Fock, meanwhile, noted that the Philippines’ rapid growth has driven down poverty rates, from 26 percent in 2006 to 16.6 percent in 2018.