The Philippines has secured fresh contingent funds from the World Bank to strengthen the country’s institutional and financial capacity in managing risks from disasters and disease outbreaks.
In a statement, the Washington-based multilateral institution said on Thursday, Nov. 18, that it earmarked $500 million for the Philippines, which the government can quickly tap to manage climate change, natural disasters, and disease outbreaks.
The new credit line is the Philippines’ fourth disaster risk management development policy loan with a catastrophe-deferred drawdown option (CAT-DDO 4).
Ndiamé Diop, World Bank Philippines country director said the contingent fund will protect the government’s fiscal health following natural disasters and disease outbreaks.
It also helps the Philippines develop sustainable risk financing mechanisms for local government units (LGUs), and cushions poor and vulnerable households from the impact of disasters, Diop said.
“If not managed well, these shocks can exacerbate poverty through the loss of lives, destruction of assets, disruption of economic activities and trade, and indirect impacts on health, mobility, and access to education,” Diop noted.
The Philippine can access the new World Bank funds upon the declaration of a state of calamity due to an imminent or occurring natural catastrophe or a declaration of a state of public health emergency.
“The full amount of the loan is available for three years after effectiveness of this project. This gives the government access to immediate liquidity to better manage the cost of shocks and protect the Filipino population,” World Bank said.
The government can also renew the credit line with the World Bank for up to a total period of 15 years.
World Bank said the new lending supports on-going government efforts to strengthen disaster response and recovery policies and planning, including mainstreaming the use of pre-approved disaster rehabilitation and recovery plans.
The CAT-DDO4 also supports government efforts to integrate climate risk management in the preparation of provincial commodity investment plans among LGUs, which can lessen the extent of agricultural and fisheries damage resulting from natural hazards and extreme weather events.