The World Bank has approved a fresh $600 million loan that aims to support the Philippines’ economic recovery from the coronavirus pandemic.
In a statement, the Washington-based multilateral institution said it approved the financing for the government’s reform program to position the country for a more competitive and resilient economic recovery. The sub-program development policy loan supports ongoing government reforms, among them the amendments to retail liberalization act.
The new law aims to promote private investment, reduce the cost of doing business, and expand broadband services to promote investments in information and communications technology.
Ndiamé Diop, World Bank country director for the Philippines, said these reforms are crucial for addressing immediate and long-term barriers to growth, paving the way for inclusive recovery.
“Reforms that promote competition in broadband and mobile telecommunications will benefit a large portion of underserved populations by increasing coverage and quality of service, increasing their access to markets, as well as access to remote education and health services,” Diop said.
Internet access has been essential during the pandemic as employed individuals have shifted to home-based work and school-aged children have relied on distance learning.
“Similarly, reforms that lower the costs of trade and improve the business environment are expected to benefit all firms but especially small and medium enterprises, which will have access to a larger market for their products and services,” Diop added.
The Philippines lags behind its peers in the East Asia and the Pacific Region in terms of inflows in direct foreign investment, including in its retail sector.
Reforms in the retail trade sector is expected to promote investments by leveling the playing field between domestic and foreign operators, thus generating employment, widening consumer choices, and increasing the inflow of new technologies.
This new lending is a development policy loan (DPL) which provides quick-disbursing assistance to countries undertaking reforms.
DPLs typically support policy and institutional changes needed to create an environment conducive to sustained and equitable growth as defined by borrower-countries’ own development agenda.
Support for increasing resilience of communities through better digital infrastructure is also part of this new lending program.
“The government has introduced the Philippine Identification System or PhilSys as a digital identification platform to foster the digital economy and increase access to public services,” Rong Qian, World Bank senior economist said.
“This is expected to increase access to and improve delivery of public services by providing Filipinos with a unique, verifiable digital identity,” Qian added.
Filipinos can use this foundational ID for key public and private transactions, including opening bank accounts, identifying, and verifying social assistance beneficiaries, and making pension payments by 2022, Qian added.