The national government plans to borrow $500 million to support the relief and recovery efforts for areas impacted by Typhoon Carina, the Department of Finance (DOF) said.
Finance Secretary Ralph G. Recto announced that DOF is preparing to utilize the standby credit line provided to the Philippines by the World Bank, or the Climate Development Policy Loan with a Catastrophe-Deferred Drawdown Option (CAT-DDO5),
This World Bank loan facility offers immediate funds for managing risks resulting from climate change, natural disasters, and disease outbreaks.
“These funds will be immediately withdrawn and released once the President declares a state of calamity,” Recto said in a statement on Wednesday, July 24.
“This will allow us to rapidly deliver critical services like healthcare, shelter, and food to those affected by typhoon Carina as well as fund post-disaster emergency response, recovery, and reconstruction efforts,” the finance chief added.
A presidential declaration of a state of calamity or a public health emergency is required to trigger the release of the funds under the standby credit facility.
The CAT-DDO5 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.