The Philippines will benefit from the World Bank’s (WB) standby credit line worth $500 million (or about P28 billion) to help the government rapidly respond to disasters and climate threats, Finance Secretary Benjamin Diokno said Tuesday.
“The drawdown feature is particularly helpful as it allows the quick disbursement of funds upon the declaration of a state of calamity by the President, providing the government immediate liquidity to rapidly deliver crucial services – such as healthcare, shelter, and food, in times of emergency,” Diokno said.
The WB’s board of executive directors approved on Nov. 16, 2023 the policy loan.
The WB’s lending arm, the International Bank for Reconstruction and Development (IBRD), will finance the Philippines Disaster Risk Management and Climate Development Policy Loan with a Catastrophe Deferred Drawdown Option that the Philippine government can immediately draw upon in times of natural disasters and health crises, mitigating their impact on the economy.
The funds can be disbursed when the President declares a state of calamity in response to a natural disaster or public health emergency.
The full amount will be available for three years, allowing the government immediate access to the funds to better manage the cost of shocks and protect vulnerable sectors. It has a revolving feature, as well as a three-year drawdown period which may be renewed up to four times, for a total maximum period of 15 years.