World Bank to lend PH $600M for pandemic recovery, climate financing

MANILA — The World Bank awarded a fresh loan program to the Philippines to support the domestic economy’s recovery from the pandemic and improve the resilience of the financial sector.

In a statement on Tuesday, January 31, the Washingtonbased lender granted the country a $600-million loan. Aside from supporting the Philippine economy’s recovery from the pandemic, this new loan financing is aimed at supporting three policy reform areas: the stability of the financial sector, improving financial inclusion for Filipinos and businesses, and climate and disaster risk finance.

“Policy actions that strengthen the stability of the financial sector – including banks and insurance companies –will help Filipino families, businesses, and investors withstand financial shocks and enhance their resilience by ensuring that problems in these financial institutions are detected at an early stage without severe disruptions to the economy,” said

Ndiamé Diop, World Bank country director for Brunei, Malaysia, Philippines and Thailand.

The Philippine economy took a hit at the onset of the pandemic. The economy sank to lows unseen since World War II as the Duterte administration imposed mobility restrictions to prevent the spread of the virus.

Catastrophe insurance

As it is, the World Bank noted that the new loan program will aid the development of the country’s catastrophe insurance market.

This relatively-new financial instrument could prevent the public from sliding into poverty if natural disasters strike. As it is, catastrophe insurance products are designed to protect households, assets, and businesses against natural disasters.

The Southeast Asian archipelago sits within the Pacific Ring of Fire, which leaves the Philippines vulnerable to a host of natural disasters annually. Likewise, the developing