World Bank loans $500 million to PH for coronavirus response

MANILA, Philippines (UPDATED) – The World Bank and the Department of Finance signed over the weekend a $500-million (P25.2-billion) loan to the Philippines to boost the country's coronavirus pandemic response.

Finance Secretary Carlos Dominguez III, on behalf of the Philippine government, and Achim Fock, the World Bank acting country director for Brunei, Malaysia, Philippines, and Thailand, signed the Third Risk Management Development Policy Loan, which aims to support programs that improve disaster response and rehabilitation.

The loan will be paid by the Philippine government in 29 years and has a grace period of 10.5 years. The interest rate was not mentioned in the World Bank website.

Dominguez said this 3rd budget-support loan is programmed for accelerated disbursement by April 30.

This is the country's 3rd time to avail of the financing program from the World Bank. The Philippines previously tapped the facility to reconstruct areas damaged by Super Typhoon Yolanda (Haiyan) in 2013.

The World Bank said the amount may be used for the following:

"The World Bank is committed to supporting efforts to strengthen the Philippines' capacity to prepare for and respond to natural disasters as well as health and economic shocks like COVID-19," said Fock.

"This $500-million facility, which is just one of several financial assistance programs made available to the Philippines by the World Bank during this global health crisis, bolsters the Duterte administration's overall efforts to provide instant relief to the poor and other hardest-hit sectors, and strengthen our health care system," Dominguez said.

The latest funding is on top of the $100-million "fast track COVID-19 facility" secured last March. (READ: Worst-case scenario: PH economy may contract 0.5%, says World Bank)

The government needs cold cash immediately to address the pandemic. President Rodrigo Duterte has urged Finance Secretary Carlos Dominguez III to produce money at all costs. (READ: What we know so far: Funding the fight vs coronavirus)

Think tank Ibon Foundation earlier said there is no need for loans, as the government can cancel some infrastructure projects and reallocate the funds toward coronavirus response. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

image