The Asian Development Bank (ADB) has approved a $500 million loan to give the Philippines quick access to emergency financing during disasters triggered by natural hazards or public health emergencies that result in a declaration of a state of calamity, the multilateral agency said in a statement yesterday.
“The Philippines has been hit by several major disasters in recent years, including Typhoon Haiyan in 2013, the Taal Volcano eruption in January 2020, and the ongoing coronavirus disease (COVID-19) pandemic,” Ahmed Saeed, ADB vice president, said.
“This new contingent disaster financing instrument will help the government manage fiscal risks posed by those shocks and lessen the economic and social impacts on people’s livelihoods and the country’s economy,” he added.
The bank pointed out that disasters cost the Philippines 0.7 percent to 1 percent of gross domestic product every year, including about P43.5 billion caused by earthquakes and around P133 billion from typhoons.
“The Disaster Resilience Improvement Program will support government policy reforms aimed at ensuring the government can quickly address the needs of vulnerable segments of the population following disasters. It will also strengthen the Philippines’ overall response to disasters and pandemics,” Benita Ainabe, ADB financial sector specialist for Southeast Asia, said.
The ADB said the program is supporting pending legislation in congress to merge the functions of the National Disaster Risk Reduction and Management Council and the Office of Civil Defense under a new Department of Disaster Resilience to speed up the government’s disaster response and substantially reduce coordination and bureaucratic inefficiencies.
The program supports reforms to make climate change adaptation and disaster risk reduction an integral part of comprehensive development plans of local government units.
It will support a pilot disaster insurance scheme, the first of its kind in Southeast Asia, in several cities across the country to bolster their fiscal resilience, the ADB said.
It also aims to provide a predictable, timely source of financing for post-disaster response.
The program will help local governments improve medium-term pandemic preparedness and introduce reforms beyond the government’s immediate COVID-19 response needs. — Angela Celis