After the chaos, now comes recovery

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FOLLOWING the living nightmare that was the catastrophic effects of Super Typhoon Yolanda, the Philippines now picks itself up toward a long and winding recovery. The country was off to a good start, at least, after it was reported that the economy grew 7 percent during the third quarter. Even if the prognosis for the last quarter of the year seems bleak after the impact of the calamity is felt, we should still stay positive. No time to be picky. We can use all the positive news that we can get.

Leading the recovery brigade in Central and Western Visayas will be the rural banking industry, with support from multilateral funding agencies.

Rural banks and microfinance institutions are in discussions with International Finance Corp., the private sector lending arm of the World Bank, to develop specific programs to help the private sector recover from the devastation. The World Bank is also in talks with international banks in this regard.

Touched by the resiliency of Filipinos to recover from the disaster, the World Bank has increased its financial aid package from $500 million to nearly $1 billion in reconstruction support to the Philippines.


In addition to the $500-million budget support loan, the World Bank earlier committed to help finance the overall recovery and reconstruction efforts in the aftermath of Yolanda, the Washington, US-based multilateral funding agency will support early reconstruction activities with a $480-million loan for a national community-driven development project.

According to Motoo Konishi, World Bank country director for the Philippines, communities, given proper support, can and should take the lead in their own recovery. He said that this was one of the most important lessons the World Bank has learned in Aceh, Indonesia, which was hit by the Indian Ocean tsunami in 2004, and Java by an earthquake in 2006. Community housing programs for permanent shelters in these areas delivered housing faster, at cheaper cost and of higher quality.

Here in the Philippines, rural banks will play a crucial role in spearheading the reconstruction efforts in the community, also anchored on housing development. The industry has found a reliable partner in Housing and Urban Development Coordinating Council, which reaffirmed government support to rural banks and microfinance institutions in housing loan activities, through the Home Guaranty Corporation (HGC) guaranty.

Seventeen members of the Rural Bankers Association of the Philippines (RBAP) have actively partnered with the HGC to boost housing in the countryside, and give the rural poor access to easy house financing. HGC’s first batch of RBAP-member partners are First Macro Bank, AMA Rural Bank, Banco Alabang, Bank of Makati, Cantillan Bank Inc., Lipa Rural Bank Inc., Mount Carmel Rural Bank Inc., Rang-ay Bank, Rural Bank of Cauayan, Rural Bank of Guinobatan, Rural Bank of Mabitac (Laguna) Inc., Rural Bank of Pagbilao, Rural Bank of Porac (Pampanga) Inc., Rural Bank of Rosario (La Union), Rural Bank of San Jose (Camarines Sur) Inc., Rural Bank of Tanza (Cavite) Inc. and Zambales Rural Bank. Alalay sa Kaunlaran Inc., meanwhile, is HGC’s first microfinance institution partner.

The HGC, under the Guaranty Program to the Countryside through Rural Banks and the Guaranty Program for Microfinance and Small Loans for Home Improvement, extends guaranty lines to financial institutions, and secures investments for home-lending programs with the goal of encouraging financial institutions like rural banks to lend more for housing.

Under HGC Guaranty Programs, the government guarantees the payment of the institution’s obligations. The same is also beneficial for both the banks and the borrowers, as the latter could avail up to 90 percent of the appraisal value of collateral property while the former are exempted from the Bangko Sentra ng Pilipinas capital reserve requirement for HGC-guaranteed loans. It also freed up banks from administrative burden if a loan sours.

Orientations and briefings about the HGC guaranty were conducted to rural banks in different parts of the country. By the end of 2012, HGC was able to reach 237 rural banks from 15 provincial federations in nine regions.

Assistance through housing is just but one component of the overall rehabilitation efforts to aid the victims of the super typhoon in the Visayas. Major debris clean-up and large-scale infrastructures like roads, bridges, drainage, ports and water systems rebuilding efforts will have to be undertaken. These will be followed by projects that promote sustainability like long-term livelihoods, economic development and capacity building.

There are many other areas that rural banks can chip in. Aside from the physical improvements, what should not be overlooked is the value of self-reliance and a sense of responsibility that rural banks promote to their clients. By arming the people from the community with this mindset, rural banks also impart to these people a sense of ownership to their own recovery. As Mr. Konishi pointed out, equipping typhoon victims to take the lead in their own recovery would have great psychological benefits. People’s participation in reconstruction could help lift their spirits.

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