The Asian Development Bank (ADB) has approved another policy-based loan, this time worth $500 million (P24.3 billion), to strengthen the Philippines’ resilience to disasters.
In a statement on Thursday, ADB Vice President Ahmed Saeed said the loan, called the “Disaster Resilience Improvement Program,” “would help the government manage fiscal risks posed by” recent and current calamities “and lessen [their] economic and social impacts on people’s livelihoods and the country’s economy.”
The Philippines is one of the most disaster-prone countries in the world, according to the Manila-based multilateral lender. It said nearly three-fourths of the Filipino population was vulnerable to natural hazards, worsening poverty in typhoon-prone provinces on the country’s eastern seaboard.
Disasters cost the country between 0.7 percent and 1 percent of its gross domestic product every year, including about P43.5 billion ($890 million) caused by earthquakes and around P133 billion ($2.7 billion) from typhoons.
The loan “will support government policy reforms aimed at ensuring the government can quickly address the needs of vulnerable segments of the population following disasters,” said Benita Ainabe, ADB financial sector specialist for Southeast Asia.
“It will also strengthen the Philippines’ overall response to disasters and pandemics,” she added.
The ADB said the loan would support measures in Congress to combine 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 hasten the government’s calamity response and reduce coordination and bureaucratic inefficiencies.
It would also support reforms to make climate-change adaptation and disaster-risk reduction an integral part of comprehensive development plans of local government units.
It would also 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 loan is the latest extended by the lending institution this year. It previously approved a $125-million health-focused Covid response loan; $300-million loan for financial inclusion reforms; $400-million loan to boost farmers’ incomes; $26.5-million loan to help local government units boost revenues; $126-million loan to support the Metropolitan Waterworks and Sewerage System’s construction of a water transmission pipeline; $500-million loan to bolster the government’s conditional cash-transfer program; $400-million loan to strengthen the country’s capital markets; $200-million loan to support poor households; and $1.6-billion loan for the government’s Covid-19 response.
These loans now total almost $4 trillion.