Asian Development Bank approves another US$500 million loan for disaster resilience
MANILA – The Asian Development Bank (ADB) approved another US$500 million policy-based loan for the Philippines to have quick access to emergency financing in the event of disasters brought by natural hazards or public health emergencies that result to a declaration of a statement of calamity.
“the Philippines has been hit by several major disasters in recent years, including Typhoon Haiyan (Yolanda) in 2013, thee Taal Volcano eruption in January 2020, and the ongoing coronavirus disease (COVID-19) pandemic,” said ADB Vice President Ahmed M. Saeed. He added the 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.
The Philippines sits in the Pacific Ring of Fire making it among the most disaster-prone countries in the world, including active volcanoes, frequent earthquakes, and an average of 20 typhoons a year which cause floods and landslides. About three-fourths of the country’s population is vulnerable to multiple natural hazards with these disasters worsening poverty in typhoon-prone provinces, most of which are in the country’s eastern seaboard.
Disasters cost the Philippines 0.7% to 1.0% of gross domestic product annually including about P43.5 billion or US$890 million due to earthquakes and around P133-billion or US$2.7 million 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,” said ADB Financial Sector Specialist for Southeast Asia Benita Ainabe.
Th program supports pending legislation in Congress to join 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 disaster response and substantially reduce coordination and bureaucratic inefficiencies.
The program further supports moves 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 in Southeast Asia, in a number of cities across the country to bolster their respective fiscal resilience. It aims to provide a predictable, timely source of financing for post-disaster response. The program will help local governments improve their medium-term pandemic preparedness and introduce reforms beyond the government’s immediate COVID-19 response needs.
According to the statement, the ADB has provided significant post disaster support since the 1980s, particularly after Typhoon Haiyan (Yolanda). The Bank’s rehabilitation and reconstruction assistance for damaged public assets in the country is valued at around US$1.8 billion in inflation-adjusted terms. It has also provided at least US$1.8 billion in loans and grants to assist the government in its urgent COVID-19 response. (Melo M. Acuña)
Disaster-prone Philippines stands to receive US$500 million policy-based loan for disaster response. (ADB Photo)
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