Philippines, World Bank sign $500M loan to ease the coronavirus impact

MANILA, Jun 4, 2020, The Manila Times. The Philippines signed the $500-million loan agreement with the World Bank aimed at supporting the government’s ongoing efforts to ease the social and economic impact of the coronavirus disease 2019 (Covid-19) pandemic on poor households and workers of micro, small and medium enterprises (MSMEs), The Manila Times reported.

In a statement on Thursday, the Department of Finance said the deal for the Philippines’ Emergency Covid-19 Response Development Policy Loan (ECRDPL) was signed on Wednesday by Finance Secretary Carlos Dominguez 3rd and Achim Fock, the World Bank acting country director for Brunei, Malaysia, Philippines and Thailand.

Dominguez was quoted as saying that the ECRDPL replaced the proposed additional financing for a project that aims to support the government’s goals of promoting competitiveness, enhancing fiscal sustainability, and strengthening financial resilience to natural disasters and climate change.

The ECRDPL will have the same terms and conditions as the initially proposed Promoting Competitiveness and Enhancing Resilience to Natural Disasters Subprogram 1, which it replaced.

The Finance chief said “the change is in view of World Bank’s advice to specifically come up with a new development policy loan on the country’s Covid-19 response instead of a supplemental financing package for the Promoting Competitiveness and Enhancing Resilience to Natural Disasters project.”

The agreement for the ECRDPL will bank on the policy actions accomplished by the government in providing emergency subsidies to poor and other vulnerable households, and wage subsidies to workers in MSMEs affected by the strict quarantine measures imposed by the national and local governments to prevent Covid-19 spread, he added.

Dominguez emphasized that the $500-million loan covers a maturity period of 29 years, inclusive of a grace period of 10-and-a-half years, and is targeted for accelerated disbursement by third week of June.