WASHINGTON, November 17, 2021 – The World Bank Board of Directors today approved a new conditional line of credit to help strengthen the institutional and financial capacity of the Philippines to manage risks associated with climate change, natural disasters and epidemics.
The Fourth Disaster Risk Management Development Policy Loan with Deferred Disaster Drawdown Option (CAT-DDO 4) provides $ 500 million in funding that the Philippines can leverage quickly to manage the financial impacts of disasters and epidemics.
“This conditional financing mechanism protects the fiscal health of the Philippines following natural disasters and epidemics, helps develop sustainable risk financing mechanisms for local government units, and protects poor and vulnerable households from the impact of catastrophes ” noted Ndiamé Diop, World Bank Country Director for Brunei, Malaysia, Philippines and Thailand. “If not well managed, these shocks can exacerbate poverty through loss of human life, destruction of assets, disruption of economic activities and trade, and indirect impacts on health, mobility and access to education.
The country can access funds upon declaration of a state of disaster by the Republic of the Philippines due to an impending or ongoing natural disaster or a declaration of a public health emergency.
The total loan amount is available for three years after the entry into force of this project. This gives the government immediate access to liquidity to better manage the cost of shocks and protect the Filipino population. The government can renew this line of protection with the World Bank for a total period of 15 years.
This new loan operation supports the government’s ongoing efforts to strengthen disaster response and recovery policies and planning. This includes integrating the use of pre-approved disaster rehabilitation and recovery plans to accelerate access to national government funding for post-disaster recovery.
In the aftermath of disasters, skilled workers in fields such as construction, welding, electrical installation and maintenance, pipe laying, heavy equipment operation and food production are essential for reconstruction and rehabilitation. reconstruction. Part of the program will support the strengthening of the supply of technical and vocational training in the community.
This CAT-DDO4 also supports government efforts to integrate climate risk management into the preparation of provincial commodity investment plans among local government units (LGUs), which can reduce the extent of agricultural damage. and fisheries resulting from natural hazards and extreme weather events.
According to Lesley Jeanne Y. Cordero, Senior Disaster Risk Management Specialist at the World Bank, the political reforms supported by the CATDDO4 are particularly critical with the implementation of the Supreme Court’s decision on the Mandanas case and the next transition phase of devolution of functions identified in the 1991 Local Government Code.
“The reforms supported by the program allow local governments to take stock of climate actions, track and report climate change-related expenditures in order to inform planning and programming of investments for resilience to risks” noted Cordero.
The Philippines is very vulnerable to multiple hazards due to its unique geography. The country is the ninth most affected country in the world by extreme weather events, the second among Asian countries according to the 2020 Global Risk Index.
About 60% of the country’s total land area and at least 74% of Filipinos are vulnerable to multiple hazards, including typhoons, earthquakes, floods, storm surges, tsunamis, volcanic eruptions and landslides. ground. Typhoons have accounted for around 90 percent of the damage in recent years. Over the past 30 years, 33,000 people have died and 120 million people have been affected by natural disasters.