World Bank approves fresh $500M loan to boost Philippines' COVID-19 relief fund

The World Bank on Friday approved a new $500-million policy loan to boost the Philippines’ capacity to mitigate the impact of the coronavirus disease (COVID-19) pandemic on poor and vulnerable households and to provide financial relief to small and medium enterprises.

The fresh funding from the Washington-based lender is under the Philippines Emergency COVID-19 Response Development Policy Loan which has a maturity of 29 years and 10.5 years grace period.

The policy loan supports the country's efforts to provide social assistance to 18 million poor and vulnerable Filipinos badly hit by COVID-19, including additional subsidies in the monthly cash transfers given to 4.3 million beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps); expansion of social assistance to 13.6 million affected households that are not part of the program; and support for repatriated overseas Filipino workers.

The new funding also supports government efforts to alleviate the financial burden faced by small and medium enterprises through a two-month wage subsidy; additional financial relief through deferrals of tax and social security payments; and a credit guarantee scheme to help ensure continuity of their business operations and the preservation of people's jobs.

“The COVID-19 pandemic has badly hurt millions of poor and vulnerable Filipino families, particularly daily wage earners,” Achim Fock, World Bank acting country director for Brunei, Malaysia, Philippines and Thailand, said in a statement.

“This new financing can help with the delivery of financial support for struggling families and communities while the country is ramping up efforts to contain the pandemic and reduce its economic impact,” Fock said.

The new $500-million loan is the third funding support provided by the World Bank to the Philippines — the first being the $100-million for urgent healthcare needs and and the $500-million for disaster risk management programs such as the COVID-19 crisis.

“We thank the World Bank for its prompt action on this financial support for the Duterte administration's efforts to provide immediate relief to poor and low-income Filipinos plus small business workers who lost their income as a result of the work stoppages induced by the coronavirus pandemic,” Finance Secretary Carlos Dominguez III said.

“This swift loan approval underlines the strong international confidence in the government's capability to meet the massive financial requirements of containing this global health emergency,” Dominguez said. -MDM, GMA News