THE Philippines is expecting a recently-approved $500-million loan from the World Bank to be released by the end of the month, Finance Secretary Carlos G. Dominguez III said, boosting the government’s finances as it struggles to contain the coronavirus disease 2019 (COVID-19) outbreak.
In a statement Wednesday, Mr. Dominguez said the $500-million Third Risk Management Development Policy Loan from the World Bank can be expected “for accelerated disbursement by April 30.”
The loan was approved on April 10, and follows the two earlier risk management development policy loans back in 2015 and 2012.
“This $500-million facility, which is just one of several financial assistance programs made available to the Philippines by the World Bank during this global health crisis, bolsters the Duterte administration’s overall efforts to provide instant relief to the poor and other hardest-hit sectors, and strengthen our health care system,” Mr. Dominguez was quoted as saying.
The Department of Finance (DoF) said the loan is payable over 29 years and includes a 10-and-a-half-year grace period.
The loan will fund key programs that will strengthen the country’s national disaster response capacity, including the current effort to contain COVID-19.
“We thank the World Bank for its swift action on this facility in support of disaster risk management, coming at this critical time when the Philippines, like most other countries worldwide, is struggling to cope with the devastating health, social and economic impacts of the coronavirus pandemic,” Mr. Dominguez said.
The World Bank has also earmarked a $100-million loan for the Philippines from its $14-billion fast-track COVID-19 facility for developing countries seeking to boost their health systems and mitigate the economic fallout of the public health crisis.
The $100-million loan, expected to be acted on by the bank’s board by April 20, will help the Department of Health purchase personal protective equipment and testing and laboratory supplies as well as pay for the lease of property to be repurposed as quarantine areas, as well as other essential items needed to respond to the pandemic.
The DoF has said it is looking to borrow around $5.7 billion from multilateral lenders including the World Bank, the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank.
The ADB has extended a total of $8 million in grants and pledged another funding package worth at least $1.6 billion for the Philippines.
The DoF expects the budget deficit to widen to 5.3% of gross domestic product (GDP) this year, higher than last year’s 3.5% and the 3.2% initial target. The Finance department expects the debt to GDP ratio to hit 46.7% this year from 41.5% in 2019. — Beatrice M. Laforga