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The Asian Development Bank (ADB) approved a $ 500 million loan to help the Philippines prepare for natural hazards or public health emergencies, including piloting the first disaster insurance plan in Southeast Asia.
In a statement, the ADB said the new policy-based loan supports legislation pending in Congress to merge the functions of the National Council for Disaster Risk Management and Reduction and the Office of Civil Defense under a new Department of Disaster Resilience. . This is seen as accelerating the government’s response to the disaster and substantially reducing coordination and bureaucratic inefficiencies.
ADB Vice President Ahmed M. Saeed said this funding will help the country as it has been hit not only by the pandemic but also by major disasters in recent years, including the 2013 super typhoon Haiyan (Yolanda) and the eruption. from the Taal volcano in January 2020.
“This new contingent financing instrument for disasters will help the government manage the fiscal risks posed by these shocks and will reduce the economic and social impacts on people’s livelihoods and the country’s economy,” added Saeed.
The disaster insurance plan will be piloted in various cities across the country to strengthen its fiscal resilience. It also aims to provide a predictable and timely source of funding for post-disaster response.
The loan will make climate change adaptation and disaster risk reduction an integral part of the comprehensive development plans of local government units (LGUs), even beyond the pandemic.
The Philippines is among the most disaster-prone countries in the world, including active volcanoes, frequent earthquakes, and an average of 20 typhoons a year that cause floods and landslides.
Nearly three-quarters of the country’s population are vulnerable to multiple natural hazards, and such disasters exacerbate poverty in typhoon-prone provinces along the country’s east coast.
Disasters cost the Philippines between 0.7% and 1% of gross domestic product each year, including approximately P43.5 billion ($ 890 million) caused by earthquakes and about P133 billion ($ 2.7 billion). ) by typhoons.
“The Disaster Resilience Enhancement Program will support government policy reforms designed to ensure that the government can rapidly address the needs of vulnerable segments of the population after disasters. It will also strengthen the Philippines’ overall response to disasters and pandemics, ”said Benita Ainabe, ADB’s financial sector specialist for Southeast Asia.
The ADB has provided significant support to the Philippines after the disaster since the 1980s, especially after Supertyphoon Yolanda. ADB assistance for the rehabilitation and reconstruction of damaged public assets in the country is valued at around $ 1.8 billion in inflation-adjusted terms.
It has also provided at least $ 1.8 billion in loans and grants to assist the government in its urgent response to Covid-19.
