Disaster relief gains access to $500-M World Bank funds

 

 

THE WORLD BANK has given the Philippines a $500-million credit line to help improve disaster preparedness, the multilateral lender said in a statement on Wednesday. The Disaster Risk Management Development Policy Loan with Catastrophe Deferred Drawdown Option (CAT-DDO) gives the country immediate access to funding for emergency relief, recovery and reconstruction following a major natural disaster, the statement read. The government will be able to borrow up to $500 million should there be a Presidential declaration of a state of calamity. Republic Act No. 10121, or the Disaster Risk Reduction and Management (DRRM) Act, defines “state of calamity” as “a condition involving mass casualty and/or major damage to property, disruption of means of livelihood, roads and normal way of life of people in affected areas as a result of...natural or human-induced hazard.” The country will have three to 15 years to repay debt incurred under this facility, the World Bank said. Amounts repaid in this period will be made available for subsequent borrowings. The Philippines is among the most vulnerable countries in the world to natural disasters, the World Bank noted. On average, more than 1,000 lives are lost every year due to calamities, with typhoons accounting for 74% of fatalities, 70% of agricultural damage and 62% of total damage. “This financing support will help ensure that affected populations -- especially the poor who are the most vulnerable -- receive adequate assistance as soon as possible after a disaster, and that important infrastructure facilities are restored a lot quicker, thus minimizing social and economic dislocation in affected communities,” Finance Secretary Cesar V. Purisima said in the statement. CAT-DDO can provide immediate assistance in the wake of disasters, Mr. Purisima added, while other sources like bilateral aid and concessional funding are still being mobilized. “CAT-DDO will help reduce the government’s fiscal vulnerability in the event of a catastrophic adverse natural event,” the Finance chief said. In late 2009, storms Ondoy and Pepeng battered the country, leaving behind damage estimated at equivalent to 2.7% of gross domestic product (GDP) and increased the number of poor people by about 500,000. In response, the government enacted into law the DRRM Act in May last year and adopted a Strategic National Action Plan for Disaster Risk Reduction shortly after, institutionalizing a comprehensive, integrated approach to disaster management in the country. “The Philippines has drawn up a comprehensive framework for managing impact of natural disasters and has incorporated it in the country’s overall development strategy,” World Bank Country Director Bert Hofman said in the same statement, noting that such framework is crucial for achieving inclusive, broad-based growth. “The poor are among the most at risk from natural disasters,” Mr. Hofman noted. “Reducing their vulnerability to disasters forms an important part of our assistance strategy for the country,” he added. Citing data from the National Disaster Risk Reduction and Management Council, the World bank noted that the Philippines incurred an average of P28 billion in direct damage to agriculture, infrastructure and the private sector every year from 1990 to 2008 due to natural calamities.

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