PH Secures Fresh $600-Loan From World Bank

The World Bank granted a new ₱32.7 billion loan to the Philippines to boost the country’s resiliency and sustainability of the financial sector and strengthen economic recovery from the pandemic.

According to World Bank, the loan will support three policy reform areas of the Philippine government.

These include strengthening financial sector stability, integrity, and resilience; expanding financial inclusion for individuals and firms, especially micro, small, and medium enterprises; and catalyzing climate and disaster risk finance.

World Bank Philippines Ndiamé Diop said strengthening the financial sector, such as banks and insurance companies, will help Filipino families, businesses, and investors are prepared for economic shocks.

“It will also enhance their resilience by ensuring that problems in these financial institutions are detected at an early stage without severe disruptions to the economy,” Diop said.

Based on current data, only 51% of Filipinos aged 15 and above have a transaction account with a financial institution, below the East Asia and Pacific regional average of 80%.

“Financial inclusion can be a key enabler to speed up poverty reduction and strengthen recovery from the pandemic,” Diop said.

“Filipinos who have accounts with financial institutions like banks will have opportunities to use other financial services, such as credit and insurance, to start and expand businesses, invest in education or health of their children, manage risks, and weather financial shocks, which can improve the overall quality of their lives,” he added.

Diop said part of the reform would include developing the catastrophe insurance market in the Philippines to prevent people from falling into poverty following natural disasters.

The increased use of catastrophe insurance will allow the government to allocate financial resources to people who need them most as a post-disaster response.

Source: Manila Bulletin