The World Bank has disbursed as of April this year a total of US$1.2 billion in concessional financing to the Philippines to support the government’s efforts in containing the spread of the coronavirus pandemic and providing emergency relief to families most affected by this unprecedented global health and economic crisis.
Finance Secretary Carlos Dominguez III thanked the World Bank, represented by its newly designated country director for Brunei, Malaysia Philippines and Thailand Mr. Ndiame Diop, for its immediate response to the government’s urgent need for assistance to ease the impact of the coronavirus disease 2019 (COVID-19) pandemic on the country’s economy and its people.
Since April 2020, the World Bank has disbursed to the Philippines US$200 million as additional financing for the Second Social Welfare and Development Project (SSWDP), US$500 million for the Third Disaster Risk Management Development Policy Loan (TDRMDP), and another US$500 million for the Emergency Covid-19 Response Development Policy Loan (ECRDPL).
“I would like to thank your entire team, especially Mr. (Achim) Fock for the assistance you have provided during this interim period and during this very difficult time. It has been very challenging for the Philippines and we are very happy that the World Bank has been very responsive to our needs and has provided us with sound advice during this difficult period,” Secretary Dominguez said in his recent virtual meeting with Mr. Diop.
Mr. Diop succeeded Mr. Achim Fock, the World Bank operations manager for Brunei, Malaysia, Philippines and Thailand, who had assumed the post of country director in an acting capacity.
Secretary Dominguez and the other members of the Philippines’ “Build, Build, Build” infrastructure team welcomed Mr. Diop as the new World Bank country director for the Philippines and the three other Southeast Asian economies.
Mr. Diop said that including the assistance to the Philippines for its pandemic response efforts, the World Bank has so far delivered a total of US$1.9 billion in loans over a one-year period from June 2019 to June this year.
“Moving forward, the pipeline is really strong with nine projects, many of which are geared towards supporting the government effort to address the crisis as well as helping the recovery,” Mr. Diop said during last week’s meeting, which was held via the Zoom teleconferencing tool.
Mr. Diop said three of these projects in the pipeline amounting to almost US$1 billion “are expected to be approved by September.”
He said that on top of providing concessional financing, the World Bank has also been delivering knowledge and policy support, which, he said, is another important aspect of the institution’s responsibilities to its members-economies.
“We are strongly committed to supporting you on the reform agenda, the policy side,” Mr. Diop said. “You can count on our strong engagement and my commitment to support the government in any way possible to address the pandemic.”
Also present at the Zoom meeting with Mr. Diop were Secretaries Mark Villar of the Department of Public Works and Highways (DPWH), Arthur Tugade, of the Department of Transportation (DOTr), Wendel Avisado of the Department of Budget and Management (DBM); Acting Secretary Karl Kendrick Chua of the National Economic and Development Authority (NEDA); Finance Undersecretaries Mark Dennis Joven and Grace Karen Singson; and Finance Assistant Secretary Maria Edita Tan.
From the World Bank, among those who attended the Zoom meeting were Mr. Fock, Mr. Gabriel Demombynes, Program Leader for Human Development; Mr. Souleymane Coulibaly, Program Leader for Equitable Growth, Finance and Institutions and Lead Economist; Ms. Madhu Raghunath, Sector Leader for Sustainable Development; and Ms. Rong Qian, Senior Economist, Macroeconomics, Trade and Investment.
Secretary Dominguez said earlier that as of July 8, the government had raised a total of US$5.3 billion in concessional budgetary support from the Philippines’ development partners to help cover the yawning deficit resulting from the need to spend big on measures to provide relief to virus-hit sectors, beef up the country’s healthcare capacity, and keep the economy afloat.
The Philippines also secured a total of US$126 million in grants and loans from its development partners for various COVID-19 specific projects, including the purchase of emergency medical supplies and equipment, and a food distribution program for the poorest households in Metro Manila.
These forms of financial support for COVID-19 response came from the World Bank, the Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), the government of Japan through the Japan International Cooperation Agency (JICA), and the government of France through the Agence Française de Développement (AFD).
Secretary Dominguez said urgent measures to save and protect lives from the pandemic required massive amounts of funding, which the government augmented through borrowings, given that revenue collections were down because of the economic standstill following the imposition in March of strict mobility restrictions in a bid to contain the COVID-19 spread.
Tax Reform for Acceleration and Inclusion (TRAIN) Law, which raised state revenues in 2019 to more than 50 percent than it was before the administration of President Duterte, helped provide the government the fiscal space required to meet the massive state funds needed to fight COVID-19 and provide relief to the poor and other virus-hit sectors, Secretary Dominguez said.
Secretary Dominguez has underscored the conservative fiscal policies of President Duterte as a critical factor in maintaining the Philippines’ high credit worthiness, which has enabled it to secure borrowings from development partners for the government’s COVID-19 response efforts at the least cost.