World Bank unveils $12 billion aid package vs COVID-19

MANILA, Philippines — The World Bank Group is making available to its developing member countries an initial package of $12 billion to support efforts at containing the health and economic impact of the global coronavirus disease 2019 (COVID-19) outbreak. 

Financing for this package will be drawn from across its organizations: the International Development Association (IDA), International Bank for Reconstruction and Development (IBRD) and International Finance Corp. (IFC).

This crisis finance package will support country efforts at strengthening health systems, enhancing disease surveillance as well as the operations of the private sector to reduce the impact on economies. Policy advice and technical assistance will also be provided to developing member states.

For low income countries, grants and low-interest loans will be provided from the IDA. Middle income countries, meanwhile, can obtain loans from IBRD.

IFC, as the World Bank’s private sector arm, will provide its clients in certain sectors with the necessary support to continue operations and sustain jobs. Specifically, IFC will step into the expansion of trade finance and working capital.

For firms engaged in strategic sectors like medical equipment and pharmaceuticals, IFC’s assistance will be focused on sustaining supply chains and limiting downside risks.

“We are working to provide a fast, flexible response based on developing country needs in dealing with the spread of COVID-19,” said World Bank president David Malpass.

“This includes emergency financing, policy advice, and technical assistance, building on the World Bank’s existing instruments and expertise to help countries respond to the crisis.”

In the provision of assistance to COVID-19 response, World Bank will give priority to those at high risk with low capacity as well as to the poorest of the affected countries.

As the spread of the disease evolves, the bank said it will “adapt its approach and resources as needed.”

The virus that erupted in central China in December has killed more than 3,000 worldwide and infected over 90,000 people.

Malpass said the money — $8 billion of which is new — will go to countries that request help. The bank has been in contact with many member nations, but he did not specify which are likely to be the frist to receive aid.

“Ther point is to move fast. Speed is needed to save lives,” he said in a conference call.

“We want to make the best use of the World Bank’s extensive resources and global expertise and the historical knowledge of crises,” he said, citing similar crisis funding to combat the Ebola and Zika outbreaks in recent years.

The Philippine government for its part, is eyeing to avail of loan assistance from multilateral agencies to improve the quick response capabilities of the Department of Health (DOH) in case of a COVID-19 outbreak in the country, the Department of Finance (DOF) said yesterday.

In a text message to reporters, Finance Secretary Carlos Dominguez welcomed the announcement of the World Bank regarding its $12 billion financing assistance to help cushion the impact of COVID-19.

He said the government is exploring such loan packages from multilateral agencies to help contain the spread of the virus.

 “We are currently in discussions with the DOH on a loan package with multilateral agencies and this announcement of the World Bank is certainly welcomed,” Dominguez said.

The finance chief said the loan, if availed, would be used particularly for quick response measures in relation to the COVID-19 outbreak and similar events.

Dominguez said the Development Budget Coordination Committee (DBCC) is closely monitoring the impact of the spread of the coronavirus to determine the appropriate fiscal measures that will help affected sectors.

 “I am certain that the Monetary Board is ready as well with measures to counter the ill effects of COVID-19,” he said.

Earlier, Finance Undersecretary Antonette Tionko said the government is looking into various measures to assist sectors that are adversely affected by the coronavirus outbreak.

“We are looking at ways to help these companies, that’s why we’re looking at those importing the most from China. Also in the tourism sector, we’re also looking at how to help hotels, airlines, and others affected,” Tionko said.

“Maybe to waive fees, just to give them relief, in the event that this COVID-19 becomes very widespread,” she added. – With Mary Grace Padin, AFP