Philippines gets additional $500 million loan from World Bank
The Philippines Emergency COVID-19 Response Development Policy Loan will support the social amelioration program for 18 million low-income families as well as additional subsidies provided to 4.3 million beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps).
KJ Rosales, file
Philippines gets additional $500 million loan from World Bank
Czeriza Valencia (The Philippine Star) - May 30, 2020 - 12:00am

MANILA, Philippines — The World Bank has approved a fresh $500-million loan to the Philippines to help the country fund its social assistance and wage subsidy programs for small and medium enterprises amid the coronavirus pandemic.

The Philippines Emergency COVID-19 Response Development Policy Loan will support the social amelioration program for 18 million low-income families as well as additional subsidies provided to 4.3 million beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps).

The loan will also support the expansion of the provision of social assistance to 13.6 million households that are not part of the 4Ps but are affected by the pandemic, as well as support for repatriated overseas Filipino workers.

The new funding also supports the government’s efforts to ease the financial burden of small and medium enterprises through a two-month wage subsidy, additional financial relief through deferrals of tax and social security payments; and a credit guarantee scheme to ensure the continuity of their operations and retention of employees.

The COVID-19 pandemic has badly hurt millions of poor and vulnerable Filipino families, particularly daily wage earners,” said Achim Fock, World Bank acting country director for Philippines.

“This new financing can help with the delivery of financial support for struggling families and communities while the country is ramping up efforts to contain the pandemic and reduce its economic impact.”

Mobility restrictions imposed to contain the spread of COVID-19 have severely affected the operations of small firms especially in tourism, transport, agriculture, retail and construction.

According to a rapid survey conducted by the government, 77 percent of micro and small firms and 62 percent of medium-sized firms had to close due to the enhanced community quarantine.

Those that remained open suffered a 66.5 percent drop in sales. Government assistance to these firms can help prevent businesses from closing permanently and in the process save millions of jobs as the economy starts to recover.

The loan will be repaid in 29 years but the Philippines will be given a grace period of 10.5 years.

Last month, the World Bank approved two loans also intended to support the government’s pandemic response.

On April 9, the bank approved a Third Disaster Risk Management Development Policy Loan of $500 million to enhance the Philippines’ disaster preparedness policies, planning and investments for public health emergencies at the national and local government levels.

The financing provided under this project will also support urgent needs created by the COVID-19 crisis.

On April 23, the lender approved a $100 million loan for the Philippines COVID-19 Emergency Response Project to help meet urgent health care needs in the wake of the pandemic and bolster the country’s public health preparedness.

WORLD BANK
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