The World Bank approves $ 500 million in immediate liquidity for disaster-stricken LGUs

The World Bank is expected to greenlight in October a $ 500 million loan that can be quickly disbursed to local governments in need of funds, especially in the wake of natural disasters and disease outbreaks.

The proposed fourth Disaster Risk Management Development Policy Loan, which will be approved by the World Bank’s Board of Governors on 28 October, has a Disaster-Delayed Disbursement Option (CAT-DDO).

Ordinary loans are usually disbursed on a multi-year, predetermined implementation plan. CAT-DDO funds, meanwhile, will be released as soon as the government declares a state of emergency or a public health emergency.

The World Bank defined CAT-DDO as a “conditional line of financing that provides countries with immediate liquidity to deal with shocks associated with natural disasters and / or health-related events.”

CAT-DDO loans “serve as early financing while mobilizing funds from other sources such as bilateral assistance or reconstruction loans,” the World Bank added.

The Philippines secured CAT-DDOs worth $ 500 million each in 2011 and 2015.

Last year, the country also borrowed a $ 500 million development policy loan from the World Bank for disaster risk management. This did not have a CAT-DDO attached to it as it was to be used on COVID-19 response.

Remedying important gaps

The forthcoming loan, to be implemented by the Ministry of Finance, will specifically “focus on addressing the main gaps in the management of risks associated with natural disasters and support measures aimed at institutionalizing the use of disaster recovery plans for vulnerable LGUs (local government entities)). by requesting access to funding from the National Disaster Risk Reduction and Management Fund to accelerate the rehabilitation and reconstruction process integrating climate and disaster risk information for LGUs within the National Government’s Geospatial Information Management and Analysis Project on Hazards and Risk Assessment in the Philippines (GeoRiskPH “platform; and extend the government’s existing skills development program to vulnerable workers affected by the COVID-19 pandemic and future health conditions and disasters,” the World Bank said, referring to the state budget annual disaster fund.

The World Bank noted natural disasters hampered by climate change and pandemics, deteriorating economies and “keeping or relocating people back to poverty.”

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