WB approves $600-M funding package for PH

THE World Bank has approved nearly P33 billion in fresh funding for the Philippines to rebuild the country’s economy and strengthen the financial sector.

The $600-million Philippines Second Financial Sector Reform Development Policy Financing program will be used to boost financial sector stability, integrity and resilience; expand financial inclusion for individuals and firms, particularly small ones; and catalyze climate and disaster risk finance to help protect Filipinos from climate change and natural disasters.

“Policy actions that strengthen the stability of the financial sector — including banks and insurance companies — will help Filipino families, businesses and investors withstand financial shocks and enhance their resilience by ensuring that problems ... are detected at an early stage without severe disruptions to the economy,” World Bank country director Ndiamé Diop said in a statement.

The World Bank noted that only 51 percent of Filipinos ages 15 and above have accounts with financial institutions, below the

East Asia and Pacific average of 80 percent. In the bottom 40 percent of the population, only 34 percent of adults have accounts, it added.

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

The quick-disbursing development policy loan program also aims to grow the local catastrophe insurance market to prevent people from falling into poverty following natural disasters. The increased use of catastrophe insurance, Diop said, will allow the government to focus fiscal resources on supporting people who need these most.

Reforms that promote innovative financial services by harnessing digital technologies, build consumer trust and improving the credit information infrastructure will also be supported by the financing program.

The World Bank also wants financial institutions to integrate climate and environmental risks in their risk management frameworks and mobilize private sector financing for green investments.