Typhoon Rai (locally known as “Odette”) hit the Philippines a week before Christmas, affecting close to 2 million people in 400 municipalities and cities, causing injuries and deaths, extensive damage to properties, public infrastructure (roads, bridges, seaports, airports), and the farming sector. On December 28, 2021, the World Bank released US$80 million to support the Philippine government’s recovery and reconstruction efforts.
These funds are coming from the US$500 million Fourth Disaster Risk Management Development Policy Loan with a Catastrophe-Deferred Drawdown Option (CAT-DDO 4) approved by the World Bank’s Board of Executive Director on November 17, 2021 to help strengthen the Philippines’ institutional and financial capacity to manage risks from climate change, natural disasters, and disease outbreaks. It is a contingent credit line that the Philippines can immediately tap to manage financial impacts brought about by these shocks without undertaking disruptive budget reallocations or cutting implementation of ongoing programs. The Government may access additional resources from the CAT-DDO4 in response to Typhoon Rai in January 2022.
“In times of calamities like typhoons and floods, poor families suffer disproportionately,” said Ndiamé Diop, World Bank Country Director for Brunei, Malaysia, Philippines, and Thailand. “The World Bank stands with the country during this difficult time. We are committed to help hasten the country’s recovery and reconstruction efforts, restore social services, and strengthen the country’s defenses against future disaster risks.”
This financing supports on-going government efforts to strengthen disaster response and recovery policies and interventions. It comes with technical assistance to support preparations of pre-approved Disaster Rehabilitation and Recovery Plans to speed up access to funding from the national government for post-disaster recovery and reconstruction.
According to Lesley Jeanne Cordero, Senior Disaster Risk Management Specialist, the National Disaster Risk Reduction and Management Council and the World Bank have been implementing the Ready to Rebuild (R2R) Program since March 2021, training more than 500 disaster managers in 150 local governments to develop flexible science-based local recovery plans and responsive financing strategies for various types of disasters.
“The R2R Program provides the “how” — how to prepare the people, communities, and local governments to be more resilient and ready to respond and recover from disasters better and faster. It provides simple tools, ready templates, and practical solutions to address disaster recovery issues and bottlenecks,” said Cordero.
Cordero added that the Ready to Rebuild Program could be tapped to assist the provinces, cities and municipalities affected by Super typhoon Odette as they develop their local recovery plans, implement reconstruction projects, and leverage funding support. This will help devastated communities build back better and pursue a green, resilient, and inclusive recovery.
The release of Cat-DDO funds followed President Rodrigo Duterte’s declaration of a State of National Calamity on December 21 and a request from the Philippine Government to access the liquidity facility on December 23, 2021. Under the State of Calamity are regions Mimaropa (Mindoro, Marinduque, Romblon, Palawan), Western Visayas, Central Visayas, Eastern Visayas, Northern Mindanao, and Caraga.
The Cat-DDO is one of many forms of assistance available from the World Bank Group to help countries plan efficient responses to natural disasters. It provides immediate access to funds after a major natural disaster, a time when available funds are often not adequate to meet the needs for reconstruction and recovery.
The full loan amount is available for disbursement within three years upon effectivity. It has a revolving feature; amounts repaid during the drawdown period are available for subsequent withdrawal. The three-year drawdown period may be renewed up to four times, for a total maximum period of 15 years.