Philippines: Timely Reconstruction to Lessen Impact of Typhoon Yolanda—World Bank

December 6, 2013


Structural engineers inspect a damaged classroom in Cebu, Philippines. 

World Bank

WASHINGTON, December 6, 2013 – Timely implementation of the country’s recovery and reconstruction program will reduce the economic and social impact of Typhoon Yolanda (Haiyan) and help the Philippines maintain a high growth rate that benefits the poor.

This assessment was made today by Axel van Trotsenburg, World Bank Vice President for East Asia and Pacific following his visit to Tacloban to meet with residents and city officials affected by the typhoon. He also met with national government officials on December 5-6.

“In my short visit to Tacloban, I was able to get a sense of the devastation caused by Typhoon Yolanda and have been impressed by how people are coping and working extremely hard to clean up, rebuild and start the long road towards normalization. The World Bank will stand by people in the affected communities in their reconstruction efforts over the months and years ahead,” said Mr. van Trotsenburg.

“The World Bank support will be guided by the human face of this tragedy. This obliges us to act quickly and work with all involved parties toward a quick implementation of the recovery and reconstruction measures so that children can go back to school, people have access to health services, and businesses can return to normal and resume creating jobs and incomes,” Mr. van Trotsenburg said.

Today, as part of a broader and longer-term assistance package, the World Bank Group’s Board of Executive Directors approved the US$500 million quick-disbursing budget support that the government can use in dealing with the short-term recovery and reconstruction efforts.

A week after Typhoon Yolanda’s landfall, the government started formulating the recovery and reconstruction plan while humanitarian aid relief efforts were underway. To support the planning process, the World Bank Group quickly deployed its disaster risk management specialists to help the government assess damages and identify priority areas for immediate short-term recovery and reconstruction support.

Based on the experience on other countries, the World Bank Group has also provided technical assistance on disaster-resilience design options for housing, health facilities, schools, and public facilities that can withstand super typhoons as well as resist high-magnitude earthquakes and severe flooding.

The World Bank’s pre-Yolanda forecast put the Philippines’ GDP at 7.0 percent in 2013, 6.7 percent in 2014, and 6.8 percent in 2015. “With the implementation of a rapid and effective recovery and reconstruction program by the government after Typhoon Yolanda, it’s likely that the country’s GDP growth rate will be 6.9 percent in 2013 and 6.5 percent and 7.1 percent, respectively, in the succeeding years,” said Rogier van den Brink, Lead Economist for the World Bank in the Philippines.

Recovery and reconstruction usually covers humanitarian relief, reconstruction and rehabilitation of public infrastructure, social safety net programs, livelihood activities like farming and fishing, and public grants for targeted interventions to replace some of the private assets or properties of the poor and most vulnerable, including their homes.

“The costs of Yolanda’s reconstruction program include the substantial mark-up for both the private and the public sector to rebuild at the higher standards needed to deal with the more extreme weather events caused by climate change. Going forward, finding a fiscally sustainable solution to deal with these ever more frequent events and maintaining the current excellent economic performance will be key,” said Mr. van den Brink.

“Recovery and reconstruction are really all about people—about children going back to school or members of affected communities regaining their productive lives. Timely implementation will enable the typhoon-affected communities to rebuild their homes, their livelihoods and infrastructure faster and better, thereby mitigating the disaster’s social impact while maintaining the country’s growth momentum,” said Motoo Konishi, Country Director of World Bank in the Philippines

“Reconstruction efforts will take a long time and the country, its leaders, and development partners will need perseverance and persistence. The World Bank Group is a long-term partner of the Filipino people in this endeavor. We are steadfast in our commitment to help the country recover from this tragedy and will continue to support the Filipino people’s efforts to build a more resilient and prosperous Philippines,” he added.

Background information

The newly approved budget support is a Development Policy Loan (DPL) designed to provide quick-disbursing assistance to countries undertaking reforms. (DPLs typically support policy and institutional changes needed to create an environment conducive to sustained and equitable growth as defined by borrower-countries’ development agenda.) The loan has a grace period of 10 years and a final maturity of 25 years. Lending Rate for the Loan would be US$ 6 month LIBOR + variable spread (resets every 6 months). The Lending Rate would be approximately: 0.344% (US$ 6 month LIBOR) + 0.47% (variable spread) or 0.814% based on today’s rates.

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