$400M loan approved to manage public assets, fiscal risks in face of natural disasters, climate change
WASHINGTON, December 17, 2019 – The World Bank Group’s Board of Executive Directors has endorsed a new Country Partnership Framework (CPF) for the Philippines for 2019-2023, which will prioritize investments in human capital (health, education, nutrition), competitiveness and job creation, peace-building, climate and disaster resilience, governance, and digital transformation.
“With the new Country Partnership Framework, the World Bank Group renews its commitment to support the Philippines by mobilizing financing, global knowledge and technical expertise to support reforms and programs that help speed up poverty reduction and promote greater inclusion,” said Victoria Kwakwa, World Bank Vice President for East Asia and the Pacific.
The Philippines has nearly doubled GDP per capita over the past two decades, from US$1,607 in 2000 to US$3,022 in 2018 and is poised to cross the threshold from lower-income country status to upper-middle-income country in the next few years.
The country is making good progress in reducing poverty, owing in large part to the expansion of jobs outside farming and fishing, expansion of social protection, and remittances from local and overseas workers. Based on the national poverty line, the poverty rate dropped from 26.6 percent in 2006 to 21.6 percent in 2015 and 16.6 percent in 2018.
“The Philippines can deepen inclusive growth and broaden shared prosperity by tackling child malnutrition and learning gaps in education; promoting policies that create more and better jobs for Filipino workers; and focusing on the dual risk of conflict and natural disasters that hurt poor communities,” said Mara Warwick, World Bank Country Director for Brunei, Malaysia, Philippines and Thailand. “The new Country Partnership Framework aims to help overcome the core constraints that continue to hamper the country’s efforts to address the remaining vulnerability of many Filipino families."
The World Bank, Warwick added, will support a cohesive approach to Mindanao’s development and intensify efforts to engage the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), including reconstruction support for Marawi. For instance, the Bank will support projects that link remote communities to main markets, ports, and key growth corridors as well as promote human development and address drivers of conflict.
The CPF is a joint strategy of the three members of the World Bank Group (WBG): the International Bank for Reconstruction and Development (IBRD), also known as the “World Bank”; the International Finance Corporation (IFC), which is focused on the private sector in developing countries; and the Multilateral Investment Guarantee Agency (MIGA), which provides political risk insurance to private sector investors and lenders.
“As part of the WBG, IFC focuses on promoting reforms that boost competitiveness, spur more inclusive growth and create better quality jobs,” said Yuan Xu, IFC Country Manager for the Philippines. “Developing a resilient, efficient, and competitive private sector led economy will position the Philippines for a brighter and more sustainable future. Through our integrated advisory and investment engagement, IFC aims to support the country to accelerate infrastructure build-up, deepen financial inclusion, promote disruptive technology and scale up more sustainable and climate resilience business models.”
The new CPF benefitted from wide consultations, including a social media campaign and university outreach with student groups to understand the perspective of young Filipinos. The Bank also conducted consultations in different parts of the country to get inputs from civil society representatives, national and local government officials, private/business sector, academia, members of the legislature and other development partners.
On the same day, the Bank’s Board approved a US$400 million development policy loan (DPL) to boost competitiveness and fiscal sustainability, as well as strengthen financial resilience to natural disasters and climate change impacts.
DPLs 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’ own development agenda.
Reforms supported by this DPL include streamlining processes to reduce the cost of doing business; establishment of the foundational ID system to improve efficiency and transparency of public and private services; enhancing access to financial services through improved payment systems; and strengthening management of public assets and fiscal risks to natural disasters and climate change impacts.