MANILA, Philippines â The World Bank has provided a loan of $ 300 million to the Philippines to fortify government buildings in Metro Manila and prepare for the “Big One”, or an earthquake with an intensity of 7 or Plus, another Official Development Funded (ODA) project and added to the country’s record debt of 10.99 billion pesos in April 2021.
On June 2, the board of directors of the Washington-based lender approved funding for the bulk of the $ 309.5 million Philippines Seismic Risk Reduction and Resilience Project, which will be implemented by the ministry. Public Works and Highways (DPWH).
This project âwill improve around 425 structures, including school buildings and health centers, in order to reduce damage caused by natural hazards such as earthquakes and other climate-related eventsâ.
The project also aims to “reduce the risk to approximately 300,000 teachers, students, doctors, patients and staff who are users of these facilities,” the World Bank said in a statement Thursday (June 3rd).
Previous World Bank estimates had shown that “The Big One” – a powerful 7.2 magnitude earthquake along the West Valley Fault – could kill up to 48,000 people and inflict $ 48 billion. economic losses.
âThe Metro in Manila or the National Capital Region is the seat of government and the demographic, economic and cultural center of the country,â said Ndjame Diop, World Bank director for Brunei, Malaysia, the Philippines and the United States. Thailand.
âStrengthening the security of its buildings and structures while strengthening the institutional response to disasters will help protect the lives and security of over 12 million people, including the poor and most vulnerable,â said Diop.
âIn addition, it will provide much needed economic resilience to the country,â added Diop.
The project will also better equip the DPWH to prepare for and respond to overlapping natural disasters like floods, typhoons, volcanic eruptions as well as pandemics, the World Bank said.
The loan, according to the World Bank, “will finance the essential equipment of the DPWH to improve its communication capacities and restoration of mobility and transport in Metro Manila after a major earthquake.”
“It will also improve basic capacities and the capacities to organize operations and coordinate resources to respond to other emergencies,” he said.
The implementation of the project will also create jobs through around four million days of labor renovating vulnerable buildings and help revive the construction sector, which had been hit hard by the pandemic-induced recession, a. said the World Bank.
According to Inquirer sources, the World Bank will approve two more loans for the Philippines later this month:
- $ 280 million for the second additional funding for the Ministry of Agriculture (DA) rural development project on June 17, a week ahead of the original schedule
- $ 400 million for the first financial sector reform development policy financing on June 24.
These two upcoming World Bank financings were among the 12 remaining loans in the lender’s short-term pipeline to the Philippines, totaling $ 2.7 billion.
This year, the World Bank also approved additional funding of $ 500 million for the COVID-19 vaccine emergency response project, in addition to a grant of $ 700,000 for National Power Corp. (Napocor) can initiate the rehabilitation. the decades-old Agus-Pulangi hydroelectric complex in Mindanao.
The latest Treasury Office data also released on Thursday showed that the national government debt stock at the end of April rose 2 percent month-on-month and grew 27.8 percent faster year-on-year.
In a statement, the Treasury attributed the higher stock of bonds to the net acquisition of domestic and foreign loans.
As the Treasury sold a larger volume of Treasuries and bonds in April compared to previous months, domestic debt rose 0.9% mo and jumped 33.2% yoy. to reach 7 81 trillion pesos, representing 71.1%. Of the total.
External debt increased 4.9% mo. Yoy and 16.2% yoy to 3.18 trillion pesos, mainly as the Philippines borrowed 163.01 billion pesos from foreign sources in last April. At least 146.16 billion pesos were raised through the issuance of 121.97 billion pesos of global euro-denominated bonds and 24.19 billion pesos of yen-denominated samurai bonds.
From January to April 2021, gross national government borrowing reached 1.65 trillion pesos, 36% more than a year ago.
The government had scheduled borrowing of up to 3.3 trillion pesos for 2021, the bulk of which – 2.5 trillion pesos – will come from the domestic debt market through the sale of treasury bills and bonds while the financial system is swimming in liquidity.
By the end of the year, the outstanding debt is expected to reach 11.5 trillion pesos, or 57.8 percent of gross domestic product (GDP).
As the pandemic-induced recession continued into the first quarter of 2021 as bonds piled up, the Philippines’ debt-to-GDP ratio hit a 16-year high of 60.4% at the end of March. , slightly exceeding 60%. -the GDP threshold of the public debt that the rating agencies consider to be manageable.
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