World Bank Grants $600 Million Worth of Loans to the Philippines
More loans are coming in for the Philippines. Recently, our government had been granted a new $500-million loan by the World Bank, in hopes of strengthening the county's financial sector, as well as for our climate and disaster risk reduction efforts.
The Philippines Second Financial Sector Reform Development Policy Financing, equivalent to about P32.7-billion, provides the Philippine government with support in three specific policy reform areas, according to the Washington-based lender.
These areas include strengthening financial sector stability, integrity, and resilience; expanding financial inclusion for individuals and firms, specifically micro, small, and medium enterprises (MSMEs); and catalyzing climate and disaster risk finance.
World Bank Philippines Country Director Ndiamé Diop hopes that the assistance trickles down from our top institutions, like banks and insurance companies all the way down to Filipino businesses, families, and investors.
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Diop also sees the loan as a way to ensure better financial inclusion for all Filipinos. Only 51 percent of Filipinos aged 15 and above have a transaction account with any financial institution, according to reports. The target average in the East Asia and Pacific region is at 80 percent.
Meanwhile, of the bottom 40 percent of the population, only 34 percent of Filipino adults have an account. The Bangko Sentral ng Pilipinas set the target for bank account holders this year at 70 percent.
“Financial inclusion can be a key enabler to speed up poverty reduction and strengthen recovery from the pandemic,” Diop said.
The director added: “Filipinos who have accounts with financial institutions like banks will have opportunities to use other financial services, such as credit and insurance, to start and expand businesses, invest in education or health of their children, manage risks, and weather financial shocks, which can improve the overall quality of their lives."
The loan is meant to bolster our local catastrophe insurance market, as well. What this should ideally do is protect families, assets, and businesses against natural disasters. This should allow the government to dedicate fiscal resources for the underprivileged.
Things like improving our digital technologies, boosting credit information infrastructure for MSME access, and building consumer trust in the financial sector are part of the focal points under the loan's approval, as well.
