Bank loan

Philippines secures $ 400 million loan from World Bank for financial sector reforms


REUTERS

The World Bank has approved a new loan of $ 400 million for the Philippines that will be used to support financial sector reforms as the country recovers from the pandemic.

The First Financial Sector Reform Development Policy Finance Loan is the first of two World Bank programs aimed at strengthening the stability of the country’s financial sector and expanding the financial inclusion of businesses and individuals. It also aims to promote disaster risk financing that will ultimately benefit the national budget, businesses and lives.

“In addition to providing timely financial resources to meet the government’s financing needs, the financial sector reforms supported under this loan will meet the immediate needs of individuals and micro, small and medium enterprises under pressure. », Ndiame Diop, World Bank Country Director for Brunei. , Malaysia, the Philippines and Thailand, said in a statement.

Mr Diop said that a strong and inclusive financial sector would be crucial support for economic recovery from the pandemic.

“The health crisis, the economic impact of containment measures and the global slowdown have increased the urgency of reforms, not only to ensure financial sector stability or financial inclusion, but also to support economic recovery and minimize the impact of future shocks, especially on the poor. and vulnerable segments of the population, ”he said.

The World Bank loan will support reforms aimed at improving the capacity of Bangko Sentral ng Pilipinas to supervise lenders; align local insurance laws with global standards; and ensuring the long-term availability of loans for small businesses.

It will also support programs aimed at boosting financial inclusion and the digitization of financial services.

“Using financial technology to improve access to finance for small and medium-sized businesses will help address pressing liquidity issues, thereby limiting closings and bankruptcies and preventing widespread layoffs,” Mr. Diop said.

At the same time, the loan will also be used to support the establishment of public-private partnerships to provide inclusive access to disaster risk insurance for businesses as they adapt to the impact of climate change. disasters induced by climate change.

The World Bank loaned the government $ 3.67 billion as of April 8, based on data from the Ministry of Finance. – LWTNoble


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