ADB Approves $500M Loan to Enhance Disaster Resilience in the Philippines
The Second Disaster Resilience Improvement Program is a multiyear contingent disaster financing program with the option to replenish the funds twice, subject to approval by the ADB Board.
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The Asian Development Bank (ADB) has approved a $500 million policy-based loan aimed at providing the Philippine government with quick access to financing for disaster response and recovery in the event of natural disasters or health-related emergencies. This program is designed to support ongoing reforms that will boost the country’s disaster resilience, ensuring timely recovery efforts to mitigate the impact of disasters on the economy and people's lives.
Strengthening Disaster Resilience and Response Capacity
The Second Disaster Resilience Improvement Program is a multiyear contingent disaster financing program with the option to replenish the funds twice, subject to approval by the ADB Board. Renewals are allowed if there are unused funds following the initial 5-year term.
“The Philippines is one of the fastest growing economies in Southeast Asia but is at high risk for earthquakes, volcanic eruptions, typhoons, rising sea levels, and flooding,” said Pavit Ramachandran, ADB Country Director for the Philippines. “With this program, we aim to help boost the country’s capacity for disaster risk reduction and management (DRRM) nationally and locally, including for state-owned and controlled corporations; strengthen DRRM policies and frameworks; and attain long-term resilience to lessen the impact of disasters, especially for the most vulnerable sectors.”
Addressing the Philippines' High Disaster Risk
According to the World Risk Report 2024, the Philippines ranks as the highest in disaster risk among 193 countries. At least 60% of the country’s land area is exposed to multiple hazards, and nearly three-fourths of the population is at risk from these threats. The country experiences at least 20 typhoons annually and an average of 150 earthquakes of at least magnitude 4 each year.
Key Program Objectives
The new program will focus on the following key objectives:
- Harmonizing DRRM planning processes across national, provincial, and city levels, integrating disaster risk reduction into the broader public financial management (PFM) reforms.
- Incorporating gender equity, disability, and social inclusion into DRRM plans to ensure the most vulnerable communities are supported.
- Enhancing the disaster response capabilities of state-owned corporations, ensuring they are better equipped to support recovery efforts.
- Introducing additional sources of financing, such as a voluntary city parametric disaster insurance scheme, which enables faster payouts for damages caused by earthquakes, typhoons, and other natural hazards.
Building on Previous Reforms and Past ADB Support
This new program builds on the achievements of the first Disaster Resilience Improvement Program, as well as ADB’s past assistance in climate and disaster resilience. Notably, ADB has supported initiatives like the Comprehensive and Integrated Delivery of Social Services (KALAHI-CIDSS) program, which addressed post-disaster recovery needs at the community level.
The program also complements ADB’s Integrated Flood Resilience and Adaptation Project (Phase 1), which is helping local government units (LGUs) prepare and implement disaster risk management plans to reduce their vulnerability to floods and other disasters. Additionally, it strengthens efforts outlined in the Climate Change Action Plan Subprograms 1 and 2, which focus on implementing national climate policies and scaling up climate adaptation and mitigation projects at both national and local levels.
A Critical Part of ADB's Ongoing Support to the Philippines
The program represents a central component of ADB’s ongoing support to the Philippines in its efforts to improve disaster resilience and sustainable recovery. By enhancing disaster preparedness and risk financing mechanisms, the Philippines will be better equipped to respond to future disasters while building a more resilient economy and society.
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