World Bank extends $500m disaster mitigation fund to Philippines

Manila: World Bank Group president Robert B. Zoellick extended $500 million disaster mitigation fund to the Philippines following the success of President Benigno Aquino's push for good governance and cash dole-out program to poor families to reduce poverty.

In a meeting with Aquino, Zoellick pledged a $500 million rapid response contingent line of credit that the Philippine government can use for emergency relief and recovery after a major disaster.

Apart from that, the Philippine government also received a grant of $2 million from the Global Facility for Disaster Reduction and Recovery, which will provide access to the global best practices on disaster risk reduction, said Zoellick.

Praising the Philippine government for mitigating disasters, Zoellick said, "I am impressed with the resilience the country has exhibited to recent external shocks, including the impact of typhoons and the El Niño effect."

Citing the Philippines strong financial system, trade resources, and economic fundamentals, Zoellick said all of these "have helped cushion the impact of the global economic turmoil on the local economy".

In response to World Bank's assistance, President Aquino told Zoellick, "The World Bank has been a valued partner in our government's efforts to achieve inclusive and sustained economic growth."

At the same time, Zoellick praised Aquino's push for good governance and poverty reduction project.

"My visit has helped me better understand the importance of President Aquino's program for good governance and the government's priorities to increase investments in health, and education, and protect the most vulnerable people," Zoellick said, following a visit to a slum community in Pasay City's Kalayaan village, where residents have been recipients of Aquino's conditional cash transfer (CCT) program, also called Family Extensions (Pantawid Pamilya).

"It was heartening to hear women speak about their commitment to meet the requirements to send their children to school and to seek health care for their families," Zoellick said, adding that empowering poor people is inextricably intertwined with good governance.

World Bank's $405 million social welfare and development reform fund has been supporting Aquino's poverty reduction program, which is undertaken by the Department of Social Welfare and Development.

Aquino's program has increased poor people's annual incomes by an average of 12.6%, reduced incidence of poverty by six percent, according to a World Bank study.

Aquino's project will cover 2.3 million by the end of 2011, representing 62 per cent of poor people in the Philippines.

Zoellick was accompanied by Social Welfare Secretary Corazon Soliman to meet the beneficiaries of Aquino's program of extending cash to parents who send their children to schools and health centres.

In a meeting with Philippine Finance Secretary Cesar Purisima, Zoellick said that higher public spending, especially in infrastructure and human capital investment, is urgent in the Philippines.

World Bank is willing to extend assistance to jump-start the government's Public-Private Partnership (PPP) program, which is based on the country's build-operate-transfer investment scheme offered to the private sector.

Government spending in the Philippines will be accompanied by financial prudence to cushion the economy from external shocks, Purisima assured.