World Bank Approves Loan of USD 600M To Aid Philippines' Economic Recovery, financial sector

The World Bank has approved a $600 million loan to help the Philippines' economic recovery and efforts to strengthen its financial sector.

The funds will be used to strengthen its financial sector stability, expand financial inclusion, and improve disaster risk financing, according to a statement from the multilateral bank.

"Financial inclusion can be a key enabler to speed up poverty reduction and strengthen recovery from the pandemic," said Ndiamé Diop, World Bank country director for Brunei, Malaysia, Philippines and Thailand.

According to World Bank data, only half of Filipinos aged 15 and up have a transaction account with a financial institution, which is lower than the East Asia and Pacific regional average of 80%.

The Philippine central bank hopes that by this year, 70% of Filipino adults will have a bank account.

According to the World Bank, the loan will also help to develop a catastrophe insurance market in the Philippines, preventing people from falling into poverty as a result of natural disasters.

Every year, the Philippines, an archipelago of more than 7,600 islands, is hit by an average of 20 tropical storms, which cause deadly landslides and flash floods, as well as the destruction of crops and infrastructure. Because it is located on the seismically active Pacific "Ring of Fire," it is also prone to earthquakes.