The World Bank has approved a new $600 million loan that aims to support the Philippines’ economic recovery from the coronavirus pandemic.
In a statement, the Washington-based multilateral institution said it had approved funding for the government’s reform program to position the country for a more competitive and resilient economic recovery. The sub-programme’s development policy loan supports ongoing government reforms, including amendments to the Retail Trade Liberalization Act.
The new law aims to promote private investment, reduce the cost of doing business and expand broadband services to promote investment in information and communications technology.
Ndiamé Diop, World Bank country director for the Philippines, said these reforms are crucial to overcoming immediate and long-term obstacles to growth, paving the way for an inclusive recovery.
“Reforms that promote competition in broadband and mobile telecommunications will benefit large portions of underserved populations by increasing coverage and quality of service, increasing their access to markets, as well as access to distance education and health,” Diop said.
Internet access has been critical during the pandemic as employed people shifted to working from home and school-aged children relied on remote learning.
“Similarly, reforms that reduce trade costs and improve the business environment should benefit all businesses, but especially small and medium-sized enterprises, which will have access to a wider market for their products and services,” added Diop.
The Philippines lags behind its peers in the East Asia and Pacific region in terms of foreign direct investment inflows, including in the retail sector.
Reforms in the retail sector should encourage investment by leveling the playing field between domestic and foreign operators, thereby creating jobs, expanding consumer choices and increasing the influx of new technologies.
This new loan is a Development Policy Loan (DPL) that provides fast-disbursing assistance to countries undertaking reforms.
DPLs generally support the policy and institutional changes needed to create an environment conducive to sustained and equitable growth as defined by the borrowing countries’ own development agenda.
Support for building community resilience through better digital infrastructure is also part of this new lending program.
“The government has introduced the Philippine Identification System or PhilSys as a digital identification platform to foster the digital economy and increase access to public services,” said Rong Qian, senior economist at the World Bank. .
“This is expected to increase access and improve the delivery of public services by providing Filipinos with a unique and verifiable digital identity,” Qian added.
Filipinos can use this fundamental ID for major public and private transactions, including opening bank accounts, identifying and verifying welfare recipients, and paying pensions by 2022. Qian added.
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