The Asian Development Bank (ADB) has approved a $500 million policy-based loan to enable swift access to financial resources for the Philippines during natural disasters or health crises. This financing aims to support reforms that bolster resilience, streamline response and recovery efforts, and mitigate the adverse effects of disasters on the economy and the lives of Filipino citizens.
The Second Disaster Resilience Improvement Program is a multiyear, contingent disaster financing initiative that allows for the option to replenish the facility twice, subject to ADB Board approval. If unutilized funds remain after the initial 5-year period, these loan renewals are available.
“The Philippines stands as one of the fastest-growing economies in Southeast Asia but faces significant risks from earthquakes, volcanic eruptions, typhoons, rising sea levels, and flooding,” said ADB Country Director for the Philippines Pavit Ramachandran.
“Through this program, we aim to fortify the country’s disaster risk reduction and management (DRRM) capabilities at both national and local levels, including state-owned and controlled corporations; enhance DRRM policies and frameworks; and achieve long-term resilience to reduce the impact of disasters, especially on the most vulnerable sectors.”
In 2024, the World Risk Report ranked the Philippines highest in disaster risk among 193 economies. Approximately 60% of its total land area is prone to multiple hazards, with nearly three-fourths of its population vulnerable to these risks. The country experiences around 20 typhoons and an average of up to 150 earthquakes of at least magnitude 4 each year.
The new program focuses on harmonizing DRRM planning processes across national, provincial, and city levels while integrating DRRM into national public financial management (PFM) reforms, as outlined in the PFM roadmap developed with ADB’s assistance. Additionally, it seeks to incorporate gender equity, disability, and social inclusion in DRRM plans; improve the disaster response service delivery of state-owned or controlled corporations; and provide supplementary risk financing options, including a voluntary city parametric disaster insurance scheme that offers expedited payouts for damages from earthquakes, typhoons, and other disasters.
This program is a core component of ADB’s efforts to support the Philippines in building disaster resilience. It builds on the accomplishments of the first Disaster Resilience Improvement Program and leverages ADB’s past assistance in climate and disaster resilience, such as the Comprehensive and Integrated Delivery of Social Services (KALAHI-CIDSS) program, which addressed the post-disaster needs of local communities.
Moreover, the program complements ADB’s Integrated Flood Resilience and Adaptation Project (Phase 1), which assists in preparing and implementing DRRM plans to reduce vulnerabilities of selected local government units (LGUs). It also builds on the Climate Change Action Plan Subprograms 1 and 2, which support the implementation of national climate policies and amplify climate adaptation and mitigation efforts at both the national and local levels.
