The Department of Finance (DOF) will draw this week $80 million (about P4 billion) of the World Bank (WB)'s $500-million standby credit line extended to the Philippines to support the national government’s disaster relief and rehabilitation efforts in provinces devastated by typhoon “Odette.”

Finance Secretary Carlos Dominguez III said the WB’s Fourth Disaster Risk Management Development Program with a Catastrophic Deferred Drawdown Option will provide the government immediate access to funds for its ongoing efforts to aid recovery of typhoon ‘Odette’-hit areas.

"This week, the DOF will draw $80 million from the World Bank disaster financing loan to fund the amount with cover in the 2021 budget," Dominguez said.

He said the Philippine government will draw another $120 million from the same WB standby loan facility in the first week of January when the loan cover will be available in the 2022 national budget.

Dominguez issued the statement in response to the calls of Senate Minority Leader Franklin Drilon and Senator Juan Edgardo Angara for the government to do a cash sweep of undisbursed funds and savings in the state coffers to provide funds for the relief and reconstruction efforts in "Odette"-hit areas.

A presidential declaration of a state of calamity or a public health emergency is required to trigger the release of the funds available under the $500 million WB standby loan facility.

President Rodrigo Duterte declared on Dec. 21 a state of calamity in six "Odette"-battered areas: Regions 4B (Mimaropa–Mindoro, Marinduque, Romblon and Palawan), 6 (Western Visayas), 7 (Central Visayas), 8 (Eastern Visayas), 10 (Northern Mindanao) and 13 (Caraga).

The DOF said the World Bank facility aims to strengthen the Philippines’ institutional capacity to manage risks from climate change, natural disasters and disease outbreaks.

This standby loan facility was approved by the WB Board on Nov. 17, and the loan agreement for this facility was signed between the WB and the Philippines, represented by the DOF, on Nov. 29.

Net of a 0.5 percent front-end fee, the World Bank facility has an available balance of US$497.5 million as of December this year.

This forms part of the Philippines’ Disaster Risk Financing Insurance (DRFI) strategy, which aims to maintain sound fiscal health at the national level, develop sustainable financing mechanisms for local government units (LGUs) and reduce the impact on the poorest and most vulnerable, the DOF said.

In 2018, the Philippines triggered the release of funds under the WB’s $500-million CAT-DDO2 to help finance disaster relief and reconstruction efforts in provinces in Luzon battered by typhoon “Ompong.” DOF