The policy-based loan will allow the Philippines quick access to emergency financing "to quickly address the needs of vulnerable segments of the population following disasters," said Benita Ainabe, a financial sector specialist at the Manila-based bank.
"It will also strengthen the Philippines' overall response to disasters and pandemics," she added.
Located in the Pacific Ring of Fire, the Philippines is among the most disaster-prone countries in the world, with active volcanoes, frequent earthquakes and an average of 20 cyclones a year, causing floods and landslides.
Nearly three-quarters of the country's population is vulnerable to multiple disasters, which worsen poverty in typhoon-prone provinces along the country's eastern seaboard, the ADB noted.
"Disasters cost the Philippines 0.7 per cent to 1 per cent of gross domestic product every year, including about 43.5 billion pesos (US$890 million) caused by earthquakes and around 133 billion pesos (US$2.7 billion) from typhoons," it added.
Among the recent major disasters that hit the Philippines are Super Typhoon Haiyan in 2013, which killed more than 6,300 people and displaced more than 4 million people, and the eruption of the Taal Volcano near Manila in January, displacing more than 230,000 people.
The financing could also help the government in managing economic and social shocks caused by emergencies, including the ongoing coronavirus pandemic, which triggered a lockdown that closed 75 per cent of the economy. - dpa
Did you find this article insightful?