MANILA - The Asian Development Bank said Thursday it approved a $500 million (P24.2 billion) policy-based loan to allow the Philippines quick access to emergency financing in times of disasters or public health emergencies.

“This new contingent disaster financing instrument will help the government manage fiscal risks posed by those shocks and lessen the economic and social impacts on people’s livelihoods and the country’s economy," said ADB vice-president Ahmed Saeed in a statement.

The program will support pending legislations in Congress that aims to merge functions of the National Disaster Risk Reduction and Management Council and the Office of the Civil Defense under a new department, the ADB said.

It also supports reforms to make climate change adaptation and disaster risk reduction a part of comprehensive development plans for LGUs, it said. The ADB said the fund will help local governments improve pandemic preparedness.

A "pilot disaster insurance scheme," which is a first in Southeast Asia, will also be part of the program, it said.

The Philippines is among the most "disaster-prone" countries in the world since it is located in the Pacific ring of fire, the lender said.

In early 2020, the Taal Volcano eruption disrupted livelihood in Southern Luzon, followed by the COVID-19 pandemic, it said, adding an average of 20 typhoons hit the country every year causing floods and landslides.

Disasters cost the country some 0.7 percent to 1 percent of its gross domestic product (GDP) every year, including P43.5 billion caused by earthquakes and P113 billion from typhoons, the bank said.

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