The World Bank has approved a $600 million loan for a Philippine reform program to help the Southeast Asian country prepare for a competitive and resilient economic recovery, the bank announced on Saturday.
The Philippines Promoting Competitiveness and Enhancing Resilience to Natural Disasters Sub-Program 3 Development Policy Loan aims to assist in funding the government’s reforms, such as changes to the Retail Liberalization Act to encourage private investment, cost-cutting measures, and the expansion of broadband services to encourage investments in information and communications technology.
Such reforms are critical to removing both short-term and long-term growth barriers, according to Ndiame Diop, the bank’s country director for Brunei, Malaysia, the Philippines, and Thailand.
According to a World Bank official, the reforms are essential to ensuring a more inclusive recovery from the COVID-19 pandemic.
“Reforms that promote competition in broadband and mobile telecommunications will benefit a large portion of underserved populations by increasing coverage and quality of service, increasing their access to markets, as well as access to remote education and health services,” Ndiamé Diop, World Bank country director for Brunei, Malaysia, Philippines and Thailand, was quoted as saying in a World Bank statement released on Saturday.
Almost two years into the COVID-19 pandemic, Filipinos and businesses have been forced to rely on internet connectivity as the government continues to restrict people’s movement in order to reduce the spread of infections.
“Reforms that lower trade costs and improve the business environment will benefit all firms but especially small and medium enterprises, by opening the way to a larger market,” Diop added.
As per the bank, the Philippines lags behind peers in East Asia and the Pacific in terms of direct foreign investment into sectors such as retail, but reforms to the sector could attract investment by leveling the playing field for domestic and foreign operators.
According to the World Bank, the Philippines remains a laggard in attracting foreign investment. However, once the retail trade reforms are in place, they will provide a level playing field for both domestic and foreign investors, resulting in more jobs and an increase in the inflow of new technologies.
The lending program also helps the Philippines achieve its goal of improving its digital infrastructure.