The bank said the Philippines First Financial Sector Reform Development Policy Financing loan is the first of two programs supporting three reform areas, including strengthening financial sector stability, integrity, and resilience, reports Xinhua news agency.
The loan will also expand financial inclusion for individuals and firms and promote disaster risk finance that protects national budgets and businesses and the lives and livelihoods of families from the impacts of disasters, the bank added.
"The health crisis, the economic impact of containment measures, and the global slowdown have increased the urgency for reforms, not only to ensure financial sector stability or financial inclusion, but also to support economic recovery and minimise the impact of future shocks particularly on poor and vulnerable segments of the population," Ndiame Diop, World Bank Country Director for Brunei, Malaysia, Philippines and Thailand, said in a statement.
In addition to providing timely financial resources to support government financing needs, Diop said the financial sector reforms supported under this loan "will help meet the immediate needs of individuals and micro, small and medium enterprises under strain".
The bank said the new lending is a development policy loan (DPL) which provides quick-disbursing assistance to countries undertaking reforms.
DPLs typically support policy and institutional changes needed to create an environment conducive to sustained and equitable growth, as the borrower countries' development agenda defines.
Among the policy reforms supported by this DPL to enhance the stability, integrity, and resilience of the financial sector are measures addressing legal, regulatory and supervisory issues to improve prudential supervision of banks by the Bangko Sentral ng Pilipinas, bringing insurance legislation in the Philippines in line with global standards, and ensuring long-term availability of credit to small and medium enterprises.