Announcement of World Bank Assists Philippines' Earthquake-Reconstruction Efforts on October 11, 1990

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. *Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 91/18 Contact: Pastor Sison (202) 458-0344 Leandro V. Coronel (202) 458-1354 Z WORLD BANK ASSISTS PHILIPPINES' EARTHQUAKE-RECONSTRUCTION EFFORTS L4(* Ulno WASHINGTON, October 11, 1990 -- The World Bank has approved a $125 million loan 00 to support the Philippines' efforts to rebuild infrastructure and homes destroyed by a major earthquake on Luzon Island on July 16, 1990. The earthquake had a magnitude of 7.7 on the Richter scale and affected an area of about 100,000 square kilometers centered near Cabanatuan City, some 60 miles north of Manila. At least 1,700 people died, 3,500 were injured, and 700 are still missing. More than 24,000 houses were destroyed. Damage to homes and infrastruc- ture--roads, bridges, ports, schools, hospitals and government buildings--has been valued at an'estimated $600 million. Damage to agriculture, private buildings, mining and tourism is still being assessed by the Philippine government. The goverment formulated a three-stage program to cope with the disaster. The first stage focused on immediate rescue and relief actions. The second stage con- centrated on putting vital infrastructure back into service, and the third stage consists of longer-term restoration of affected structures, facilities and services. The reconstruction project is concentrated on rebuilding roads and bridges, housing, medical facilities and irrigation. It includes proposed revisions to local building codes, improvements in technical expertise in earthquake-resistant cons- truction, and re-establishment of a network of seismic-monitoring instruments across the country. The World Bank sent its resident representative in Manila, a highway engineer and a ports consultant one day after the earthquake to assess the situation for a possible reconstruction loan. Another team of Bank staff visited the area less than one month later. The $125 million loan includes $25 million in retroactive financ- ing for the removal of debris, opening of roads and bridges, temporary hospitals and medical facilities, and purchase of essential construction materials. Undisbursed balances of six earlier World Bank loans to the Philippines may be used by the gov- ernment to finance reconstruction-related efforts in the areas of education, munici- pal development, port facilities, energy supply, irrigation and housing. Other financing for the $182.7 million project will be provided by the govern- ment, which is also seeking assistance from various external sources for a $600 million overall reconstruction program. The $125 million World Bank loan is for 20 years, including five years' grace, with a variable interest rate, currently 7.72 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.25 percent on the undisbursed balance. NOTE: Money figures are expressed in U.S. dollar equivalents.