The Asian Development Bank (ADB) has approved a US$500 million policy-based loan to help the Government of the Philippines expand economic opportunities in agriculture while ensuring near- to long-term food security for the population.
The loan supports Subprogram 2 of the Competitive and Inclusive Agriculture Development Program, which aims to further develop the agriculture sector with trade policy and regulatory framework reforms. It also seeks to enhance public services and finance for the sector, and social protection for rural families affected by the program’s reforms.
“Extreme climate events and economic shocks are exacerbating the struggles of the agriculture sector to raise their productivity,” said ADB Principal Natural Resources and Agriculture Economist for Southeast Asia Takeshi Ueda. “This new loan aims to support the Philippines’ efforts to attain food security by building a competitive and inclusive agriculture sector that is characterised by improved efficiency, enhanced diversity, strengthened climate resilience, and higher farm incomes.”
The second subprogram continues support for policy measures introduced in the first subprogram approved in 2020. Those policy measures are aligned with the recently launched Philippine Development Plan, 2023–2028. Building on the rice trade liberalisation under subprogram 1, this new program supports effective rice buffer stock management for emergency situations and relief programs to ensure food security in the Philippines.
The new loan promotes new government initiatives, including the provision of unconditional cash transfers to smallholder rice farmers and concessional loans to agriculture- and fishery-based micro and small enterprises and smallholder farmers and fisherfolk under Covid-19 recovery and other credit assistance programs. The government provides substantive financing through the Rice Competitive Enhancement Fund to strengthen the country’s rice sector.
In addition, the second subprogram will support the government in further enhancing planning and management of land use and water resources, ensure adequate financing to enhance the competitiveness of the country’s rice industry under a liberalised trade regime, and strengthen government assistance to the agriculture sector.
ADB has a long history of engagement in the Philippine agriculture, natural resources, and rural development sector. The bank is currently preparing other projects that will help the sector become more resilient such as the Integrated Flood Resilience and Adaptation Project, Mindanao Irrigation Development Project, and Mindanao Agro-Enterprise Development Project.
Policy-based loans, as against project investment loans, are provided by ADB as development financing in the national budget in support of the government’s policy reform agenda.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.