The Asian Development Bank said Friday it approved a $500-million (about P27 billion) policy-based loan to help the Philippine government expand economic opportunities in agriculture while ensuring near- to long-term food security.
It said in a statement the loan would support 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.
ADB principal natural resources and agriculture economist for Southeast Asia Takeshi Ueda said extreme climate events and economic shocks were exacerbating the struggles of the agriculture sector to raise productivity.
“This new loan aims to support the Philippines’ efforts to attain food security by building a competitive and inclusive agriculture sector that is characterized by improved efficiency, enhanced diversity, strengthened climate resilience, and higher farm incomes,” Ueda said.
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 liberalization under subprogram 1, the new program supports effective rice buffer stock management for emergency situations and relief programs to ensure food security in the Philippines. Julito G. Rada
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.
It will also 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 liberalized trade regime and strengthen government assistance to the agriculture sector.
The ADB has a long history of engagement in the Philippine agriculture, natural resources and rural development sector.
The bank said it was preparing other projects to 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.