ADB approves $500 million loan for Philippine agricultural sector

MANILA, Philippines —  The Asian Development Bank (ADB) has approved a $500-million loan to support the country’s agriculture sector and help achieve food security.

In a statement, the ADB said the policy-based loan would support the Subprogram 2 of the Competitive and Inclusive Agriculture Development Program aimed at promoting trade policy and regulatory framework reforms to further develop the agriculture sector.

In addition, the program seeks to improve public services and finance for the agriculture sector as well as social protection for rural families.

ADB’s policy-based loans serve as development financing in the national budget in support of the government’s policy reform agenda.

“Extreme climate events and economic shocks are exacerbating the struggles of the agriculture sector to raise their productivity,” ADB principal natural resources and agriculture economist for Southeast Asia Takeshi Ueda said.

“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,” he said.

To help ensure food security in the country, the second subprogram, which builds on the policy reforms introduced under the first subprogram approved in 2020, will support effective rice buffer stock management for emergency situations and relief programs.

It will also promote new government initiatives, which include providing unconditional cash transfers to smallholder rice farmers and concessional loans to micro and small enterprises in the sector, smallholder farmers as well as fisherfolk.

The second subprogram will likewise help the government improve planning and management of land use and water resources.

Moreover, it will help ensure there is adequate financing to make the rice industry more competitive under a liberalized trade regime, and strengthen government assistance to the agriculture sector.

Earlier, National Economic and Development Authority Secretary Arsenio Balisacan said the country’s agriculture sector is facing many problems including the need for investments to modernize, as well as governance and institutional issues.

He said the country’s agriculture sector needs to modernize to increase its productivity, which would bring down prices of some food items.

The ADB has long been providing support to the country’s agriculture, natural resources, and rural development sector.

To help the sector become more resilient, the multilateral lender is currently preparing other projects for the country such as the Integrated Flood Resilience and Adaptation Project, Mindanao Irrigation Development Project, and Mindanao Agro-Enterprise Development Project.