The Asian Development Bank (ADB) has recently approved a US$500 million policy-based loan to help the Philippine government expand economic opportunities in the country’s agriculture sector while ensuring near- to long-term food security for the Filipino 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 Takeshi Ueda, ADB Principal Natural Resources and Agriculture Economist for Southeast Asia.
“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 added.
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, 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 the planning and management of land use and water resources, thereby ensuring adequate financing to help enhance the competitiveness of the country’s rice industry under a liberalized trade regime, and further strengthening government assistance to the agriculture sector.
A long history of engagement in the Philippines
ADB has had a long history of engagement in Philippine agriculture, natural resources, and the 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 the 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, ADB is currently owned by 68 members, 49 of which are from the region. ADB assists its members and partners by providing loans, technical assistance, grants, as well as equity investments to promote social and economic development. It maximizes the impact of its assistance by facilitating policy dialogues, providing advisory services, and mobilizing financial resources through cofinancing operations that tap official, commercial, and export credit sources.