ADB Approves $500 Million Loan to Support Reforms in Philippine Agriculture Sector

The ADB has provided the Government of the Philippines with a $500 million policy-based loan in an effort to enhance the agricultural sector and food security.

FREMONT, CA: In an effort to offer economic opportunities in agriculture and improve food security in the Philippines, the Asian Development Bank (ADB) has approved a $500 million policy-based loan to its government.

The new loan enables unconditional cash transfer to smallholder rice farmers and provides concessional funding to fishery-based micro and small enterprises, smallholder farmers, and fisherfolk who are recovering from COVID-19 and other credit assistance programs. The country’s rice sector is financed through the Rice Competitive Enhancement Fund, as provided by the government.

The loan also supports Subprogram 2 of the Competitive and Inclusive Agriculture Development Program. This program aids in the further development of the agricultural sector by implementing trade policy and regulatory framework reforms. In addition, it aims to improve the financials and public services for the sector, and also provide social protection to rural families impacted by the program’s reforms.

Subprogram 2 upholds the policy measures established in the first subprogram, which was approved in 2020. These recently established policy measures are oriented toward the Philippine Development Plan, 2023-2028. The new program is constructed on the rice trade liberalisation present under subprogram 1 and supports effective rice buffer stock management for relief programs and emergencies, ensuring food security.

The second subprogram will also strengthen government assistance to the agricultural sector, as the program will support the government to improve the planning and management of water resources and land usage. This provides sufficient funds to boost the competitiveness of the Philippine rice industry under a liberalised trade regime.

About ADB

The ADB was established in 1966 and is owned by 68 members. The bank aims to achieve sustainable, inclusive, resilient, and prosperous goals in Asia and the Pacific. It also maintains its objective to eradicate extreme poverty in these regions. ADB provides policy-based and project investment loans. The policy-based loans are provided as a part of the national budget and the government allocates funds from these loans to finance the policy reforms.

ADB has been involved in the Philippines’ agricultural, rural development, and natural resources sectors for an extended period of time, and will continue to do so. In the present climate, the bank is undertaking other projects to help the agricultural sector become more robust. These projects include the Integrated Flood Resilience and Adaptation Project, Mindanao Irrigation Development Project, and the Mindanao Agro-Enterprise Development Project.