MANILA - The Asian Development Bank on Friday said it has approved a $500 million (P27.2 billion) policy-based loan to help the Philippines expand opportunities in agriculture while ensuring near to long-term food security.
In a statement, the ADB said the loan would support the Subprogram 2 of the Competitive and Inclusive Agriculture Development Program, which aims to develop the sector through trade policy and regulatory framework reforms.
It also aims to enhance public services and finance for the sector as well as social protection for rural families, the Manila-based multilateral lender said.
“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 characterized by improved efficiency, enhanced diversity, strengthened climate resilience, and higher farm incomes.”
The ADB said the new loan promotes new government initiatives, including the provision of unconditional cash transfers to rice farmers and loans to small agriculture and fishery-based small firms, farmers and fisherfolks who are recovering from the COVID-19 pandemic.
The subprogram will also support the government in enhancing the planning and management of land use and water resources, it added.
The ADB said policy-based loans are provided by ADB as development financing in the national budget in support of the government's policy reform agenda.
National Economic and Development Secretary Arsenio Balisacan said there are a lot of opportunities for improvement in the agriculture sector. He said boosting production is among the priorities as supply constraints, such as in select food items and vegetables, pushed inflation to 8.1 percent in December 2022.
Although the Philippine economy grew faster than anticipated at 7.6 percent in 2022, Balisacan said it could have been higher if inflation wasn't elevated.