The Manila-based Asian Development Bank (ADB) has extended to the Philippines a $400-million loan to be spent on programs and projects that will lift more agriculture workers from poverty by improving the sector’s competitiveness and productivity.
The policy loan for the competitive and inclusive agriculture development program (subprogram 1) was aimed at assisting the Philippine government in expanding “economic opportunities in the farm sector by implementing trade policy and regulatory reforms, enhancing public services and finance to the sector and expanding social protection to rural families,” the ADB said in a statement on Wednesday.
“The Philippines has made tremendous strides in reducing the national poverty rate, but rural poverty remains high because of low productivity and limited crop diversification.
This loan will support the government’s comprehensive suite of policy and regulatory reforms, resolving institutional weaknesses in land and water management, expanding agricultural financing to boost productivity and extending the social safety net to unserved and underserved rural families,” ADB vice president Ahmed M. Saeed said.
The ADB said this loan was supportive of the rice tariffication law, which liberalized rice trade and slashed prices while providing a yearly fund from the collection of import duties on rice to modernize the farm sector.
“The government is also initiating additional reforms in land and water resources … Other reforms supported by the loan include additional assistance to farmers making the transition toward higher value crops and those affected by the COVID-19 pandemic. These include unconditional cash grants and the expanded survival and recovery assistance program for rice farmers to provide zero-interest loans to more than 160,000 small farmers. The program also expands the government’s preschool feeding programs to families to reduce malnutrition and stunting.”
It said the loan would be complemented by upcoming investments to enhance flood risk management in major river basins, improve irrigation efficiency and promote agro-enterprise development.
The ADB noted that while the agriculture sector accounted for about 25 percent of total employment in the Philippines, it “lags behind its counterparts in Southeast Asia in productivity growth and competitiveness.”
“Poverty rates in rural Philippines remain high, as do child malnutrition and stunting. The government has identified agriculture as a priority area for reform under its COVID-19 pandemic economic recovery program, as it seeks to ensure food security and reduce poverty in the country,” it said.