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ADB approves $400 million loan for Philippines agriculture support
MANILA, Philippines — The Asian Development Bank (ADB) has approved a $400-million policy-based loan for the Philippines to support reforms aimed at improving productivity in the agriculture sector.
The multilateral bank said the Competitive and Inclusive Agriculture Development Program Subprogram 1 would help the government expand 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 Philippines has made tremendous strides in reducing the national poverty rate, but rural poverty remains high because of low productivity and limited crop diversification,” ADB vice president Ahmed Saeed said.
“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.”
The agriculture industry employs a quarter of the country’s labor force and yet the sector lags behind counterparts in other Southeast Asian countries in productivity growth and competitiveness.
ADB noted that poverty rates in rural areas in the country 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.
Among the government reforms supported under the Competitive and Inclusive Agriculture Development Program Subprogram 1 is the 2019 Rice Tariffication Act and the various measures it provides.
The new law removed quantitative restrictions on rice imports and replaced them with a pure tariff system. Using collected duties on imported rice, the government set up the Rice Competitiveness Enhancement Fund to strengthen the rice industry in line with the Philippine Rice Industry Roadmap.
The government is also initiating additional reforms in land and water resources, including irrigation investments.
Other reforms supported by the policy-based loan include additional assistance to farmers making the transition towards the cultivation of 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 pre-school feeding programs to families to reduce malnutrition and stunting.
ADB said the new loan would be complemented by upcoming investments to enhance flood risk management in major river basins, improve irrigation efficiency, and promote agro-enterprise development.
Source: https://www.philstar.com/business/2020/08/14/2035072/adb-approves-400-million-loan-philippines-agriculture-support