The Philippines has secured a $1-billion loan from the World Bank — its largest for agriculture to date — to accelerate reforms aimed at boosting productivity, strengthening food security and making the sector more resilient to climate and global shocks.

The financing will support the government’s Philippines Sustainable Agricultural Transformation (PSAT) program, a wide-ranging initiative designed to modernize farming systems, improve supply chains and raise farmers’ incomes.

The World Bank said the project is expected to benefit at least five million Filipino farmers, with interventions focused on improving yields, expanding market access and upgrading logistics.

Transformative investment

“This is a transformative investment in Philippine agriculture,” said World Bank Division Director Zafer Mustafaoğlu, adding that the program will make the sector “more productive, competitive, and climate smart.”

“Farmers will be better equipped to earn more, withstand climate shocks, and bring safer, more affordable food to Filipino households,” he added.

The program will introduce climate-smart technologies, including improved seeds, better nutrient management and water-efficient systems, while promoting diversification into higher-value crops, livestock and aquaculture. It will also expand mechanization and reduce post-harvest losses — long-standing bottlenecks in the sector.

Digital voucher system

A digital voucher system will be rolled out to speed up the delivery of farm inputs and improve transparency, linking government support more directly to measurable gains in output and income.

The financing is structured as a program-for-results facility, meaning disbursements will be tied to the government’s achievement of reform targets, including improvements in productivity, institutional capacity and service delivery.

World Bank officials said the initiative will also strengthen the Department of Agriculture’s systems, including budgeting, procurement and data management, to improve efficiency and accountability.

Global risks putting pressure on food and energy

The loan comes at a time when global risks — including supply disruptions linked to tensions in the Middle East — are putting pressure on food and energy markets. The World Bank has recently warned that economies like the Philippines must invest in resilient food systems and supply chains to cushion against external shocks and rising commodity prices.

The multilateral lender has also pledged accelerated support for member countries — including the Philippines — as the Middle East crisis continues to dampen near- and long-term economic prospects.