THE Asian Development Bank (ADB) on Wednesday said it has approved a $400-million (P19.576-billion) loan to support Philippine government’s reforms that aim to improve competitiveness of the agriculture sector and reduce poverty in rural areas.
In a statement on Wednesday, the multilateral lender said the Competitive and Inclusive Agriculture Development Program will help the government implement trade policy and regulatory reforms for agriculture, enhance public services and finance to the sector, and expand the social protection to rural families.
One of the reforms supported by the policy-based loan is the Rice Tariffication Law that lifted the quantitative restrictions on rice imports, while imposing higher tariffs to fund the sector’s mechanization.
“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 M. Saeed was quoted as saying.
The funds will also be used to support financial assistance to farmers affected by the coronavirus pandemic and those that will transition to higher value crops. The programs include unconditional cash grants and zero-interest loans to over 160,000 small-scale farmers.
The loan will also expand the public feeding programs among preschool students in an effort to reduce malnutrition.
The ADB said the new loan will be complemented by the bank’s future investments on flood risk management in major river basis, improvement of irrigation systems, and promotion of agro-enterprise development.
Supporting the agriculture sector is part of the government’s recovery program from the coronavirus-induced crisis to ensure food security and reduce poverty, the ADB said.
The bank said the Philippines’ agriculture sector, which employs a quarter of the total labor force, “lags behind” its Southeast Asian peers in terms of productivity growth and competitivenes.
It said poverty incidence in rural communities across the country “remains high, as do child malnutrition and stunting.”
The multilateral bank has set a $4.2-billion lending program to the Philippines this year, with the majority going to the country’s response to the ongoing pandemic.
As of Aug. 5, the government has secured $8.131 billion from a mix of loans and grants from external sources to fund its pandemic expenses, of which $2.6 billion were from the ADB. — Beatrice M. Laforga