PH To Sign Record $1-B World Bank Loan For Agriculture

The Philippine government is set to sign a record-high $1 billion (over ₱57 billion) loan agreement with the World Bank this July to fund the country’s sustainable agricultural transformation program, the Department of Agriculture (DA) has announced.

PSAT will drive key developments in agriculture and fisheries, uplifting the lives of millions of Filipinos who depend on these sectors for their livelihood. I Photo: Philippine Information Agency

Agriculture Secretary Francisco Tiu Laurel said he recently met with World Bank Country Director Zafer Mustafaoglu to review the deal’s progress. Mustafaoglu reaffirmed the bank’s commitment to financing the Philippine Sustainable Agricultural Transformation (PSAT) loan program.

According to a document published on the World Bank’s website, the PSAT program is projected to cost $20 billion (over ₱1.1 trillion).

Of this amount, the Philippine government will shoulder $11.895 billion (over ₱683 billion) of the $12.8975 billion (over ₱741 billion) operation cost.

With the World Bank’s $ 1 billion loan, this leaves a financing gap of $2.5 million. The World Bank disclosed last year that its board is scheduled to approve the loan on June 5, with the formal signing between both parties planned for July.

The DA noted that the signing event is expected to coincide with the fourth State of the Nation Address (SONA) of President Ferdinand R. Marcos Jr.

Once signed, PSAT will mark the Philippines’ first project under the World Bank’s Program-for-Results (PforR) financing framework. The program will run for five years, with operations set to launch in August.

The Department of Finance (DOF), responsible for managing the government’s financial resources, will borrow on behalf of the DA, the program’s implementing agency.

Secretary Laurel emphasized that the DA-led program aims to significantly boost the country’s agri-fishery sector through targeted support for agri-food systems. This includes climate-responsive strategies, policy reforms, diversification, and enhanced fiscal management.

He assured that the DA will continue to collaborate with the World Bank to ensure the timely execution of PSAT.

“PSAT aims to improve the efficiency of government spending while ensuring sustainable outcomes by building institutional capacity and strengthening governance,” Laurel stated.

“This multiyear loan from the World Bank will provide us with the critical resources needed to advance the government’s food security agenda and promote sustainable agriculture,” he added.

He further noted that PSAT will drive key developments in agriculture and fisheries, uplifting the lives of millions of Filipinos who depend on these sectors for their livelihood.