Next year, the World Bank will extend to the Philippines its largest-ever loan aimed at promoting climate-resilient agri-food systems, especially of the Filipino staple food rice.
Now with a total of eight pending loans up for approval by the Washington-based multilateral lender, the Philippines' borrowing pipeline rose to over $4.169 billion--equivalent to more than P242 billion—for the current as well as the next World Bank fiscal years.
The World Bank disclosed on Dec. 6 that its board is scheduled to approve on June 5, 2025, the $1-billion (over P58-billion) program-for-results financing (PforR) for the Philippines Sustainable Agriculture Transformation project.
The Department of Finance (DOF) shall borrow on behalf of the Department of Agriculture (DA), the project's implementing agency.
The World Bank document indicated that this DA-led project would entail a total cost of $20 billion (more than P1.16 trillion), of which the government shall shoulder $11.895 billion (almost P691 billion) out of the $12.897.5-billion (over P749-billion) operation cost.
The World Bank loan will augment the financing requirement for program operation, even as there remains a $2.5-million financing gap.
This forthcoming loan's objective of fostering food and nutrition security plus climate change-resiliency will target efficient government resource use, enhanced diversification, as well as increased productivity in the agriculture sector.
This financing shall be a PforR instrument, "a natural progression to elevate [the World Bank's] support to the next level of sectoral transformation in the Philippines by strengthening the government’s own programs and institutional delivery mechanisms," the document read.
"The PforR would particularly focus on the country's rice-based cropping systems. This encompasses 1.9 million hectares (ha) and some three million farmers, which represent 37 percent of the country's farmers and fisherfolk," the World Bank said.
As a PforR, this upcoming loan sets itself apart from the usual development policy financing (DPF) and investment project financing (IPF) schemes that the Philippines avails from the World Bank.
In particular, this program aims to achieve the following specific goals: diversify crops; hike the number of farmers who use climate-smart practices and technologies; increase productivity; and jack up volumes of agricultural products sold at farmgate (as a proxy for farmers' incomes) as well as of select perishable goods that benefit from improved post-harvest handling and storage, the World Bank document said.
"The agricultural sector in the Philippines has high potential for contributing to the country's socioeconomic development agenda... However, the country has not been able to develop its full agricultural potential," the World Bank lamented, citing that "ineffective and inefficient sector policies and spending decisions have hindered agricultural growth."
Also, "a complex, fragmented institutional and regulatory system has further stymied sector development and disincentivized private-sector investments in the country's agri-food systems," the World Bank said, such that "the sector suffers high levels of farm and post-harvest losses that have significant implications for food and nutrition security and incomes."
It did not help that "climate change poses considerable challenges to the development" of the domestic agriculture sector, while the local agri-food industry itself is "also a potential contributor to the effects" of climate risks.
As such, the upcoming World Bank loan shall be aligned with the Philippines' commitments under the Paris Agreement of 2015 as well as its Nationally Determined Contributions (NDCs) in 2021, alongside the DA's own centerpiece four-year agriculture-sector transformation plan under the "Para sa Masaganang Bagong Pilipinas" 2024-2027.
Based on the latest updated documents reviewed by Manila Bulletin, the World Bank is expected to approve five other Philippine loans during the current 2025 fiscal year, which began last July 1, 2024, and will end on June 30, 2025.
The World Bank would green-light in February of next year the $496-million Health System Resilience Project, $456-million Mindanao Transport Connectivity Improvement Project, as well as $67.34-million Civil Service Modernization Project.
In March 2025, the World Bank will approve the $600-million First Energy Transition and Climate Resilience Development Policy Loan (DPL).
The Philippines shall also borrow $250 million for the Water Supply and Sanitation Project in June next year.
At the onset of the World Bank's fiscal year 2026 that starts on July 1, 2025, the Philippines is set to borrow $600 million for its Project for Learning Upgrade Support and Decentralization, on top of $700 million for the Community Resilience Project.
As Manila Bulletin earlier reported, the Philippines was the fifth-biggest borrower among the World Bank's International Bank for Reconstruction and Development (IBRD) developing country-clients in fiscal year 2024, during which the country secured a total of $2.35 billion in concessional loans.
If poorer country-borrowers part of the International Development Association (IDA) are included, the Philippines ranked as the seventh-largest overall World Bank borrower of the previous fiscal year, just behind war-torn Ukraine, Ethiopia, Bangladesh, Türkiye, Indonesia and India.