The Philippines is set to sign a record-high $1-billion loan agreement, or about ₱55.8 billion, from the World Bank to provide budgetary support for the country’s major infrastructure projects aimed at boosting the agriculture sector.

According to the World Bank’s website, the funding support will be directed to the Philippine Sustainable Agricultural Transformation (PSAT) program, under the Department of Agriculture (DA).

A document published on the World Bank’s website indicated that PSAT is projected to cost $20 billion (over ₱1.1 trillion), of which the Philippine government would shoulder the $11.9 billion (over ₱683 billion) out of the $12.8975 billion (over ₱741 billion) operation cost. With the $1-billion funding, there would be a financing gap of $2.5 million.

World Bank Agriculture and Food Global Director Shobha Shetty said the new loan to the Philippines would be unlike previous agreements, as it would be the country’s first project under the Program-for-Results (PforR) financing framework.

“So essentially, the $1 billion supports the budget of the [DA] and the way we disburse the money is based on achievement of certain results,” Shetty said in a recent media briefing.

Since the agreement has not yet been signed, Shetty did not disclose the disbursement-linked indicators (DLIs) for the loan agreement.

However, based on a document published on the World Bank’s website, DLIs are described as specific, measurable, and verifiable indicators related to loan program development objectives and results framework.

These indicators could be in the form of outcomes, outputs, intermediate outcomes or outputs, process indicators, or financing indicators.

The Washington-based multilateral lender disclosed that the loan is scheduled for approval on June 27, as of the latest board presentation.

Shetty said that on the part of the World Bank, “everything is ready”.

“I think a lot of it is also going to depend on the internal processes of the Philippine government…We are now just waiting for the government of the Philippines to go through its usual approval processes,” she added.

The Department of Finance (DOF), the agency responsible for the financial resources of the government, shall borrow on behalf of the DA—the project’s implementing agency.

PSAT, which will be implemented from 2025 to 2029, is scheduled to launch in August.

On the part of the government, DA Assistant Secretary Arnel de Mesa said it is eyeing to sign the loan agreement for the project in July.

De Mesa said the proposed loan was only recently given the greenlight by the Executive Technical Board (ETB) of the Development Budget Coordination Committee (DBCC).

The ETB serves as the clearinghouse of the DBCC, comprising undersecretaries and directors from the committee’s member agencies.

De Mesa, also the DA’s spokesperson, noted that as a budgetary support to the DA, the loan will be coursed through the Bureau of the Treasury (BTr).

The fiscal support, he said, will help the agency fund its priority infrastructure projects to promote sustainable agriculture and strengthen the government’s food security agenda.

The official noted that this will cover irrigation projects, food hubs, greenhouse facilities, cold storages, and drip irrigation systems, among others.

According to the World Bank, the PSAT is envisioned by the Philippine government to significantly improve productivity, diversification, climate resilience, and public resource use efficiency of the country's agri-food systems.