The Philippines is aiming to spend nearly $300 million, or 30 percent, of its record-high $1 billion loan from the World Bank (WB) this year to augment the budget needed for programs aimed at helping the agriculture sector cushion the impact of the oil crisis.

Agriculture Assistant Secretary Arnel de Mesa said the Department of Agriculture (DA) will draw up to $298 million from the funding assistance to begin implementing its initiatives under the Philippine Sustainable Agriculture Transformation (PSAT) program.

PSAT is a five-year program aimed at increasing the country’s rice-based farming output, improving efficiency and climate resilience in value chains, and enhancing institutional performance. It is expected to benefit as many as five million farmers over the program’s term.

The program is backed by the WB’s $1 billion loan and is the first project under the multilateral bank’s Program-for-Results (PforR) model, which releases funds based on measurable outcomes.

Following the signing of the loan agreement between the WB and the government last March, De Mesa said they are just awaiting the legal opinion of the Department of Justice (DOJ) before PSAT takes effect, either in June or July.

Once effective, he said the DA will request about $248 million to initiate the program, and around ₱50 million for prior results to ensure that the agency remains in line with its PforR targets.

“Right now we are under an energy crisis, so much of the budget is going to ayuda (aid) and subsidies to our farmers and fishermen,” he said in a press briefing on Friday, May 15.

Agriculture Undersecretary Jerome Oliveros said the loan will also help the DA sustain the budget needed to distribute fertilizers, whose prices have soared amid the ongoing war in the Middle East.

In addition, he said the funding assistance is expected to support the agency’s budget for the coming year, especially since it continues to be shortchanged when comparing its actual allocation with its initial request.

“We're hoping that this will really augment the budgetary requirement for the plans and programs that we have for DA,” said Oliveros.

For the $248 million, the DA needs to fulfill 12 disbursement-linked indicators (DLIs), or specific targets that correspond to a certain amount, before it will be allowed to request more funding under the loan agreement.

Complementing the loan is the $24.5 million Technical Assistance for Sustainable Agriculture Transformation (TASAT) grant, which includes a $14.5 million contribution from the United Kingdom.

TASAT will specifically focus on the PSAT’s objective of improving the country’s rice production, according to De Mesa.

Meanwhile, De Mesa said the DA is also targeting another loan from the WB, this time totaling $350 million, for a five-year program on agricultural insurance and access to credit.

He said the program has been approved by the Investment Coordinating Committee (ICC) at the technical board level and is now awaiting concurrence from the cabinet committee level.