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Manila Bulletin devider Business devider Banking & Finance devider Philippines to repay its biggest-ever World Bank loan for agriculture until 2044

Philippines to repay its biggest-ever World Bank loan for agriculture until 2044

Published May 15, 2026 02:04 pm

The Philippines will repay until 2044 its biggest-ever loan from the World Bank, which will bankroll a sweeping agricultural transformation program aimed at boosting food production, modernizing farming systems, and strengthening climate resilience.

Documents showed that Finance Secretary Frederick D. Go, on behalf of the Philippine government, signed on May 14 the loan agreement for the $1-billion Philippines Sustainable Agriculture Transformation (PSAT) Program, which the Washington-based multilateral lender approved last March 27.

World Bank division director for the Philippines, Malaysia, and Brunei Zafer Mustafaoğlu signed the same agreement earlier on April 10.

The loan was denominated in Japanese yen, amounting to ¥156.61 billion.

While this loan financing will close by end-2030, principal repayment will begin in September 2031 and end in September 2044.

The agreement showed that the loan carries a front-end fee equivalent to 0.25 percent of the total amount, alongside a commitment charge of 0.25 percent per year on the unwithdrawn balance.

According to the document, this financing represents the first phase of the multi-phase programmatic approach for the Sustainable Agriculture Transformation in East Asia and Pacific (EAP) Region Program.

PSAT, to be implemented by the Department of Agriculture (DA), aims to “improve productivity, diversification, climate resilience, and public resource use efficiency in the agrifood systems in the Philippines,” according to the document.

Under the loan agreement, the first major component of the project will focus on climate-resilient rice farming through wider distribution of approved rice seed varieties, expanded farm mechanization, fertilizer support reforms, and the promotion of climate-smart agriculture technologies.

The program will also support higher-value crop production and strengthen food supply chains through investments in cold storage facilities, modern vegetable farming technologies, and upgraded food safety and plant quarantine laboratories aimed at facilitating agricultural exports.

The final component seeks to strengthen institutional systems, including procurement reforms, improved budgeting systems, and the establishment of a centralized data command center meant to support climate disaster response and data-driven policymaking.

The World Bank had said PSAT would benefit at least five million farmers nationwide.

The lender had structured this funding as a program-for-results (PforR) operation, a financing instrument that links disbursements directly to the achievement of specific, pre-agreed outcomes under government-led development programs.

Under the agreement, succeeding loan disbursements will depend on the Philippine government achieving specific performance targets tied to agricultural productivity, climate resilience, food value chain modernization, and institutional reforms within the DA.

These include higher adoption of climate-smart farming technologies, improved rice productivity and diversification, expanded cold storage and post-harvest facilities, upgraded export and quarantine systems, more efficient procurement and budgeting processes, and the operationalization of an integrated DA data command center for faster, data-driven decision-making and disaster response, documents showed.

Related Tags

World Bank Department of Agriculture (DA) Frederick D. Go Department of Finance (DOF) Philippine Sustainable Agriculture Transformation (PSAT) project
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