DA unveils $1-B World Bank-funded agri transformation initiative

The Department of Agriculture (DA) on Friday announced the $1-billion World Bank loan-backed Philippine Sustainable Agriculture Transformation (PSAT) Program.

In a news release, the DA said the PSAT was aimed at modernizing the country’s agriculture sector while boosting productivity and strengthening food security.

It said the PSAT is the Philippines’ first project under the World Bank’s Program-for-Results (PforR) model, which releases funds based on measurable outcomes rather than upfront disbursements.

The DA project is a vote of confidence in the agency’s reform agenda and a shift toward results-driven development financing.

“This financing allows us to raise farm productivity, stabilize food supply, and protect millions of livelihoods dependent on agriculture. By strengthening value chains and building climate resilience, we are supporting rural incomes and reinforcing a key pillar of the economy,” said Agriculture Secretary Francisco Tiu Laurel Jr.

The Agriculture Department said the PSAT targets three result areas:

• increase in rice-based farming output
• enhancement of efficiency and climate resilience in value chains
• improvement in institutional performance

By linking farm productivity with supply chain upgrades and governance reforms, the DA said PSAT seeks to deliver measurable, end-to-end results across the full agricultural value chain.

A key feature is its use of disbursement-linked indicators (DLIs), which require the government to meet verifiable targets before accessing funds, according to the DA.

While this may slow initial disbursements, it enforces accountability and outcome-driven execution, it said.

The DA said the government is anticipating an initial $300 million release in 2026, providing fiscal support amid energy pressures and climate-related challenges.

“These programs will help at least five million farmers diversify livelihoods, increase income, and manage climate risks. Rural communities will benefit from modernized services, stronger value chains, and a more resilient food system,” Zafer Mustafaoğlu, World Bank Division Director for the Philippines, Malaysia, and Brunei.

Complementing the World Bank loan for PSAT is a $24.5-million Technical Assistance for Sustainable Agriculture Transformation (TASAT) grant, including a $14.5 million contribution from the United Kingdom through its Just Rural Transition Support Programme.

For his part, DA Assistant Secretary Arnel de Mesa said that PSAT and TASAT could become a test case for results-based financing in the Philippines, emphasizing measurable impact over mere fund availability. — BAP, GMA News