The Philippines has launched a $1-billion agriculture modernization program backed by the World Bank, marking a major shift toward results-based financing as the government moves to raise farm productivity, strengthen food security and build climate resilience in rural communities.
The Department of Agriculture (DA) on Friday rolled out the Philippine Sustainable Agriculture Transformation (PSAT) program, which is expected to benefit at least five million farmers through improved services, stronger value chains and climate-smart farming systems.
Agriculture Secretary Francisco Tiu Laurel Jr. said the financing package would support the administration’s push to modernize the farm sector while protecting millions of Filipinos whose livelihoods depend on agriculture.
“This financing allows us to raise farm productivity, stabilize food supply, and protect millions of livelihoods dependent on agriculture,” Laurel said.
“By strengthening value chains and building climate resilience, we are supporting rural incomes and reinforcing a key pillar of the economy,” he added.
The DA said PSAT is the country’s first project under the World Bank’s Program-for-Results financing model, where fund releases are tied to verified outcomes instead of being disbursed upfront.
Under the arrangement, the government must meet disbursement-linked indicators before accessing funds. Officials said the mechanism is designed to improve accountability, ensure measurable progress and keep the program focused on actual reforms rather than spending alone.
The government expects an initial $300-million release in 2026, which is seen to provide fiscal support as the country continues to deal with energy pressures, supply chain disruptions and climate-related risks.
World Bank Philippines, Malaysia and Brunei Division Director Zafer Mustafaoğlu said the program would help farmers diversify their livelihoods, raise incomes and better manage climate threats.
“These programs will help at least five million farmers diversify livelihoods, increase income, and manage climate risks,” Mustafaoğlu said.
“Rural communities will benefit from modernized services, stronger value chains, and a more resilient food system,” he added.
PSAT will be complemented by the $24.5-million Technical Assistance for Sustainable Agriculture Transformation grant. Of the amount, $14.5 million will come from the United Kingdom through its Just Rural Transition Support Programme.
DA Assistant Secretary for Special Concerns and Official Development Assistance Arnel de Mesa said the technical assistance component will focus on sustainable farm practices, soil health, water conservation, ecosystem services, low-carbon rice production and efficient fertilizer use.
“This portion is focused on transforming our agricultural practices towards sustainability,” De Mesa said, adding that the program will also help strengthen institutional capacity and support climate-smart agriculture systems.
“We’re looking at repurposing the fertilizer subsidy program and boosting diversification and export development,” he added.
De Mesa said PSAT and its technical assistance component could serve as a test case for results-based financing in the country, with emphasis on measurable impact instead of the mere availability of funds.
British Ambassador Sarah Hulton said the UK’s support reflects the need to transform agriculture as farmers face stronger typhoons, flooding and supply chain disruptions.
“Agriculture sits at the crossroads of climate change, food security, and economic growth,” Hulton said.
“As farmers face stronger typhoons, floods, and disrupted supply chains, transforming agriculture is not just a technical task; it is a strategic necessity,” she added.
Hulton said the UK, together with the World Bank, is investing in the program to help raise incomes, stabilize food supplies and strengthen climate resilience while protecting land and nature.