- The Philippines has launched a USD1 billion agriculture reform program, supported by the World Bank, to raise farm productivity, strengthen value chains, and improve sector management.
- The PSAT Program focuses on increasing productivity in rice-based farming systems, upgrading agricultural value chains, and strengthening institutional performance within the agriculture sector.
- The program uses the World Bank’s Program-for-Results model, releasing funds only after agreed targets—such as productivity gains and improved government performance—are met, thus prioritizing measurable impact and accountability.
The Department of Agriculture (DA) unveiled the Philippine Sustainable Agriculture Transformation (PSAT) Program on May 15.
The programme was designed to tackle long-standing weaknesses across the country’s food system by linking farm-level improvements with supply chain upgrades and institutional reform.
“This financing allows us to raise farm productivity, stabilise 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 P. Tiu Laurel Jr.
At its core, the programme will focus on three priority areas.
The first is increasing productivity in rice-based farming systems, which remain central to both farmer livelihoods and national food security. Efforts here will centre on boosting yields and improving efficiency at the farm level.
The second focus area is upgrading agricultural value chains. This means improving how food moves from farms to markets, including better logistics, processing, and coordination.
A major emphasis will be on making these systems more resilient to climate-related disruptions such as flooding, typhoons, and supply shocks.
Third, the programme aims to strengthen institutional performance within the agriculture sector.
This includes improving governance, planning, and service delivery by government agencies to ensure policies and investments translate into measurable outcomes.
Results-based funding
PSAT was rolled out under the World Bank’s Program-for-Results model, meaning funds will only be released once agreed targets are achieved.
These targets, known as disbursement-linked indicators, could include improvements in productivity, value chain efficiency, or government performance.
This results-based approach is expected to change how projects are implemented. Rather than spending funds upfront, the government must demonstrate progress before accessing financing.
Officials said this would improve accountability and ensure the programme delivered tangible impact across the agricultural system.
The rollout will be gradual with an initial USD300m disbursement expected in 2026, contingent on early progress.
“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,” said Zafer Mustafaoğlu, World Bank Division Director for the Philippines, Malaysia, and Brunei.
The funding was also intended to provide fiscal support as the country faces rising costs and increasing climate pressures affecting agriculture.
In parallel, the programme would be supported by a USD24.5m technical assistance grant under the Technical Assistance for Sustainable Agriculture Transformation (TASAT).
This included a USD14.5m contribution from the UK, which would support capacity building, helping government agencies and stakeholders implement reforms and meet performance targets.
“Agriculture sits at the crossroads of climate change, food security and economic growth. As farmers face stronger typhoons, floods and disrupted supply chains, transforming agriculture is not just a technical task – it is a strategic necessity. That is why the UK, together with the World Bank, is investing in TASAT to raise incomes, stabilise food supplies and strengthen climate resilience while protecting land and nature,” said British Ambassador Sarah Hulton OBE.
The combined financing structure reflects a dual strategy of a large-scale investment paired with technical support to ensure delivery.
While PSAT funds physical improvements and system upgrades, TASAT is intended to strengthen the skills, planning, and coordination needed to execute the programme effectively.
DA Assistant Secretary Arnel de Mesa said that PSAT and TASAT could become a test case for results-based financing in the Philippines, emphasiaing measurable impact over mere fund availability.
