MANILA – The Department of Agriculture launched the Philippine Sustainable Agriculture Transformation (PSAT) Program, a USD1-billion initiative supported by the World Bank aimed at modernizing the agriculture sector, increasing farm productivity, and strengthening food security.

The PSAT program is the country’s first project under the World Bank’s Program-for-Results financing model, which releases funding based on the achievement of measurable targets instead of upfront disbursements.

Agriculture Secretary Francisco P. Tiu Laurel Jr. said the financing package would help improve agricultural output and support rural livelihoods.

“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,” Tiu Laurel said.

The program focuses on three key result areas: increasing rice-based farming production, improving the efficiency and climate resilience of agricultural value chains, and enhancing institutional performance.

According to the DA, the project aims to produce measurable results across the agricultural value chain by integrating productivity improvements, supply chain development, and governance reforms.

A major component of the program is the use of disbursement-linked indicators, which require the government to meet verified targets before funds are released.

The government expects an initial USD300 million disbursement in 2026 to help provide fiscal support amid rising energy costs 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,” said Zafer Mustafaoğlu.

The loan package is complemented by a USD24.5-million Technical Assistance for Sustainable Agriculture Transformation grant, including USD14.5 million from the United Kingdom through its Just Rural Transition Support Programme.

British Ambassador Sarah Hulton said the initiative addresses the growing impact of climate change on agriculture and food systems.

“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,” Hulton said.

DA Assistant Secretary Arnel de Mesa said the PSAT and TASAT programs may serve as a model for results-based financing in the Philippines by focusing on measurable outcomes instead of fund availability alone.