Announcement of World Bank Supports Agricultural Production, Reforms in Philippines on September 6, 1984

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 85/6 Contact: P.B. Sison September 6, 1984 (202) 477-3573 WORLD BANK SUPPORTS AGRICULTURAL PRODUCTION, REFORMS IN PHILIPPINES Agricultural production in the Philippines will be maintained partly through a loan of $150 million from The World Bank. The country is currently faced with a shortage of foreign exchange and the funds will be used to ensure an adequate supply of imported agricultural materials during 1984-85. Last year production suffered from the effects of a severe drought. The loan will also support a program of policy and institutional reforms designed to improve efficiency and incentives for farmers, and to strengthen the formulation and implementation of policies and investment programs in the sector. The World Bank loan is part of a $460 million import financing program being arranged by the Philippine government to support agricultural production during the coming year. The Asian Development Bank has approved a loan of $130 million for the program. And the United States, Japan, Australia, Canada, and the United Kingdom are expected to provide credits or grants. The World Bank loan is part of a Special Action Program (SAP) introduced in February 1983. The SAP is designed to help developing countries maintain the momentum of their development efforts in the face of the current international economic crisis. The project supports a program of improvements in the policies and institutional structure of the sector. The Ministry of Agriculture will be redesignated the Ministry of Agriculture and'Food. It will assume direction of the National Food Authority, the Fisheries Development Authority, and the Bureau of Fisheries and Aquatic Resources. The integration of these agencies will help improve the coordination of food policies and programs. The ministry will be represented on the governing boards of the country's Coconut Authority and Sugar Commission, which regulate industries accounting for some 28 percent of the country's exports. The prices of animal feeds, pork, poultry, and eggs will be adjusted to reflect increases in production costs, and gradually decontrolled. Import and export trade in rice and animal feeds will be opened to the private sector and appropriate measures will be taken to help private firms enter the trade. Interest rates on agricultural credit will be aligned more closely with rates applying to other sectors. The planning of public investments within the sector will be improved through well-defined priorities. And studies of key policy issues will be carried out to provide the basis for future reforms. The World Bank loan is for 20 years including five years' grace with a variable interest rate, currently 9.89 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances and a front-end fee of 0.25 percent on the amount of the loan. NOTE: Money figures are expressed in U.S. dollar equivalents. 039-01 0281 D ..itesy Ms . BT i s i t te IMF, 530