ADB, Japan Provide Support to Mindanao Landholders in Wake of Peace Agreement

MANILA, PHILIPPINES – The Asian Development Bank (ADB) and Government of Japan will provide support to help thousands of small scale landholders in the Autonomous Region in Muslim Mindanao establish agribusinesses, as part of initiatives to bring peace and stability to the area through economic development.

“Despite having enormous potential for increasing household income from bananas, palm oil, coffee, rubber, fish and livestock, this region has the highest proportion of poor families in the Philippines,” said Neeraj Jain, ADB’s Country Director for the Philippines. “The Framework Agreement on Bangsamoro between the Government of the Philippines and the Moro Islamic Liberation Front is expected to usher in new opportunities for socioeconomic development in Mindanao.”

Many small scale landholders currently lack the expertise and access to finance they need to build viable businesses on their land, leading many to lease their plots to private interests, work as laborers, or move away.

The project will help about 2,000 households, with women expected to make up about half of the project’s beneficiaries. They will establish sustainable agribusinesses, with support to connect them to private enterprises and financial institutions that can help them realize new business opportunities.

It will also help local government units fund badly needed rural infrastructure. At present, local governments find it extremely difficult to raise the necessary equity to attract national support for infrastructure funding.

Mechanisms for financial support will focus on Islamic-based commercial financing modes, such as non-interest bearing loans. An oversight, or apex, institution will be established to provide ongoing support for landholders.

Detailed feasibility studies will be carried out to explore broader agribusiness opportunities for up to 10,000 households.

The $2 million grant from the Japan Fund for Poverty Reduction, administered by ADB, is part of a larger $8.8 million project that also includes assistance of $2 million from the Development Bank of the Philippines and Al Amanah Islamic Investment Bank of the Philippines; $2 million from private enterprises; $1.8 million from the World Food Program; and $1 million from small scale landholders in the form of equity and labor. The project will run for approximately three years, with expected completion in the first quarter of 2016.