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The Philippines has been one of the most dynamic economies in the East Asia and Pacific region. Its economic dynamism reflects increasing urbanization, a large and young population, and strong consumer demand, supported by a vibrant labor market and robust remittances, which have raised the incomes of the most vulnerable. The private sector remains buoyant, with the rapidly expanding services sector¡ªincluding business process outsourcing, wholesale and retail trade, and tourism. The poverty rate declined from 16.7percent in 2018 to 15.5 percent in 2023, after a short period of increase during the COVID-19 pandemic and other global headwinds, including high global commodity prices and higher-for-longer global interest rates. 

The economy has sustained its strong momentum, growing 6.0 percent in the first half of 2024, placing itamong the top growth performers in the region. As a result of continued recovery and reforms, the Philippines is on track to transition from lower-middle to upper-middle-income status this fiscal year.

Strong domestic demand; continued public investments, despite ongoing fiscal consolidation; and the effects of recent investment policy reforms, which could boost private investment, will continue to support growth. Over the medium and long term, the government is committed to making large investments in both human and physical capital in order to boost inclusive growth.

Last Updated: Oct 16, 2024

ľ¹ÏÓ°Ôº¡¯s partnership with the Philippines spans 79 years. Since 1945, the World Bank has mobilized funding, global knowledge, and partnerships to support the Philippines¡¯ efforts to reduce poverty; promote agricultural development; upgrade infrastructure; improve health, nutrition, and education; strengthen resilience against climate change and natural disasters; enhance global competitiveness; and promote peace. In recent decades, the Bank has also helped spur private sector growth, including in agriculture; expandengagement with civil society; and promote peace and development in Mindanao.

The , extended to 2024 by the , prioritizes three areas: (a) investing in people (health and nutrition, education, and social protection); (b) increasing competitiveness and creating jobs; and (c) addressing core vulnerabilities by building peace and resilience; improving governance and accelerating digital transformation are cross-cutting themes. The Bank provides technical assistance and support to projects that (a) strengthen community-driven development, including by improving service delivery and linking remote communities to markets; (b) promote human development; and (c) address drivers of conflict. The CPF also supports a cohesive approach to Mindanao¡¯s development and the intensification of efforts to engage the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).

After extensive nationwide consultations with partners in the Philippine government, the private sector, civil society organizations, people¡¯s organizations, youth groups, and academic institutions, the Bank is preparing a new CPF for 2025¨C28, which it will launch in early 2025. Emerging priorities include support for six areas: (a) inclusive growth and jobs (increased firm and farm productivity, a competitive business environment for more and better jobs, and inclusive finance); (b) strong human capital (improved health, nutrition, and education and skills); (c) resilient communities (improved resilience to shocks and climate change and better-quality services in conflict-affected, poor, and disadvantaged communities); (d) environmental sustainability (transition to a greener, climate-resilient economy); (e) a stronger public sector; and (f) accelerated digital transformation. 

As of end-September 2024, the active portfolio of the International Bank for Reconstruction and Development (the branch of the World Bank that supports middle-income countries) comprises 19 operations in the Philippines, with net commitments of US$8.08 billion. The portfolio spans the following sectors: urban, resilience, and land (21 percent of the portfolio); agriculture and food (19 percent); macroeconomics, trade, and investment (19 percent); finance, competitiveness, and innovation (9 percent); health, nutrition, and population (9 percent); social sustainability and inclusion (9 percent); social protection and jobs (7 percent); water (3 percent); the environment, natural resources, and the blue economy (2 percent); transport (1 percent); and education (1 percent).

The Philippines¡¯ Trust Fund portfolio consists of 70 active grants, with a total commitment of US$75.8 million. These grants fund technical assistance and advice on project implementation and create or share knowledge to help the government plan and execute projects and policy changes and initiatives.

Since 1962, the International Finance Corporation (IFC) of the World Bank Group has invested about US$6 billion in over 170 projects in the Philippines, where it has provided investment and advisory services on climate finance, digitalization, financial inclusion, disaster insurance, enhancement of the investment climate, and the enabling of private sector investments. Its priorities in the Philippines include reducing the impacts of climate change, deepening financial inclusion, promoting sustainable infrastructure, and strengthening the capacity of the private sector.

Last Updated: Oct 16, 2024

The Bank¡¯s development projects in the Philippines have produced significant results for the country¡¯s peoplesince it extended it first loan, in 1957. In recent decades, Bank assistance has expanded to a wide range of projects and analytical work, policy advice, and capacity development in support of the Philippines¡¯development agenda.

The Bank has supported one of the Philippine government's primary community empowerment and poverty alleviation programs, Kalahi-CIDSS. Since February 2014, Kalahi CIDSS received US$779 million in funding under the  (KC-NCDDP). KC-NCDDP aims to empower poor communities and has delivered impressive results in remote and poor areas, including Indigenous communities. It has financed 54,578 subprojects, benefiting 17.5 million households. These subprojects, which include basic access facilities, (e.g., village roads), social services, environmental protection, and community utilities, have improved the lives of about 1.5 million Indigenous households. Since 2014, the project has mobilized over 2.1 million community volunteers, 35% of whom are women.

Impact evaluations found that the project increased per capita spending among beneficiary households by 12 percent; among households identified as poor at project start-up, the increase was even higher (19 percent).

Similarly, , launched in 2015, aims to increase rural incomes, boost farm and fishery productivity, and improve market access nationwide. So far, it has benefitted over 1.3 million farmers and fisherfolk, nearly double its target of 760,000. Female beneficiaries have reached 508,350, surpassing the target of 342,000. The project has constructed and rehabilitated 2,110 kilometers of farm-to-market roads, reducing travel time by 66% in the dry season and 64% in the wet season, and cutting transport costs by 52%. A household survey shows that annual real income for farmer and fisher households benefiting from completed infrastructure rose by 26%, and incomes for those involved in agricultural enterprise subprojects increased by 46%. 

Recognizing the central role of electrification in fostering inclusive growth, the government has made expanding access to electricity a priority. Achieving universal household electrification is challenging, because most of the remaining unelectrified households are in very isolated areas. Off-grid electrification using renewable energy systems is essential to meet these targets, given the country¡¯s island geography and scattered population. 

The  initiated in 2016, was designed to address this challenge. The project piloted and demonstrated, at scale, a financially and environmentally sustainable business model for off-grid electrification and inclusive growth. It provided 202,500 people, including 103,250 women and girls, with new or improved electricity services by adding 2 megawatts of generation capacity. As a result of the project¡¯s success, the National Total Electrification Program adopted its business model.

In September 2020, as the Philippines tackled the COVID-19 pandemic, the Bank launched the Philippines Beneficiary FIRST Social Protection (BFIRST) Project to mitigate the impact on low-income Filipino households. This project supported the government's flagship conditional cash transfer program,  (4Ps). It helped the Department of Social Welfare and Development develop and implement a digital transformation strategy, enabling over 4 million households to receive 4Ps benefits via electronic or digital wallets."

In March 2021, the Bank launched the Philippines COVID-19 Emergency Response Project to support the country¡¯s national vaccination efforts, healthcare system strengthening, and overcome the impact of the pandemic, especially on the poor and the most vulnerable. It financed the procurement of at least 33 million doses of COVID vaccines in the Philippines, benefitting 7.5 million children, and facilitated the purchase of essential medical equipment. The ramp-up of vaccination enabled the authorities to open more economic activities, allowing the economy to grow 5.6 percent in 2021.

To strengthen the government¡¯s capacity to manage risks from climate change, natural disasters, and disease outbreaks, the Bank approved the Fourth Disaster Risk Management (DRM) Development Policy Loan with Catastrophe Deferred Drawdown Option on November 2021. The operation is supported by the Bank¡¯s   program, which helps local governments and communities anticipate disaster impacts and prepare recovery plans in advance. Some 1,800 governors, mayors, and technical staff from 350  provinces, cities, and municipalities from all 17 regions of the country¡ªincluding people struck by Super Typhoon Rai¡ªhave . Another 450 technical staff from 150 local governments have been  in the use of the , through which they can integrate hazard and risk information into local disaster risk reduction and management plans.

The project supported the government in developing the , which generates disaster recovery plans using science-based information. The platform enables disaster managers to anticipate what can happen in their area based on simulations. Over 500 people have been  to use the app, and baseline data of 128 local government units have been integrated into the . 

In the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), the Bank is supporting the peace process between the Philippine government and the Moro Islamic Liberation Front. Building on the achievements of the earlier Mindanao Trust Fund (2005¨C21), the Bank manages the Bangsamoro Normalization Trust Fund (BNTF), with contributions from Australia, Canada, the European Union, and the United Kingdom. The BNTF supports community-driven development, agricultural livelihoods, and farm-to-market roads in MILF camp communities. It also provides technical assistance for the decommissioning and planning and coordination of development efforts in the camps. 

In the private sector, IFC has been a leader in developing the thematic bond market in the Philippines. In July 2021, IFC supported , which provided 4,000 loans to MSMEs in the country. In April 2022, it supported the issuance of , intended to help tackle marine pollution and preserve clean water resources. In July 2024, IFC supported  first sustainability-linked financing package to decarbonize its commercial real estate portfolio.

Last Updated: Oct 16, 2024