Overview

  • The Philippines is one of the most dynamic economies in the East Asia and the Pacific region. With increasing urbanization, a growing middle-income class, and a large and young population, the Philippines’ economic dynamism is rooted in strong consumer demand supported by improving real incomes and robust remittances. Business activities are buoyant with notable performance in the services sector including the Business Process Outsourcing, real estate, and finance and insurance industries.

    Sound economic fundamentals and a globally recognized competitive workforce reinforce the growth momentum. Having sustained an average annual growth of 6.3 percent between 2010-2016 from an average of 4.5 percent between 2000-2009, the country is poised to make the leap from a lower-middle income country with a gross national income per capita of US$3,580 in 2016 to an upper-middle income country status (per capita income range of US$3,956 – 12,235) in the medium term.

    The Philippines remains a consistent growth performer in the East Asia region. In 2017, the Philippines was among the top three growth performers. The Philippine economy grew from 6.9 percent year-on-year in 2016 to 6.7 percent year-on-year in 2017. Growth was anchored in strong exports, while investment growth significantly slowed and consumption growth moderated. The Philippine economy is projected to continue on its expansionary path and grow at an annual rate of 6.7 percent in both 2018 and 2019. In 2020, growth is expected to level at 6.6 percent. The economy is currently growing at its potential, making productive investment in physical and human capital essential so that the economy can continue to grow along its current growth trajectory. Investment growth hinges on the government’s ability to effectively and timely implement its ambitious public investment program.

    In recent years, the Philippine economy has made great strides in delivering inclusive growth, evidenced by the declining poverty rates and a falling Gini coefficient. Unemployment has reached historic low rates. Underemployment, however, remains high, near its 18-20 percent decade-long average. Majority of Filipino workers that transition out of agriculture generally end up in low-end service jobs. Thus, while employment increased between 2006 and 2015, mean wages remained stagnant, with only a four percent increase in real terms over the same period. Measures to generate good jobs and better wages therefore are essential to achieve shared prosperity.

    Last Updated: Apr 19, 2018

  • The World Bank Group’s (WBG) partnership with the Philippines spans nearly 60 years, providing longstanding support for infrastructure as well as engagement in key sectors including governance, social protection, water resources and disaster risk management. The WBG is also an active partner in helping spur private sector growth, expanding engagement with civil society, and promoting peace and development in Mindanao.

    The Bank Group’s Country Partnership Strategy (CPS) for the Philippines from 2015-2019 revolves around the theme “Making Growth Work for the Poor,” supporting the country’s goal of inclusive growth that reduces poverty and creates more and better jobs that raise real wages. The recently completed mid-term review of the strategy affirms the continued relevance of five CPS engagement areas:

    • Transparent and accountable government: strengthening public financial management, improving fiscal transparency and financial accountability, and supporting greater citizen demand for government accountability;
    • Empowerment of the poor and vulnerable: improving health and education outcomes, strengthening social protection and ensuring the availability of more timely and improved measurements of poverty;
    • Rapid, inclusive and sustained economic growth: promoting economic policy reform for inclusive growth, boosting private sector development by improving the investment climate for firms of all sizes, and increasing productivity and job creation – especially in rural areas;
    • Climate change, environment and disaster risk management: increasing physical, financial and institutional resilience to natural disaster and climate change impacts, and improving natural resource management and sustainable development; and
    • Peace, institution building, and social and economic opportunity: supporting governance, social and economic development and citizen security and justice in conflict-affected regions in Mindanao, including the territory of the proposed new Bangsamoro autonomous political entity.

    Through funding assistance, technical advice and knowledge, the World Bank Group has been responsive to the country’s development priorities as reflected in the Philippine Development Plan 2017-2022.

    The World Bank Group focuses on peace-building and development in Mindanao.  The Bank supports government’s efforts to enhance agricultural productivity and connectivity from farm to market; boost education, skills, and employability of the youth; and help promote peace and development.

    The World Bank’s support to the country cuts across several sectors that includes agriculture, social development, disaster risk management, social protection, water, education, transport, and  energy.

    As of end of March 2018, the Bank's active portfolio in the Philippines consists of 13 operations financed by IBRD loans, GEF grants, and recipient-executed grants with total net commitment of US$3.2 billion (including one CAT-DDO operation of US$500 million). The Philippines trust fund portfolio consists of 64 active grants with total commitment of $198.4 million, of which 17.7 percent are Bank executed.

    The World Bank Group’s private sector arm, the International Finance Corporation (IFC), has invested more than $3 billion to support more than 100 private sector companies in the country since 1962. As of December 2017, IFC’s committed portfolio is at US$763.9 million, which focuses on reducing impacts of climate change, increasing rural incomes, promoting sustainable urbanization and helping address governance constraints.

     

    Last Updated: Apr 19, 2018

  • Since the Philippines government received its first World Bank loan in 1957, the Bank has financed development projects which have produced significant results for its people.  In the last three decades, the Bank’s assistance has expanded to a wide range of projects and analytical work, policy advice and capacity development in support of the country’s development agenda.

    Here are a few projects and results:

    The Philippine Rural Development Project (PRDP), started in 2015, has been helping raise rural incomes, enhance farm and fishery productivity, and improve market access throughout the country. It has been supporting provincial planning, rural infrastructure and agriculture enterprise development. It has been using tools such as geotagging, value chain analysis and expanded vulnerability and suitability assessments to help guide public investments toward a modern, value-chain oriented, and climate-resilient agriculture and fisheries sector.

    To date, PRDP has completed 148.4 km of new and reconstructed roads. Close to 80,000 households are benefitting from (a) a reduction in travel time from farm to market by 43 percent; (b) a reduction in hauling costs of agricultural outputs by 32 percent; (c) a reduction in hauling cost of production inputs by 54 percent.  An additional 1,220 kilometers are under construction/awarded. Farmers benefitting from the rural roads reported a 15 percent increase in average household incomes. These families have also reported increased enrolment and school attendance of their children, and faster response to medical emergencies.

    The Participatory Irrigation Development Project (PIDP) has been supporting the improvement of 58 irrigation systems throughout the country. Since it started in 2011, the project has rehabilitated and modernized irrigation infrastructure that has been serving close to 115,420 hectares, benefiting close to 208,382 farmers, and their families. It has also provided organizational development and capacity building activities to more than 928 Irrigators’ Associations.

    The Bank has been supporting the government’s education agenda through the Learning, Equity and Accountability Program Support (LEAPS) project in the areas of early grade reading and math (with a focus on disadvantaged children). Significant improvements have been recorded in reading and math scores of Grade 2 students. The project has also successfully supported the development and roll-out of a department of education-wide financial management and operations manual and has trained 14,121 target schools in the new performance incentive scheme. Approximately 8,000 schools have received training in the new school report card utilization and have reviewed two education programs focused on supporting disadvantaged learners.

    The first Social Welfare and Development Reform Project (SWDRP) has helped bring almost universal enrollment (98 percent) of poor children from ages 6-11 in areas covered by the project. It has also been promoting the increased use of health services for children up to five years old and for poor pregnant women. The project has supported the government’s conditional cash transfer program (CCT) or Pantawid Pamilyang Pilipino Program, which is helping poor households invest in the education and health of children up to 18 years old. The program has made significant impact on reducing total poverty and food poverty among beneficiaries, and has grown to become one of the largest in the world, supporting more than 4.4 million households as of December 2017. An important feature of the project has also been the design and roll out of Listahanan, the national household targeting system for poverty reduction in the Philippines, that reaches three out of four households across the country. The objective selection of 5.2 million poor households in 2016 has helped ensure that government programs are better targeted for those who need it most. Given the project’s success, the Bank has provided funding through a second project (SWDRP II) that contributes to the government’s financing of health and education grants for poor households nationwide from 2016-2019.

    Overall, SWDRP is instrumental in helping the government collect information from more than 15 million households to identify families that could benefit from social welfare programs. It has raised enrollment among poor elementary school children by 5 percent and increased secondary education by 7 percent. Families benefiting from the program reported a 10 percent increase in seeking pre- and postnatal care, and a 20 percent rise in the delivery of babies in health facilities by skilled professionals.

    The poorest communities have benefited from projects that address their priority needs through a community-driven development approach. As of October 31, 2017, the National Community-Driven Development Project (NCDDP) has covered a total of 18,760 barangays (villages) in 799 municipalities. It has funded a total of 24,790 community sub-projects, most of which has been completed. These community sub-projects reached approximately 4.9 million beneficiaries (53 percent of 8.4 million target). Supported community projects include basic access facilities (access roads, footbridge), basic social services such as health clinics, schools, day care centers and water systems as well as facilities for flood/erosion control and environmental protection.

    To manage the risks posed by natural disasters, the Bank has provided a contingent line of credit for moderate to severe disasters, as well as an innovative catastrophe insurance coverage for the most severe and infrequent events. This is combined with technical assistance to help strengthen investment planning and regulations to reduce disaster risk, particularly through support for the revision of the National Building Code. The innovative financing helps ensure that resources are available for the government’s development programs in the aftermath of a disaster. With its global expertise in post-disaster reconstruction, the Bank has been working with development partners and the government in helping develop effective disaster recovery programs and building back better infrastructure and communities.

    The Bank’s assistance has also extended to conflict-affected areas in the country, helping support better governance, access to services, jobs creation and enhanced citizen security and justice. The Mindanao Trust Fund-Reconstruction and Development Project has been supported by a range of development partners and aims to improve prospects for peace and development in conflict-affected areas in Mindanao by improving the social and economic recovery. From 2006 to 2017, development partners have provided PHP 1.4 billion (USD 28.9 million) to the program. Results delivered include 573 sub-projects that improved infrastructure, strengthened livelihoods and functional literacy in 315 conflict-affected communities across 75 municipalities. Nearly 650,000 people now benefit from clean water, better roads, more post-harvest facilities and access to farming and fishing equipment.

    Last Updated: Apr 19, 2018

Api


LENDING

Philippines: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments



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Telephone number: 632-465-2500 Fax number: 632- 465-2505
26th Floor, One Global Place 5th Ave. corner 25th St. Bonifacio Global City, Taguig City Philippines 1634
comphilippines@worldbank.org
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