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 remained a consistent growth performer in the East Asia region, although growth moderated in the first half of 2017. The Philippines grew in the first half of 2017 faster than Indonesia, Thailand, Malaysia and Vietnam, but slower than China. Following strong growth in the immediate months after the new administration assumed office in July 2016, the economy had a slow start in the first half of 2017. The GDP growth rate was 6.4 percent, year-on-year, in the first half of 2017, compared to 7.0 and 6.8 percent in the first and second half of 2016, respectively. Private consumption resumed its position as the main engine of economic growth, and a rebound in exports contributed to growth.

    The rapidly growing domestic economy has yielded substantial gains in poverty reduction. The poverty incidence among Filipinos dropped to 21.6 percent in 2015 from 25.2 percent in 2012. This presents 1.8 million Filipinos lifted out of poverty within three years. Sustained economic growth since 2015 increases the likelihood that poverty reduction has continued. Higher wage income, particularly for households in the bottom 40 percent, constituted the main driver of recent poverty alleviation.

    The medium-term growth trajectory remains positive, but the economy is projected to grow at a slower pace than in 2016. The economy is projected to expand by 6.6 percent, year-on-year, in 2017 and 6.7 percent, year-on-year, in 2018 and 2019. Fiscal and monetary policies are likely to remain accommodative to growing the economy, and recovering exports and strong consumption growth are expected to boost economic growth. Higher investment growth could push the country’s growth rate towards the upper end of the government’s target of 6.5 to 7.5 percent of GDP, but this is contingent on whether or not the public infrastructure program gains full traction. 

    Last Updated: Oct 05, 2017

  • 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:

    The WBG program is closely aligned with and responsive to the national development priorities of the Duterte administration reflected in the Philippine Development Plan 2017-2022. The mid-term review of the CPS outlines progress underway, results achieved, and lessons learned from first two years of implementation of the CPS.  It also outlines opportunities to scale up impact and deepen support for the Philippine development agenda.

    In line with the CPS and the Bank Group’s twin goals of eradicating extreme poverty and boosting shared prosperity, the investment portfolio structure of the World Bank indicates strong and balanced support across sectors, including agriculture (19 percent), social development (18 percent), disaster risk operations (18 percent), and social protection (16 percent); followed by water (13 percent) and education (11 percent).  The remaining balance is shared by transport (4 percent) and energy (1 percent).

    As of September 2017, the Bank's active portfolio in the Philippines consists of 14 operations financed by IBRD loans, GEF grants, and large recipient-executed grants with total net commitment of $3.1 billion (including one CAT-DDO operation of $500 million).

    For FY 17, the World Bank Board of Executive Directors approved the Metro Manila Bus Rapid Transit Project, the first IBRD project under the new administration, and the Inclusive Partnership for Agricultural Competitiveness Project. For FY18, the Board is scheduled in September 2017 to approve the Metro Manila Flood Management Project, which is being co-financed with the Asian Infrastructure Investment Bank. For the remainder of the CPS period, the Bank is working with the government on projects in the areas of governance (E-Government Transformation and Customs and Trade Modernization), policy-based lending (Fiscal Transparency DPL and competitiveness DPL) and projects to support a Mindanao Regional Development Program.

    Its 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 July 2017, its committed portfolio is at $550.53 million, which focuses on reducing impacts of climate change, increasing rural incomes, promoting sustainable urbanization and helping address governance constraints.

    Last Updated: Oct 05, 2017

  • 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 citizens. 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.

    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 uses 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, 81 provinces have developed provincial commodity investment plans to guide the project and other agricultural investments in the provinces. Based on these plans, 28 rural infrastructure projects have been completed, 149 are under construction and an additional 185 are nearing approval. These will directly benefit 427,000 households. Construction has generated more than 5,800 short-term jobs so far. Early impacts indicate about a 60 percent reduction in travel time and 50 percent increase in road usage. With support from the project, 589 enterprise subprojects, which are at various stages of implementation, are assisting 826 enterprise groups and a total of 109,800 beneficiaries, 45 percent of which are female. For enterprise development activities, average enterprise income have increased by nearly 56% attributed to a rise in production volume and farm gate prices. Users of farm-to-market roads meanwhile have seen a rise in average household income levels by nearly 60% and nearly 79% increase in their on-farm income level.

    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 serves 111,900 hectares, benefiting more than 178,600 farmers and their families. It has also provided organizational development and capacity building activities to 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. A recent Bank study has presented new evidence on the critical role of job seekers’ “socioemotional skills,” or “non-cognitive skills” in successfully finding employment.

    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 June 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.

    The poorest communities have benefited from projects that address their priority needs through a community-driven development approach. The KALAHI-CIDSS National Community Driven Development Project(NCDDP) covers about 5.3 million households and channels additional resources to support 847  poor and disaster-affected municipalities as of March 2017 . Currently,  21,042 projects have been prioritized for NCDDP support, 79 percent of which have been completed. 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 Program has been supported by a range of development partners in providing access roads, farm equipment and post-harvest facilities, water supply systems, and bridges. The program has also promoted social cohesion for around 633,212 Muslims, Christians and Indigenous People in Mindanao – 52 percent of whom are women – since 2006. As of early 2017, 321 conflict-affected communities across Mindanao have benefited from 599 community infrastructure, livelihood and functional literacy projects.

    The Bank has also been actively supporting the peace process between the government and the Moro Islamic Liberation Front through technical and advisory services to various bodies set up to implement the March 2014 Comprehensive Agreement on the Bangsamoro. Ongoing analytical work such as the Mindanao Jobs Report supports job creation, while advisory work supports land conflict management, financial inclusion (including Islamic finance), and conflict resolution.

    The Bank has also been helping the government achieve its goal of improving quality and access to basic water supply and sanitation services, and institutionalizing integrated water resources management. In Metro Manila, Bank-supported projects have contributed to a dramatic increase in 24-hour water supply from 26 percent in 1997 to 99.9 percent at the East Concession Area and 99.8 percent at the West Concession Area in 2015. Sewerage connections also increased from just over 20,000 connections in 1997 to 176,000 in 2015 in Metro Manila.

    Outside Metro Manila, the Bank has been assisting water and sanitation service providers in improving efficiency and sustainability. It has also been helping strengthen local governments’ accountability and management systems on water supply and sanitation services for all, while harnessing private sector participation. The Bank has been supporting the National Water Resources Board (NWRB) in professionalizing small water utilities through the Accredited Technical Service Provider Program. NWRB has trained and accredited 78 service providers which facilitated piped water access to about 44,000 Filipinos across the country.  In rural areas, more than 1.48 million households have gained access to improved sanitationwhile 165 municipalities in 75 provinces have actively participated in eradicating the practice of open defecation through the Zero Open Defecation campaign as of February 2017.

    Last Updated: Oct 05, 2017

Api


LENDING

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

*Amounts include IBRD and IDA commitments



PHOTO GALLERY

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In Depth

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Philippines Development Forum

The government's primary mechanism to facilitate substantive policy dialogue among stakeholders on the country’s development agenda.

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Timeline: The Philippines & the World Bank Group

How the partnership between the Philippines and the World Bank Group adapted to challenges through the years.

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Results Profiles

Our projects cover education, community-driven development, water and sanitation, and poverty-reduction in Mindanao.

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Knowledge for Development Community (KDC)

Get to know the partnership between the World Bank and schools, policy and research institutions.

Additional Resources

Country Office Contacts

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
Washington, 202-473-4709
Washington DC
eastasiapacific@worldbank.org