Overview

  • The Philippines is currently one of the most dynamic economies in the East Asia region, with sound economic fundamentals and a globally recognized competitive workforce. Despite a weak external environment, growth in 2016 accelerated to 6.8 percent year-on-year from 5.9 percent in 2015 on the back of upbeat domestic demand. The country’s economy is expected to remain a top regional performer with growth projected at 6.9 percent in 2017 and 2018.

    Growth in recent years went hand-in-hand with job creation and poverty reduction. The poverty rate declined from 10.5 percent in 2012 to 6.6 percent in 2015 by the $1.90 a day poverty line. Between 2012-2015, shared prosperity increased: the income of the bottom 40 percent grew much faster than the national average. Specifically, the income of the bottom 20 percent grew at 16 percent while the average grew 6 percent. While urban and rural poverty declined, rural poverty remained nearly three times as high as in urban areas.

    The strong performance of 2016, and continued policy commitment to the planned increase in public infrastructure spending, are expected to carry the economy’s growth momentum over to 2017-2018. Growth in capital investment is projected to be the economy’s primary growth engine and will be tied to the successful implementation of the administration’s infrastructure investment push. Consumption is expected to be supported by the continued expansion in credit and sustained remittance growth. As global demand recovers, exports are expected to rebound, but imports will expand further to fill the domestic capital goods requirements.

    In February 2016, the new Philippine Development Plan 2017-2022 was approved. It outlines the government’s medium-term policy priorities to achieve more inclusive growth. The government is embarking on an ambitious reform agenda to deliver equitable tax reforms, enhance market competition, and improve the ease of doing business, while continuing to sustainably ramp up public investments in infrastructure and social services. Crucial support is being extended to the agriculture sector where the most number of poor are. Emphasis is also given to peace and economic development in the largest province of Mindanao, which includes conflict-affected areas and is the poorest region of the Philippines.

    Last Updated: Apr 12, 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 2015-2018 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 strategy is currently grounded in five 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 vulnerableimproving 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.

    •       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.

    The strategy is undergoing a mid-term review to ensure that it is closely aligned with and responsive to the national development priorities of the Duterte administration. In particular, the review takes a look at the progress and results achieved, lessons learned on implementing the country partnership strategy, as well as opportunities for supporting the government through the new Philippine Development Plan 2017-2022.

    In line with the CPS and the Bank Group’s twin goals of eradicating extreme poverty and boosting shared prosperity, the investment portfolio structure indicates a strong support almost equally to 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 March 2017, the Bank's active portfolio in the Philippines consists of 12 operations financed by IBRD loans, GEF grants, and large recipient-executed grants with total net commitment of $2.8 billion (including one CAT-DDO operation of $500 million).

    The most recent project approved by the World Bank Board of Executive Directors is the Metro Manila Bus Rapid Transit Project, the first IBRD project under the new administration. The Bank is working with the new government in the preparation of projects in the areas of climate change (Metro Manila Flood Management), governance (E-Government Transformation and Customs and Trade Modernization), agriculture (Inclusive Partnership for Agricultural Competitiveness), and policy-based lending (Fiscal Transparency DPL).

    Its private sector arm, the International Finance Corporation (IFC), mobilizes private sector investment and supports job creation in sectors like agriculture and agribusiness, trade and logistics, infrastructure and public-private partnerships. It has a portfolio of $599 million (including $100 million in mobilization). The bulk of the portfolio is from the financial markets sector with 54 percent followed by infrastructure with 41 percent and manufacturing, agribusiness and services with 5 percent.

    Last Updated: Apr 12, 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 the development of agriculture enterprise. It uses tools such as geotagging 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, 79 provinces have developed provincial commodity investment plans to guide the projects 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, 452 enterprises, which are at various stages of implementation, are assisting 608 enterprise groups and a total of 88,000 beneficiaries, 45 percent of which are female.

    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 110,500 hectares, benefiting more than 162,100 farmers and their families. It has also provided organizational development and capacity building activities to 928 Irrigators Associations.

    The Bank’s assistance through the Learning, Equity and Accountability Program Support (LEAPS) has been supporting government efforts to improve early grade learning outcomes, particularly for disadvantaged children. To date, the project has helped train more than 20,000 teachers and school principals/head teachers on how to teach early grade reading and mathematics. The project has conducted two early grade reading and math assessments to identify key issues of low learning performance in early literacy and mathematics of students from grades 1-3. This has allowed teachers to adjust their teaching methods and help children who struggle with reading and math. A financial management manual was developed to facilitate and strengthen education service delivery.  A related study has identified a number of bottlenecks and provided policy recommendations to improve education quality and efficiency.

    The first Social Welfare and Development Reform Project (SWDRP) has been helping 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 been supporting 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 2016. An important feature of the project has been 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 5.1 million poor households in 2015 has helped ensure that government programs are better targeted for those who need it most. Given the project’s success, the Bank has provided new 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 million households and channels additional resources to support 794 poor and disaster-affected municipalities as of December 2016. Currently, 19,000 projects have been prioritized for NCDDP support, 79 percent of which have been completed. Supported community projects include facilities for flood/erosion control and environmental protection, as well as basic social services such as health clinics, schools, day care centers and water systems.

    To manage the risks posed by natural disasters, the Bank has provided a contingent line of credit. This is combined with technical assistance to help strengthen investment planning and regulations to reduce disaster risk. The innovative financing has also helped 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. It has also promoted social cohesion for around 650,000 people in Mindanao – 53 percent of whom are women – since 2006. As of early 2017, 314 conflict-affected communities across Mindanao have benefited from 577 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 sanitation while 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: Apr 12, 2017

Api


LENDING

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

*Amounts include IBRD and IDA commitments


PHOTO GALLERY

More Photos Arrow

In Depth

Image

Philippines Development Forum

The primary mechanism of the Government for facilitating substantive policy dialogue among stakeholders on the country’s development ...

Image

Timeline: The Philippines & the World Bank Group

A slideshow on adapting to challenges through the years.

Image

Results Profiles

Take a look at results of World Bank-supported projects in the Philippines covering education, community-driven development, water and ...

image

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