Philippines

The Philippines, categorized as a lower-middle-income country, has emerged as one of the most dynamic economies in the East Asia Pacific region since 2010. Over the past two decades, its Gross National Income (GNI) per capita has more than tripled, reaching $4,470 in 2024. This economic momentum has created 11.7 million new jobs, with job growth outpacing the increase in the labor force, resulting in historically low unemployment and underemployment rates. Consequently, the Philippines has seen a significant poverty reduction, underscoring the positive effects of job-driven growth.

The poverty rate in the Philippines decreased from 16.7 percent in 2018 to 15.5 percent in 2023, despite experiencing a temporary rise due to the COVID-19 pandemic, high global commodity prices, and prolonged elevated global interest rates, among other factors. Using the international poverty line for lower-middle-income countries of $4.20 per day (in 2021 purchasing power parity), poverty is projected to decline further from 16.9 percent in 2023 to 15.7 percent in 2024. Notably, in 2023, the Gini Index fell below the threshold for high inequality for the first time on record.

The country’s economic dynamism is fueled by increasing urbanization, a large and youthful population, and strong consumer demand, all supported by a vibrant labor market and robust remittances that have raised incomes among the most vulnerable groups. The private sector remains strong, particularly with the rapidly expanding services sector, which includes business process outsourcing, wholesale and retail trade, and tourism.

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The Philippines is on track to attain upper-middle-income country (UMIC) status, moving up from its current lower-middle-income status after 15 years of robust, job-creating, and pro-poor economic growth. In 2024, the country’s GDP grew by 5.6 percent, placing the Philippines among the top performers in the region in terms of growth.

Economic growth is expected to remain one of the fastest in the region, despite a global slowdown and increased trade policy uncertainty.

This resilience is supported by several growth-enhancing factors, including:

1. Strong domestic demand, backed by stable inflation and eased monetary policy;
2. Sustained public investment, despite ongoing fiscal consolidation; and
3. The impacts of recent investment policy reforms could stimulate private investment.

The government is committed to significant investments in human and physical capital over the medium and long term to promote inclusive growth.

The Philippine government aims to accelerate revenue mobilization efforts to finance its inclusive growth goals sustainably and achieve its medium-term fiscal targets. Recently enacted tax reforms that broadened the tax base are expected to lead to a marginal increase in tax revenues by 2025.

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Since the first loan in 1957, the World Bank’s projects in the Philippines have delivered benefits. Support has grown to include financing, analytical work, policy advice, and capacity development aligned with the country’s agenda.

The Bank has supported the conditional cash transfer Pantawid Pamilyang Pilipino Program (4Ps) since 2008. Without 4Ps, poverty in 2018 would have been 7% higher, inequality 0.9% higher, and the poverty gap 11% larger. The program improved school enrollment and attendance and expanded maternal and child health services access.

Between 2014 and 2024, the Bank provided $779 million for Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services (Kalahi-CIDSS), financing 54,843 subprojects benefiting 17.4 million households, including 1.5 million Indigenous households. Launched in 2014, the Philippine Rural Development Project built and rehabilitated farm-to-market roads, cutting travel time and costs and raising annual real incomes for farmer and fisher households. Over 1.55 million farmers and fisherfolk, including 508,350 women, have benefited.

As of August 2025, the International Bank for Reconstruction and Development (IBRD) has 20 active operations totaling $8 billion across 14 sectors, led by urban, resilience, and land (21%); energy and extractives (10%); and agriculture and food (9%). The Trust Fund portfolio includes 105 active grants totaling nearly $94.4 million for technical assistance, implementation support, and knowledge.

Since 1962, the International Finance Corporation (IFC) has invested about $6 billion in more than 210 projects, prioritizing financial inclusion, sustainable infrastructure, and private-sector capacity.

The Multilateral Investment Guarantee Agency (MIGA) explores support for domestic and cross-border investment through the Local Currency Mobilization Facility, trade finance, and non-honoring guarantees.

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The World Bank Group’s Country Partnership Framework (CPF) for July 2025 to June 2031 sets the stage for a new era of collaboration, grounded in a unified “One WBG” approach. This approach combines the collective strengths of the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA).

The CPF is aligned with the Philippines’ goal of achieving upper-middle-income status and its long-term vision of a prosperous and inclusive society. It will support the country’s efforts in three key areas, aiming to achieve significant outcomes: (i) improving access to quality health and education to close human capital gaps and empower Filipinos; (ii) creating more private sector jobs to increase productivity and incomes, thereby sustaining inclusive growth; and (iii) strengthening socioeconomic resilience to safeguard lives and livelihoods from natural hazards and climate change. Additionally, the CPF emphasizes enhancing public sector efficiency to improve implementation, deliver results, and achieve lasting impact across all areas.

The partnership aims to deliver the following key results by 2031:

Outcome Area 1: Improved Access to Quality Health and Education

• 19 million people receiving quality health, nutrition, and population services
• 15 million students supported with better education

Outcome Area 2: More Private Sector Jobs

• 4 million new or better jobs
• 19 million people using broadband internet
• US$2 billion in total private capital enabled or mobilized

Outcome Area 3: Stronger Socioeconomic Resilience

• 12.5 million beneficiaries of social safety net programs
• 13 million people with enhanced resilience to climate risks

Cross-cutting: Efficient Public Sector

• 20 million people using digitally enabled government services

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• Australia
• Canada
• Delegation of the European Union to the Philippines
• Japan International Cooperation Agency
• United Nations Development Programme
• United Kingdom

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