Philippines: Country Context

The Philippines experienced sustained high rates of economic growth and improved development outcomes in the past decade and is on track to achieve upper-middle-income country status in the next few years These achievements are even more impressive in the context of recurring severe natural disasters and conflict in Mindanao.

Nevertheless, the Philippines still struggles with fundamental structural issues. These include very high inequality, still-high levels of poverty and vulnerability, a weak investment climate and a private sector dominated by a few large conglomerates, underperformance of the agriculture and manufacturing sectors, a large infrastructure gap, inadequate quality of education and health services, and low capacity at the local government level. The capture of the political system by elites is both a cause of many of these problems and a constraint to addressing them.

More about the Background and Country Context

 

Despite the many constraints, during the past decade, the World Bank Group made a substantial contribution to the improved economic performance of the Philippines in the areas relevant to the country’s development priorities and based on its comparative advantages. The impact of the Bank Group’s contribution was significant in strengthening macroeconomic management, governance, social protection, disaster risk management; upgrading rural infrastructure; and contributing to peace and reconciliation in Mindanao. The Bank Group’s support was less successful in promoting private sector development and financial inclusionadvancing the climate change mitigation agenda, and enhancing the capacity of subnational governments. The generally positive outcomes of the Bank Group–supported program over a sustained period represent a significant achievement. But there is scope for the World Bank to have a greater impact.

Therefore, this evaluation makes the following recommendations:

  • consider further updating the well-established long-running programs;
  • improve the balance and focus of analytical work, thereby responding to the government’s requests and including implementation support;
  • consider making Mindanao a focal area for support; and
  • better coordinate and sequence World Bank and International Finance Corporation interventions to more effectively address weaknesses in private sector development.