The World Bank is crafting its lending plan for the Philippines covering the years 2025 to 2028, the period during which the country will likely rise to upper middle-income status and gradually lose access to preferential borrowing rates.
The World Bank Group Philippines Country Partnership Framework 2025-2028, which coincides with the second half of the Marcos administration's term and a new Philippine president in mid-2028, wants to fill the lingering socio-economic gaps despite robust economic growth and reduced poverty in the country.
The emerging country partnership framework of the Washington-based multilateral lender for the Philippines in the next four years targets four high-level outcomes, namely: inclusive growth and jobs; strong human capital; resilient communities; and environmental sustainability.
To achieve these four ultimate goals, the Philippines needs to strengthen its public sector and accelerate digital development, according to the World Bank's consultation materials.
The World Bank's proposed Philippine financing program for 2025 to 2028, in particular, will support future projects to increase firms' and farms' productivity; foster a competitive business environment for more and better jobs; promote inclusive finance; improve health and nutrition; and enhance the quality of education and skills.
Forthcoming World Bank loans to the Philippines will also be aimed at improving resilience to shocks and climate change; bringing better quality services in conflict-affected and poor, disadvantaged communities; and transitioning to a greener, climate-resilient economy.
Also, the new framework shall be aligned with the Marcos administration's medium-term socio-economic goals under the Philippine Development Plan (PDP) 2023-2028. The current six-year PDP ultimately aims to slash the national poverty rate to single-digit level when President Marcos steps down in 2028.
The World Bank noted that its current country partnership framework for the Philippines, ending in December of this year, supported public competitiveness, health, peace, resiliency and social protection programs and projects.
In particular, the 2019-2024 country partnership framework provided loan financing to sustain economic recovery amid the COVID-19 pandemic; increase agricultural productivity; reduce stunting among Filipino children through nutrition interventions; provide social protection; manage disaster risks; and disburse pandemic-related emergency support.
Partly aided by World Bank development financing, the lender noted that "the Philippines' economic growth accelerated over the past decades."
However, challenges remained even as the Philippines aspires to be an upper middle-income economy by 2025 or 2026.
"Poverty has been declining but spatial inequalities remain... Poverty reduction has been faster in lagging regions. However, they continue to have higher poverty incidence and lower productivity levels than the rest of the country," the World Bank noted. In the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), for instance, the poverty level is two times above the national rate.
Other lingering development challenges in the Philippines included gaps that remain in basic services and human capital despite income growth; lack of quality education; and abundance of climate and disaster risks which pose serious challenges to growth and livelihoods, the World Bank said.
The Philippines was the World Bank's fifth-biggest borrower during the lender's fiscal year 2023, which coincided with President Marcos' first full-year in office, with a total of $2.3-billion worth across six approved loans.
Once the Philippines becomes an upper-middle income country, it will eventually no longer enjoy low interest rates slapped on official development assistance (ODA) or cheap loans extended by multilateral lenders like the World Bank, the Manila-based Asian Development Bank (ADB) and the China-led Asian Infrastructure Investment Bank (AIIB), as well as its bilateral development partners such as Japan, China and South Korea, among others.