The Washington-based World Bank said it has approved an $800-million development policy loan (DPL) to sustain the Philippines’ momentum and shield it from ongoing domestic and external shocks after the economy officially reached the upper-middle-income gross national income (GNI) per capita threshold.

This financial support, approved by the World Bank on March 12, comes on the back of the Philippine economy doubling in size every 13.5 years since 2010, with the new funding specifically targeting reforms to strengthen fiscal resilience, modernize the workforce, and “crowd in” higher-quality private investment.

“This support comes as the Philippines’ GNI per capita has reached the threshold of upper-middle-income countries,” the World Bank said.

“Yet, the country today faces domestic and external shocks that underscore the value of ongoing fiscal and structural reforms, to reach higher, more job-rich growth, and to reduce vulnerability to shock,” it added.

According to the multilateral lender, the financing intends to support the Philippines’ program of policy and institutional reforms. It serves as policy-based budget support aimed at strengthening the country’s economic foundations.

World Bank senior economist Jaffar Al‑Rikabi said the reforms are intended to attract more private investment, generate more and better jobs, and move the Philippine economy toward higher-value industries.

Part of the loan supports fiscal management reforms, including measures to boost domestic resource mobilization and improve the efficiency of public spending to protect funding for infrastructure and human capital investments.

It also focuses on improving the business-enabling environment by streamlining regulations, lowering compliance costs for firms, promoting competition, and encouraging private participation and foreign direct investment (FDI) in key sectors.

Further, the initiative upgrades technical and vocational education and strengthens the innovation ecosystem to help workers secure better jobs and support firms’ talent needs.

“By strengthening fiscal foundations, improving the business climate, and investing in human capital, this effort will unlock private investment and equip people with the skills they need to find jobs and thrive,” said Zafer Mustafaoğlu, World Bank division director for the Philippines, Malaysia, and Brunei.

Mustafaoğlu added that the reforms would help attract quality investments, raise productivity, and create better livelihood opportunities, particularly for young people and women.

Finance Secretary Frederick D. Go said the financing secured reflects the lender’s “strong vote of confidence in the Philippines’ growth path.”

“Part of what makes this financing so important is our firm commitment to fiscal discipline, ensuring that every peso is spent wisely to create jobs, support businesses, and strengthen public services for the benefit of all Filipinos,” Go said in a separate statement. - Derco Rosal