Growth in the Philippines has been averaging at about 5 percent over the past 10 years, significantly higher than the rate achieved in the previous two decades. In 2010, the Philippines grew by 7.6 percent, the highest in 30 years. In recent years, the Philippines has restored macroeconomic stability and proved resilient to recent external shocks, such as food and fuel price hikes, the global financial crisis and recession, and the impact of typhoons and El Niño. Rising and counter-cyclical remittances have provided a strong basis for currency stability and a healthy build up of international reserves. The country currently enjoys a savings rate that exceeds investment. Its human resources are in high demand around the world.
Despite these achievements, inclusive growth that benefits the poor has been a continuing challenge for the Philippines. Poverty has remained at about the same level during the last decade, with a little over a quarter of the population below the poverty line. A key challenge has been to deploy these financial and human resources more effectively in the country, especially in rural areas, by improving investment climate and creating job opportunities. The Government has now prioritized an improved business climate, infrastructure development, and public-private partnerships. Investment in human capital and social protection is another critical pillar addressed by the Government to improve the livelihoods of the poor; budget allocations have been increased for health, education, and conditional cash transfer programs.
Good governance remains a high priority for the country. The current Administration’s focus on anti-corruption is intended not only to improve the investment climate for domestic and foreign investors, but also to enhance social service delivery and help reduce poverty through more accountable governance. The country has a dynamic civil society and a vibrant media that help articulate the voice of the public for urgent reforms. The work of civil society groups, often highlighted in the media, has contributed to the successful promotion of specific reforms in the fields of procurement, textbook delivery, budget transparency, and community infrastructure, among others.
To address these challenges and achieve inclusive growth, the Philippines Development Plan 2011-2016 under the administration of President Benigno S. Aquino III has adopted three broad strategies, namely:
Attaining high and sustained economic growth that provides productive employment opportunities;
Promoting equal access to development opportunities through: better education, primary health care and nutrition, and other basic social services; equal access to infrastructure, credit, land, technology, and other productive inputs; and good governance and strong institutions to promote competition; and
Establishing effective and responsive social protection to protect and enable those who do not have the capability to participate in the economic growth process.
Underlying these broad strategies is the overarching theme of good governance. Since President Aquino’s assumption of office in June 2010, he has pursued an agenda of transparency and accountability, civil society participation and anti-corruption.
Lower middle income
GDP (current US$)
Source: World Bank