World Bank: Philippines positioned for inclusive growth 

The Philippine economy is projected to grow by 5.3 percent in 2025, supported by a strong labor market, stable inflation, and sound fiscal and monetary policies, according to the latest Philippines Economic Update (PEU) released by the World Bank on Thursday.

While this is slightly below the 2023–2024 average, the World Bank emphasized that the country’s fundamentals remain solid and that targeted reforms—especially those empowering small and medium-sized enterprises (SMEs)—can help sustain and even accelerate growth in the medium term.

“Boosting private sector growth and job creation can help the Philippines mitigate the impact of global policy uncertainty,” said Zafer Mustafao%u011Flu, World Bank division director for the Philippines, Malaysia and Brunei.

The report points to government investment in infrastructure, increased public-private partnerships, and ongoing reform efforts as crucial pillars for long-term growth. Medium-term GDP is forecast to hold steady at 5.4 percent, underpinned by consistent public investment and improved business conditions.

SMEs remain central to the country’s economic resilience, accounting for 63 percent of employment and 36 percent of gross value added. By unlocking their potential through access to finance, testing facilities, and certification services, the Philippines can foster greater productivity, competitiveness, and global market integration.

“SMEs are critical to inclusive growth,” noted Jaffar Al-Rikabi, World Bank senior country economist. “Strengthening their capabilities through simplified regulations and better access to global value chains will drive sustainable development.”

The World Bank also noted the positive impact of easing inflation, improved domestic supply conditions, and reforms in revenue mobilization and spending efficiency. These actions are expected to support fiscal stability, even amid rising global uncertainty and financial market volatility.

Key recommendations from the report include:

• Making certification services more affordable;

• Streamlining regulatory processes for laboratories and testing equipment;

• Enhancing access to market data and credit facilities for SMEs;

• Promoting linkages between local firms and multinational corporations.

“Firms that export are often more productive and competitive. Helping SMEs reach international markets can deliver lasting economic benefits,” said Jaime Frias, senior economist with the World Bank.

While external risks remain—from global policy shifts to regional conflicts—the Philippines is seen to be navigating the landscape with resilience and reform-minded governance, strengthening its path toward inclusive, investment-driven growth.