After fifteen years as one of the world’s fastest-growing economies, the Philippines is poised to maintain its upward trajectory by implementing ambitious structural reforms, enhancing social protections, and intensifying climate resilience.
The first-ever OECD Economic Survey of the Philippines, presented today in Manila by OECD Secretary-General Mathias Cormann and Finance Secretary Frederick D. Go, forecasts a significant acceleration in economic output. Following a projected growth of 4.4% in 2025, GDP is expected to climb to 5.1% in 2026 and 5.8% in 2027.
The report highlights a period of historic transformation for the nation. Since 2010, the Philippines’ economic output has more than doubled, while poverty rates have been slashed by over 50%. “The Philippines’ economy has demonstrated remarkable strength and resilience,” said OECD Secretary-General Mathias Cormann. “Ambitious reforms to strengthen competition and formal job creation are needed to sustain income growth and raise living standards. In parallel, stronger efforts on climate change adaptation would reduce the economic, social, and financial risks from extreme weather.”
The survey outlines a strategic roadmap focused on three critical pillars:
1. Productivity and Market Competition
To lower input costs and boost efficiency, the OECD recommends targeted reforms in the electricity and telecommunications sectors:
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Energy: Prioritizing the effective separation of network infrastructure from energy generation.
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Telecommunications: Implementing open-access rules to require infrastructure sharing at regulated tariffs.
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Bureaucracy: Streamlining administrative procedures to foster a more attractive environment for foreign and domestic investors.
2. Fiscal Discipline and Revenue Optimization
The report advocates for a “prudent path” for public debt, suggesting:
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Phasing out VAT exemptions for private healthcare, education, and senior citizens, replaced by targeted social transfers.
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Combating corruption in public investment to ensure maximum spending efficiency.
3. Social Protection and Formal Employment
The OECD proposes a unified, multi-tiered social protection system. This model combines universal core benefits (tax-funded) with progressive social contributions. Additionally, the report suggests aligning minimum wages more closely with regional productivity to incentivize formal hiring and reduce the informal workforce.
As the Philippines faces escalating risks from extreme weather, the OECD emphasizes the need for climate-resilient infrastructure and early warning systems, particularly in high-poverty regions.
The Survey also calls for:
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Effective water pricing in Metro Manila to stop land subsidence caused by groundwater extraction.
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Increased coal excise taxes to accelerate the transition toward renewable energy and meet national emission targets.
