World Bank: Reforms, private sector key to Phl growth

The World Bank has emphasized that boosting private sector activity and implementing key structural reforms will be crucial in accelerating the Philippines’ economic growth in the coming years.

In its latest Philippine Economic Update (PEU) released Thursday, the World Bank projected the country’s economy to grow by 5.3% in 2025, with a slight uptick to 5.4% in 2026 and 5.5% in 2027.

The report credited the positive outlook to strong job creation, stable inflation, and continued support from fiscal and monetary policies—all of which are expected to cushion the impact of global trade challenges.

To further strengthen the country’s growth path, the World Bank called for reforms aimed at empowering high-potential small and medium enterprises (SMEs). It recommended improving access to testing facilities and certification services, simplifying regulations on laboratory operations and testing equipment imports, and enhancing global recognition of Philippine certifications and standards.

In a briefing in Makati City, World Bank Senior Country Economist for Economic Policy Jaffar Al-Rikabi stressed that reforms in infrastructure, regulatory processes, and revenue mobilization will be key.

“The second pillar is really around improving governance and streamlining business regulations so that the business environment can be improved,” Al-Rikabi said.

He also underscored the need to mobilize private capital to complement government spending and support the medium-term fiscal strategy. This, he added, would help the country rebuild fiscal buffers and improve expenditure efficiency.

Risks to growth, the World Bank noted, include global policy uncertainty, potential escalation of regional conflicts, and resulting increases in commodity and logistics costs.

Despite these risks, inflation is expected to remain manageable, with the World Bank forecasting headline inflation to settle at 2.4% this year, at the lower end of the government’s target range.