The Philippines has been one of the world's fastest-growing economies over the past 15 years. Ambitious pro-competition reforms to boost productivity and improvements in social protection to support formal job creation, along with fiscal prudence and climate action, would maintain this growth momentum, according to a new OECD report.
The first OECD Economic Survey of the Philippines forecasts that GDP will grow at 5.1% in 2026 and 5.8% in 2027, up from 4.4% in 2025. Inflation is expected to rise to 2.6% in 2026 and 3.0% in 2027, the mid-point of the central bank's target range.
"The Philippines' economy has demonstrated remarkable strength and resilience: since 2010 output has more than doubled and poverty has more than halved," OECD Secretary-General Mathias Cormann said, presenting the Survey in Manila alongside the Philippines' Secretary of Finance Frederick D. Go. "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."
Strong fiscal discipline would put public debt on a prudent path. Phasing out value-added tax exemptions for private healthcare, education, and senior citizens, combined with targeted social transfers, would optimise taxes, transfers and revenue collection. Addressing corruption in public investment would improve spending efficiency as well as the business and investment climate.
Pro-competition reforms are key to boost productivity growth, especially in the electricity and telecommunications sectors, where weak competition keeps prices and input costs high for the rest of the economy. In electricity, reforms need to prioritise effective separation between network infrastructure and energy generation. In telecommunications, open-access network rules that require incumbents to share infrastructure at regulated tariffs could allow households and firms to benefit from lower prices. Streamlining administrative procedures across the economy, including for foreign investors, would stimulate further investment.
A unified, multi-tiered social protection system, with universal core benefits funded by general tax revenues and top-up benefits financed by progressive social contributions, would enhance social protection and incentives for formal job creation. Aligning minimum wages more closely with regional productivity would reduce the shares of the workforce working informally and earning less than the minimum wage.
The Philippines faces growing risks from extreme weather. Investments in climate adaptation, such as resilient infrastructure, early warning systems and expanded home insurance, should prioritise areas where poverty and high climate risks coincide. Along with better flood management, Metro Manila needs more effective water pricing to address land subsidence by excessive groundwater extraction. Increasing the coal excise tax will accelerate the phase-out of coal-based electricity generation, helping to reduce emissions and meet climate targets.
