The country’s fight against poverty is set to receive a major boost following the announcement of a new World Bank partnership with the Philippines that would result in more than $1 billion in aid finance every year until 2018.
The money, coming from the bank and its subsidiaries, will bankroll infrastructure and poverty-reduction projects from next year to 2018.
“With the Philippines among the fastest-growing countries in the world, this strategy offers a unique opportunity for the World Bank Group to support the government’s efforts to improve the lives of the poor and vulnerable by creating more jobs and better opportunities,” World Bank vice president Axel van Trotsenburg said in a statement.
The new Country Partnership Strategy (CPS), endorsed by the bank’s Executive Board this week, would support the country’s goal of promoting and sustaining inclusive growth that reduces poverty and creates more and better jobs.
The indicative new financial commitment from the bank may average $800 million a year, along with non-lending support in the form of analytical and advisory assistance.
International Finance Corp. (IFC), the bank’s private investment subsidiary, has committed $250 million to $300 million in investments in the next couple of years.
Although the Philippines has posted one of the highest growth rates in Asia in the last three years, so-called inclusive growth that benefits those at the bottom of the pyramid and not just enriches those already at the top, remains elusive.
Last year, the Philippine economy grew by 7.2 percent, an expansion outpaced only by China in the region. This year, the government remains confident of meeting its growth target of 6.5 to 7.5 percent.
By 2016, the government wants to drive growth to as high as 8.5 percent. Despite the high growth rates, the Philippines still lags behind in several developmental metrics. Over a fifth of the population remains below the official poverty line, while unemployment, although improving, remains stubbornly high at 7 percent.
Finance Secretary Cesar V. Purisima described the new CPS as an affirmation of the bank’s support for the Aquino administration’s development objectives.