The Philippines recorded an impressive growth over the past 15 years but structural reforms to boost job creation could help accelerate economic growth to as high as 6.8 percent, transforming the country into a middle-class society by 2040, the World Bank said.

In its Country Growth and Jobs Report released on Tuesday, the World Bank said the Philippines was able to post rapid growth, doubling its gross domestic product (GDP) since 2010.

The report noted that 11.7 million jobs were created which led to a record low 3.8 percent unemployment rate in 2024.

“Job creation has been at the center of Philippines’ impressive growth story over the past 15 years,” World Bank Division Director for Philippines, Malaysia and Brunei, East Asia and the Pacific Zafer Mustafaoglu said during the report’s public launch in Makati Shangri-la Hotel.

“The country is on the verge of becoming an upper-middle-income country, a testament to the resilience and dynamism of its people. It is vital that the benefits of growth are inclusive and reach all segments of society, particularly the poor and most vulnerable. Jobs are central to this conversation,” he added.

To achieve its goal of becoming a middle-class society, the World Bank highlighted the need to sustain annual growth of 6 to 10 percent for decades.

To help boost growth, the international lender cited the need to sustain public investment with a focus on connectivity infrastructure, support private climate adaptation by removing bottlenecks and prioritizing resilience, boost human capital by fast-tracking implementation of Enterprise Based Education and Training Act, and scaling up STEM and digital skills to better address Artificial Intelligence challenge, and ensure that regulations catch up with infrastructure progress to maximize investment impact.

Removing barriers to market entry, facilitating land consolidation to enable productivity-enhancing reallocation in agriculture, adopting a proportional contribution system for part-time work to boost female labor participation and correct talent misallocation, negotiating and implementing trade agreements that drive domestic reform and global integration, and implementing competition-enhancing reforms in energy, logistics, and telecoms to cut costs for tradable sectors are also needed to boost growth.

The report also highlighted the need to strengthen local service delivery by building local government unit capacity and aligning incentives, introducing supplier development programs to link small and medium enterprises to large firms, and focusing innovation support where conditions are ripe, consolidate programs for scale and create room for deeper venture capital markets.

World Bank Lead Economist Gonzalo Varela said implementing all the proposed reforms would increase annual real gross domestic product (GDP) growth by 1.4 percentage points, reaching an average of 6.8 percent annual growth rate over 2025 to 2040.

These reforms will also create over 5.1 million additional jobs by 2040 and raise real wages by 12.9 percent, driven by wage increases in the manufacturing and services sectors.

“The Philippines has demonstrated that investment-led growth can be inclusive. However, to secure a prosperous, job-rich future, the country must now double down on reforms that unlock productivity, empower regions, and connect to global markets. The next leap is within reach,” he said.

Department of Economy, Planning, and Development Secretary Arsenio Balisacan vowed that the government would ramp up efforts to create an enabling environment for business by strengthening institutions and governance and shaping regulatory frameworks that facilitate the mobilization of resources to meet pressing development challenges.

“Just as critical, public investment must remain fiscally sustainable. To this end, we are looking towards more focused support and spending on policies, programs, and projects that have been proven to work and are most likely to succeed,” Balisacan said in a recorded message.

“We focus especially on strategic areas such as education, healthcare, food security, and agriculture, as well as physical and digital connectivity, ensuring that every peso spent drives meaningful progress and delivers tangible benefits to the Filipino people,” he added. (PNA)