Exhibit 99.D

DESCRIPTION OF THE REPUBLIC OF THE PHILIPPINES

TABLE OF CONTENTS

 

		Page
CERTAIN DEFINED TERMS AND CONVENTIONS			D-2
SUMMARY REPUBLIC OF THE PHILIPPINES			D-4
REPUBLIC OF THE PHILIPPINES			D-7
DEBT TABLES OF THE REPUBLIC OF THE PHILIPPINES			D-119

 

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CERTAIN DEFINED TERMS AND CONVENTIONS

Statistical information included in this annual report is the latest official data publicly available at the date of this annual report. Financial data provided in this annual report may be subsequently revised in accordance with the Republic’s ongoing maintenance of its economic data, and that revised data will not be distributed by the Republic to any holder of the Republic’s securities. As used in this annual report, the term “N/A” identifies statistical or financial data that is not available.

All references in this annual report (a) to the “Republic” or the “Philippines” are to the Republic of the Philippines, (b) to the “Government” are to the national government of the Philippines and (c) to “Bangko Sentral” are to Bangko Sentral ng Pilipinas, the central bank of the Philippines.

The fiscal year of the Government commences on January 1 of each year and ends on December 31 of such year.

Unless otherwise indicated, all references in this annual report to “Philippine Pesos,” “pesos” or “₱” are to the lawful national currency of the Philippines, those to “dollars,” “U.S. dollars” or “$” are to the lawful currency of the United States of America, those to “euro” and “€” are to the currency introduced on January 1, 1999 at the start of the third stage on European Economic and Monetary Union and those to “Japanese yen,” “yen” or “JPY” are to the lawful national currency of Japan. References to “SDR” are to Special Drawing Rights of the International Monetary Fund (the “IMF”).

This annual report contains translations of some peso amounts into U.S. dollars for the convenience of the reader. Unless otherwise specified, the translations were made at the exchange rate as stated in the Bangko Sentral Reference Exchange Rate Bulletin published by the Treasury Department of the Bangko Sentral on the relevant date. No representation is made that the peso amounts actually represent the U.S. dollar amounts or could have been converted into U.S. dollars at the rates indicated, at any particular rate or at all.

Economists show Gross Domestic Product (“GDP”) and Gross National Income (“GNI”) in both current and constant market prices. GDP and GNI at current market prices value a country’s output using the actual prices for each year, whereas GDP and GNI at constant market prices (also referred to as “real” GDP and GNI) value output using the prices from a base year, thereby eliminating the distorting effects of inflation and deflation. In the first quarter of 2011, the standards under the Philippine System of National Accounts (the “PSNA”) for the calculation of GDP and GNI (known as gross national product (“GNP”) prior to the 2011 revisions) were revised, changing the constant base year for these calculations from 1985 to 2000. In April 2020, the PSNA further revised the PSNA standards, changing the constant base year for GDP and GNI calculations from 2000 to 2018. See “— GDP and Major Financial Indicators.” In this annual report, unless otherwise specified, data has been presented on the basis of the PSNA standards as revised in 2020. Unless otherwise specified, growth figures for GDP and GNI in this annual report and any annual report supplement are period-on-period comparisons of real GDP and GNI, respectively, using the year ended December 31, 2018 as the base year. In March 2020, the Government stopped reporting GDP and GNI figures based on the year ended December 31, 2000.

The balance of payments statistics released by the Bangko Sentral are based on the trade-in-goods statistics compiled by the National Statistics Office (the “NSO”). In March 2013, the Bangko Sentral adopted the sixth edition of the IMF’s Balance of Payments Manual (“BPM6”) framework covering balance of payments statistics for 2011 onwards, pursuant to which the property income and expense accounts have been revised. Unless otherwise specified, balance of payments statistics in this annual report and any annual report supplement are presented on a BPM6 basis. As a result, these statistics may be different from data previously reported by the Republic.

 

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In July 2013, the Bangko Sentral adopted a system for compiling and reporting monetary statistics called the Standardized Report Forms (the “SRF”) format as part of the Bangko Sentral’s adherence to international best practices in statistical compilation. The SRF is a unified international framework for reporting monetary and financial statistics to the IMF. Under the SRF, foreign and domestic assets reported by the Bangko Sentral are no longer presented net of liabilities; rather, liabilities are reported separately. The presentation of general Government assets, however, remains net of liabilities. The adoption of the SRF system did not result in any change to overall monetary balances. However, the Bangko Sentral has, in connection with the adoption of the SRF, also implemented certain recommendations from the IMF pertaining to the inclusion of unsecured subordinated debt and accrued interest expense, which has given rise to minor changes in amounts previously reported.

Any discrepancies in the tables included herein between the amounts listed and the totals thereof are due to rounding.

 

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SUMMARY REPUBLIC OF THE PHILIPPINES

General

The Philippine archipelago has over 7,000 islands with a total land area of approximately 300,000 square kilometers. The islands are grouped into three geographic regions: Luzon, the largest island, in the north, covering an area of 141,395 square kilometers; Visayas in the central region, covering an area of 56,606 square kilometers; and Mindanao in the south, covering an area of 101,999 square kilometers. Manila is the Republic’s capital. As of the 2024 Census of Population and Housing (the “2024 Census”) conducted by the NSO, the Republic’s population was estimated at approximately 112.7 million.

Government and Politics

The Republic’s current constitution (the “Constitution”) was adopted by plebiscite in 1987. The ratification of the Constitution in 1987 restored a presidential form of government consisting of three branches: executive, legislative and judiciary. Executive power is vested in the President, who is elected by direct popular vote and who may serve one term of six years. Legislative authority is vested in the Congress of the Philippines, which consists of the Senate and the House of Representatives. Judicial power is vested in the Supreme Court and in various lower courts.

Economy

The Philippines has a mixed economy in which the Government is directly engaged in certain economic activities through government financial institutions (“GFIs”) and government-owned and controlled corporations (“GOCCs”), which are corporations of which at least 51% of the capital stock is owned by the Government either directly or indirectly through its instrumentalities. The Government actively encourages domestic and foreign private investment. The Philippines has undertaken liberalization of trade and investment in tandem with the deregulation of the financial system, foreign exchange liberalization, tax reforms, acceleration of privatization, enhancement of competition in the provision and operation of public utilities, and deregulation of the oil and power industries.

 

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Selected Economic Information of the Republic of the Philippines

 

		2021				2022				2023				2024(1)				2025(4)				2026(6)
		(₱ in billions, except as indicated)
GDP (at then-current market prices)			19,410.6				22,028.3				24,313.6				26,436.8				28,009.9				6,933.9
GDP (at constant 2018 prices)			18,540.1				19,945.6				21,046.4				22,249.1				23,228.6				5,627.0
GDP per capita, PPP concept (in $ at then- current market prices)(2)			9,101				10,406				11,288				12,123				12,900				13,366	(14)
GDP growth rate (%) (at constant 2018 prices)			5.7				7.6				5.5				5.7				4.4				2.8
Consumer price inflation rate (2018 CPI basket)(3)			3.9				5.8				6.0				3.2				1.7				4.1
Government surplus/(deficit) as % of GDP (at then-current market prices)			(8.6	)			(7.3	)			(6.2	)			(5.7	)			(5.6	)			N/A
Government debt at end of period as % of GDP (at then-current market prices)			60.4				60.9				60.1				60.7				63.2				N/A
Public sector borrowing requirement(5)			(1,619.3	)			(1,556.6	)			(1,420.2	)			(1,418.0	)			(1,485.9	)			N/A
Consolidated public sector financial position(7)			(1,092.0	)			(804.9	)			(777.5	)			(730.3	)			(603.8	)			N/A
Current account surplus/(deficit) as % of GDP (at then-current market prices)			(1.5	)			(4.5	)			(2.8	)			(4.0	)			(3.3	)			N/A
Overall balance of payments position at end of period as % of GDP (at then-current market prices)(8)			0.3				(1.8	)			0.8				0.1				(1.1	)			N/A
Direct domestic debt of the Government (in million ₱)(9)(10)			8,170,414				9,208,387				10,017,930				10,930,415				12,116,253				12,415,390	(15)
Direct external debt of the Government (in million $)(10)(11)			69,803				75,436				82,976				88,525				95,111				98,395	(15)
Public sector domestic debt(12)			7,315.0				8,538.9				9,753.3				10,741.6				N/A				N/A
Public sector external debt(11)(12)			3,939.8				4,606.1				4,961.4				5,412.1				N/A				N/A
Unemployment rate (%)			7.8				5.4				4.4				3.8				4.2				5.0
Gross international reserves (in billion $)(10)(13)			108.8				96.1				103.8				106.3				110.8				104.0	(16)

Sources: Philippine Statistics Authority; Bureau of the Treasury; Department of Finance; Bangko Sentral.

Notes:

 

(1)	Preliminary data as of and for the year ended December 31, 2024, unless otherwise stated.

(2)	Figure represents annualized per capita GDP, PPP concept. Amounts in pesos have been translated into U.S. dollars using the average Bangko Sentral reference exchange rates for the applicable period.

(3)

Effective February 4, 2022, the base year of the Consumer Price Index (“CPI”) was updated from 2012 to 2018. The rebasing of the CPI is done periodically (1) to ensure that the CPI market basket continues to capture goods and services commonly purchased by households over time; (2) to update expenditure patterns of households; and (3) to synchronize its base year with the 2018 base year of the GDP and other indices. 2022 figures are based on preliminary data as of July 31, 2022. 2022 data is an average of monthly inflation figures.

 

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(4)	Preliminary data as of and for the year ended December 31, 2025, unless otherwise stated.

(5)	Represents the aggregate deficit or surplus of the Government, the Central Bank-Board of Liquidation (the “CB-BOL”), the Oil Price Stabilization Fund and the major GOCCs (as defined below), the debt of which comprises virtually all the debt incurred by GOCCs.

(6)	Preliminary data as of and for the three months ended March 31, 2026, unless otherwise stated.

(7)	Comprises the aggregated deficit or surplus of the Government, the CB-BOL’s accounts, the major GOCCs, the Social Security System, the Government Service Insurance System, Bangko Sentral, the GFIs and local government units.

(8)	Overall balance of payments has been revised to reflect late reports, post-audit adjustments and final data from companies. See “Balance of Payments—Revisions” for a more detailed discussion of recent and pending revisions to previously reported data.

(9)

Represents debt of the Government only and does not include other public sector debt. Includes direct debt obligations of the Government, the proceeds of which are on-lent to GOCCs and other public sector entities, but excludes debt guaranteed by the Government and debt originally guaranteed by other public sector entities for which the guarantee has been assumed by the Government.

(10)	Amounts in original currencies were translated into U.S. dollars or pesos, as applicable, using the Bangko Sentral reference exchange rates at the end of each applicable period.

(11)	Represents debt of the Government, the major GOCCs, the CB-BOL, Bangko Sentral and the GFIs.

(12)	Includes public sector debt, whether or not guaranteed by the Government.

(13)	Comprises the holdings by Bangko Sentral of gold reserves, foreign investments, foreign exchange and SDRs, including Bangko Sentral’s reserve position in the IMF.

(14)	Annualized.

(15)	Preliminary data as of April 30, 2026.

(16)	Preliminary data as of May 31, 2026.

 

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REPUBLIC OF THE PHILIPPINES

History, Land and People

History

Spain governed the Philippines as a colony from 1521 until 1898. On June 12, 1898, during the Spanish-American War, the Filipinos declared their independence. The United States claimed sovereignty over the Philippines under the 1898 Treaty of Paris, which ended the Spanish-American War, and governed the Philippines as a colony until 1935, when the Philippines became a self-governing commonwealth. On July 4, 1946, the Philippines became an independent republic.

Geography and General Information

The Philippine archipelago, located in Southeast Asia, comprises over 7,000 islands and a total land area of approximately 300,000 square kilometers. The Republic groups the islands into three geographic regions: Luzon in the north, covering an area of 141,395 square kilometers, Visayas in the center, covering an area of 56,606 square kilometers, and Mindanao in the south, covering an area of 101,999 square kilometers. The Republic is also divided into 18 administrative regions.

 

Note: For a discussion of territorial disputes over certain islands in the West Philippine Sea, see “—Government—Territorial Dispute over the West Philippine Sea”.

 

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2020 Census and 2024 Census

The Republic’s population was 109.0 million according to the 2020 Census of Population and Housing (the “2020 Census”), representing an increase of 9.4% or 8.1 million people as compared to the 2015 Census and an increase of 18.1% or 16.7 million people as compared to the 2010 Census. The Republic’s population increased by 1.6% annually, on average, during the period from 2015 to 2020, which was lower than the 1.7% average annual growth rate during the period from 2010 to 2015. Of the Republic’s 18 administrative regions, Region IV-A (Calabarzon) had the largest population in 2020 at 16.2 million, followed by the National Capital Region with 13.5 million and Region III (Central Luzon) with 12.4 million. The combined population of these three regions accounted for approximately 38.6% of the Republic’s population in 2020. The Bangsamoro Autonomous Region of Muslim Mindanao (“BARMM”), formerly known as the Autonomous Region in Muslim Mindanao (the “ARMM”), was the fastest growing region during the period from 2015 to 2020, with an average annual population growth rate of 3.1%. Of the Republic’s 81 provinces, Cavite was the most populous in 2020 at 4.3 million, followed by Bulacan at 3.7 million and Laguna at 3.4 million. In total, 29 provinces had populations in excess of 1.0 million.

The Republic’s population was 112.7 million according to the 2024 Census, representing an increase of 3.4% or 3.7 million people compared to the 2020 Census of Population and Housing and an increase of 11.6% or 11.7 million people compared to the 2015 Census. The Republic’s population increased by 0.8% annually, on average, during the period from 2020 to 2024, which was lower than the 1.6% average annual growth rate during the period from 2015 to 2020. Of the Republic’s 18 administrative regions, Region IV-A (CALABARZON) had the largest population in 2024 at 16.9 million, followed by the National Capital Region with 14.0 million, and Region III (Central Luzon) with 13.0 million. The combined population of these three regions accounted for approximately 39.0% of the Republic’s population in 2024. The BARMM was the fastest growing region during the period from 2020 to 2024, with an average annual population growth rate of 3.4%. Of the Republic’s 82 provinces, Cavite was the most populous in 2024 at 4.6 million, followed by Bulacan at 3.9 million, and Laguna at 3.7 million. In total, 29 provinces had populations in excess of 1.0 million.

The Republic has a relatively young population, with about 40% of the population under the age of 20 and a median age of 25.3, according to the 2020 Census.

The following table shows the population of the Republic, by age group, according to the 2020 Census.

2020 Household Population by Age

 

Age group		Total household population				Percentage of total population in age group
Under 5			11,069,479				10.2	%
5 – 9			11,270,637				10.3	%
10 – 14			11,091,362				10.2	%
15 – 19			10,482,815				9.6	%
20 – 24			10,024,753				9.2	%
25 – 29			9,229,288				8.5	%
30 – 34			8,171,423				7.5	%
35 – 39			7,221,785				6.6	%
40 – 44			6,528,846				6.0	%
45 – 49			5,598,765				5.1	%
50 – 54			4,964,629				4.6	%
55 – 59			4,137,342				3.8	%
60 – 64			3,375,290				3.1	%
65 – 69			2,398,116				2.2	%

 

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Age group		Total household population				Percentage of total population in age group
70 – 74			1,578,185				1.4	%
75 – 79			932,231				0.9	%
80 and over			958,299				0.9	%
Total			108,667,043				100.0	%
Median Age			25.3

Source: Philippine Statistics Authority, 2020 Census.

The majority of Filipinos have Malay ethnic origins. Filipino culture also includes strong Spanish, Chinese, and American influences.

Filipino is the national language, but English is the primary language used in business, government and education. The population speaks over 80 other dialects and languages, including Chinese and Spanish. As of 2019, the Republic’s functional literacy rate was 91.6%.

Christianity, primarily Roman Catholicism, is the predominant religion in the Philippines. A significant Muslim minority lives in Mindanao.

Government

Governmental Structure

Since 1935, the Republic has had three constitutions. The country adopted the current Constitution by plebiscite in February 1987 after Ferdinand E. Marcos, who had ruled for 20 years, was ousted a year earlier in favor of Corazon Aquino (who opposed Marcos in the 1986 presidential election) following a people’s uprising. The Constitution restored a presidential form of government composed of three branches: executive, legislative, and judicial.

The principal features of each branch are as follows:

 

•

Executive—The President, elected by popular vote for a single, six-year term, exercises executive power. If the President dies, becomes permanently disabled, is removed from office, or resigns, the Vice President acts as President for the remainder of the term. If the Vice President cannot serve, the President of the Senate or, if he or she cannot serve, the Speaker of the House of Representatives acts as President until the election and qualification of a new President or Vice President. The person acting as President for any remaining term may, if elected, serve a six-year term as President. President Ferdinand “Bongbong” R. Marcos Jr. commenced serving his six-year term on July 1, 2022, and his term will end on June 30, 2028.

 

•

Legislative—The Congress, comprising the Senate and the House of Representatives, exercises the Republic’s legislative authority. The Constitution mandates a Senate of 24 members and a House of Representatives of not more than 250 members (excluding sectoral representatives), all elected by popular vote. Senators serve for a term of six years and members of the House of Representatives for a term of three years. Senate and House of Representatives seats are subject to two consecutive term and three consecutive term limits, respectively.

 

•

Judicial—The Supreme Court and any lower courts established by law exercise the Republic’s judicial authority. The Republic’s court system is a multi-tiered system of courts of general jurisdiction that includes the Supreme Court and the Court of Appeals. Below these are the Regional Trial Courts, Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts, which are all courts of original jurisdiction.

 

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Elections

On May 9, 2022, national and local elections were held throughout the Philippines, including the election of the president and vice president of the Republic, and elections for 12 senators and all members of the House of Representatives. President Ferdinand “Bongbong” R. Marcos, Jr. of the Partido Federal ng Pilipinas and Vice President Sara Z. Duterte of Lakas-CMD were elected and took office on July 1, 2022, marking the end of former President Rodrigo R. Duterte’s six-year term.

In October 2023, the Republic held the local Barangay and Sangguniang Kabataan Elections.

In May 2025, elections were held for 12 Senators and all members of the House of Representatives, who, together with the 12 Senators who did not face re-election, constitute the 20th Congress of the Republic.

Corruption Investigations and Other Proceedings

In the last few years, a number of current and past officials of the Government have been investigated or indicted for graft, corruption, plunder, extortion, bribery, or usurpation of authority. For example, there have been three impeachment complaints filed against the current vice president, impeachment proceedings against two then presidents, as well as one then chief justice of the Supreme Court.

Political Violence

Political violence is not uncommon in the Republic. As of September 2019, more than 20 mayors and vice-mayors in the Philippines have been killed, some of these officials were alleged to have been involved in the illegal drug trade. In December 2019, a special court convicted eight members of the Ampatuan family, members of which governed the southern province of Maguindanao for decades, along with 20 other defendants on multiple counts of murder for their roles in a 2009 ambush on an election motorcade, which killed 57 people, including political opponents of the Ampatuan family and 30 journalists. As of June 2023, at least 38 deaths were recorded in cases involving violence and killings directed towards local government officials.

Impeachment of the Vice President

On February 5, 2025, the House of Representatives impeached Vice President Sara Z. Duterte on charges of misuse of public funds, unexplained wealth, and threats against the President; however, the Supreme Court unanimously declared those proceedings unconstitutional on July 25, 2025, barring refiling until February 6, 2026. Following the filing of new complaints in February 2026, 257 members of the House of Representatives voted on May 11, 2026 to impeach the Vice President a second time on substantially similar charges. The Senate formally convened as an impeachment court on May 18, 2026, and the Senate trial on the merits is expected to commence on or about July 6, 2026.

Efforts Against the Illegal Drug Trade

Former President Duterte made fighting the illegal drug trade a central focus of his administration. Since July 1, 2016, the Philippine National Police (“PNP”) arrested more than 345,000 individuals allegedly involved in illegal drugs, including more than 15,000 high-value targets over the course of more than 239,000 drug operations. Representatives of certain international organizations and foreign nations, including the Office of the High Commissioner for Human Rights of the United Nations and the United States, have expressed concern over reports of extrajudicial killings in the Republic in connection with these operations. In December 2019, lawmakers in the United States proposed legislation that would impose travel restrictions and financial sanctions on officials found to be involved in extrajudicial killings and the imprisonment of former Philippine Senator De Lima, a prominent critic of the Duterte administration’s operations against illegal drugs. In September 2021, the International Criminal Court (“ICC”) opened an investigation of whether or not the crime against humanity of

 

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murder was committed between November 1, 2011 and March 16, 2019 in the context of the “war on drugs”. On March 11, 2025, former President Duterte was arrested and placed in government custody following an arrest warrant issued by the ICC for crimes against humanity. On March 12, 2025, he was transferred to the custody of the ICC. On March 14, 2025, former President Duterte appeared in the first hearing via video link, as authorized by the Chamber. The confirmation of charges hearing took place from February 23, 2026 to February 27, 2026. On April 23, 2026, Pre-Trial Chamber I unanimously confirmed all the charges comprised of three counts of crimes against humanity brought by the Prosecutor against former President Duterte and committed him to trial before a Trial Chamber. On November 6, 2025, the ICC issued a secret arrest warrant against Philippine Senator Ronald “Bato” dela Rosa, the former Davao City Police Director and later Chief of the Philippine National Police, for the crime against humanity of murder committed in connection with the “war on drugs.” The warrant was unsealed and then publicly confirmed by the ICC on May 11, 2026. On May 20, 2026, the Supreme Court rejected Dela Rosa’s petition to block enforcement of the warrant, and relevant government officials have since stated that he will be arrested.

In November 2022, the Government launched its anti-drug campaign, Buhay Ingatan, Droga’y Ayawan or BIDA program, that aims to focus on prevention, demand reduction and rehabilitation in communities. The Marcos administration intends to continue efforts against illegal drugs.

Administrative Organization

As of December 31, 2025, the Republic had 18 administrative regions and 43,734 local government units (“LGUs”). LGUs included 82 provinces, 149 cities, 1,493 municipalities (subdivisions of provinces), and 42,010 barangays. Highly urbanized cities function independently of any province, while other cities are subject to the administrative supervision of the provinces in which they are located.

The Government is organized primarily around the various departments and department-equivalent agencies of the executive branch, which implement the various programs and projects of the Government. The departments and department-equivalent agencies are grouped into the following five sectors.

 

Sector		Major Department
Social services		Health; Education, Culture and Sports; Labor and Employment; Social Welfare and Development; Migrant Workers
Economic services		Agriculture; Agrarian Reform; Energy; Environment and Natural Resources; Tourism; Trade and Industry; Public Works and Highways; Transportation and Communications; Science and Technology
Defense		National Defense
General public services		Foreign Affairs; Finance; Budget and Management; Interior and Local Government; Justice; National Economic and Development Authority; Office of the Press Secretary; BARMM; Cordillera Administrative Region
Constitutional offices		General Public Services (Elections, Audit, Civil Service, Public Order and Safety, Office of the Ombudsman); Social Services (Human Rights)

Devolution of Certain Executive Branch Functions

On June 1, 2021, then President Duterte signed Executive Order No. 138, which directs the full devolution of certain national government functions to local government units. National government functions expected to

 

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be devolved to local governments include, among others, those related to local infrastructure, health care, livelihood, agriculture, and social welfare. Under Executive Order No. 138, national government agencies would instead assume more strategic and steering functions going forward to address persistent development issues.

The Government is currently studying issues pertaining to the operationalization of the devolution to local governments and decentralization of functions of the national government so as to provide clearer parameters on the functions, services, and facilities that are to be devolved.

Government Corporations

The Government owns or controls a number of corporations that provide essential goods and services to the public and work with the private sector to encourage economic growth and development. Originally restricted to basic public services and national monopolies, the number of government-owned and controlled corporations (“GOCCs”) grew from 13 in the 1930s to 301 by 1984. GOCCs are fiscally significant as major contributors to government revenue or as recipients of direct and indirect support from government revenue. At the height of the COVID-19 pandemic in 2020, GOCCs contributed over ₱100.0 billion through dividend remittances to the Government, which was used to fund social and health related expenditures, as well as to provide financial relief for industries severely impacted by the COVID-19 pandemic.

As of December 31, 2025, there were 112 GOCCs, including government financial institutions (“GFIs”), which currently account for a significant proportion of the public sector’s domestic and external debt. The Government closely monitors the contribution to the Consolidated Public Sector Fiscal Position (“CPSFP”) and other financial indicators of two GFIs that provide credit to enterprises in support of public policies: Land Bank of the Philippines (“LBP”) and Development Bank of the Philippines (“DBP”). As of December 31, 2025, DBP and LBP had an aggregate domestic and external debt of around ₱115.68 billion, which represented 27.97% of the debt owed by 24 major GOCCs, which form part of the CPSFP.

The Government has implemented a general policy to improve the corporate governance and financial performance of GOCCs by encouraging adequate contribution by these GOCCs to the Government’s fiscal consolidation efforts, integrity, efficient and effective delivery of public services, sustainability, transparency, and accountability. Further to its privatization strategies, the Government has also sought decreased intervention in the business affairs of other GOCCs in view of its policy objective for GOCCs to be self-sustaining; however, in certain instances, the Government supports the transactions of such corporations by acting as guarantor for obligations and providing such other assistance as it deems necessary and as may be allowable under law. Since 2011, several GOCCs have either been privatized or abolished by the Government, or have been classified as inactive, non-operational, or otherwise disposed of by the Government.

Marcos Administration Policy

In his fourth State of the Nation Address on July 28, 2025, President Marcos presented a candid assessment of the country’s challenges while outlining his administration’s priorities for the remainder of his term. The address focused on food security, social services, infrastructure, education, healthcare, energy, and government accountability.

On agriculture and food security, President Marcos emphasized the administration’s efforts to increase agricultural production and strengthen support for farmers and fisherfolk. He highlighted initiatives aimed at improving food affordability, including the nationwide rollout of subsidized rice through KADIWA centers and the continued implementation of programs to enhance food security and agricultural productivity.

The President also underscored the importance of improving access to basic services, particularly water and electricity. He discussed ongoing efforts to expand energy access, improve public utilities, and ensure that essential services reach underserved communities.

 

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Infrastructure remained a key pillar of the administration’s development agenda. President Marcos reported progress in transport, digital, and energy infrastructure projects while stressing the need for quality and accountability in public works. He notably ordered a review of flood control projects and vowed to hold accountable officials and contractors involved in substandard or anomalous infrastructure projects. The administration likewise reaffirmed its commitment to enhancing regional connectivity and supporting economic development through continued infrastructure investments.

In the education sector, President Marcos acknowledged persistent learning gaps among Filipino students, particularly in reading, mathematics, and science. He pledged reforms to address the country’s learning crisis, improve educational outcomes, expand digital connectivity, and provide internet access to public schools. The President reiterated that education remains among the administration’s highest priorities.

On health and social welfare, the President highlighted ongoing efforts to improve healthcare delivery and access to essential services. He emphasized the need for government programs to respond more efficiently to the needs of Filipino families, particularly in the areas of healthcare, nutrition, and poverty alleviation.

Regarding employment and economic development, President Marcos reiterated the administration’s commitment to creating jobs, supporting small enterprises, attracting investments, and sustaining economic growth. He emphasized that economic gains must translate into tangible improvements in the lives of ordinary Filipinos through affordable food, quality employment, and accessible public services.

President Marcos concluded by reaffirming his commitment to deliver concrete results during the remaining years of his administration, emphasizing efficient governance, accountability, and the need to address the everyday concerns of Filipino families while sustaining the country’s long-term development and resilience.

Philippine Development Plan and Barangay Development Plan

The Philippine Development Plan for 2023 to 2028 was approved by the National Economic and Development Agency (“NEDA”) Board, which is headed by the President, on December 16, 2022, following a series of Cabinet-level and technical inter-agency discussions and stakeholder consultation. The updated Philippine Development Plan 2023-2028 fleshes out the 8-point socioeconomic agenda of the Marcos administration that seeks to address the Republic’s short-term issues and medium-term constraints to growth and inclusion. It provides a comprehensive roadmap containing actionable policies and programs, and legislative priorities that will enable the Republic to reach its desired development outcome of economic and social transformation.

Under the Marcos administration, the Barangay Development Program (“BDP”) has also been established to prevent the resurgence of communist insurgency groups in geographically isolated communities by addressing underlying factors to the conflict such as poverty. Communities which receive the BDP are classified as those who were former strongholds or under the influence of CPP-NPA-NDF fronts and are now ripe for development intervention. The BDP pursues this aim through the implementation of socio-economic development projects designed to encourage development and social inclusivity such as the construction of farm-to-market roads, school buildings, water and sanitation systems, health stations, and livelihood programs. In 2023, approximately 1,254 eligible projects were identified for planned implementation under the BDP.

Credit Ratings

In April 2026, Moody’s Investors Service (“Moody’s”) affirmed the Republic’s “Baa2” credit rating with a stable outlook, while noting rising risks to the economy from the Middle East conflict. Moody’s raised its inflation forecasts and lowered its growth outlook, now expecting real GDP growth of 4.9% in 2026 (down from 5.5%), citing elevated energy and import costs that are expected to squeeze household incomes, dampen consumption, and weigh on industrial activity, compounded by the earlier slowdown stemming from a domestic corruption scandal involving flood-control projects.

 

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In April 2026, Fitch Ratings revised its outlook on the Republic to negative from stable while affirming the Republic’s “BBB” rating, citing rising risks to the Philippines’ strong medium-term growth prospects from recent disruptions to public investment, exacerbated in the near term by the country’s elevated exposure to the ongoing global energy shock. Fitch noted that these challenges could narrow the Republic’s GDP growth outperformance relative to peers amid higher post-pandemic government debt and a gradual deterioration in its external finance position, and projects GDP growth of 4.6% in 2026 as public spending recovers only gradually and higher energy costs weigh on household consumption.

In April 2026, S&P Global Ratings (“S&P”) revised its outlook on the Republic from positive to stable and affirmed the Republic’s “BBB+” long-term and “A-2” short-term sovereign credit ratings, citing increased risks to the trajectory of the country’s external and fiscal metrics arising from the war in the Middle East. S&P noted that elevated energy prices would widen the Republic’s current account deficit and reduce buffers in its net external asset position, and that it is unlikely external and fiscal support will improve sufficiently over the next two to three years to meaningfully augment support for the sovereign ratings.

Internal Conflict with Rebel Groups and Peace Negotiations

For more than four decades, the Philippines has faced internal armed conflicts involving both ideologically driven insurgents and separatist movements. The Communist Party of the Philippines–New People’s Army–National Democratic Front (“CPP-NPA-NDF”) has waged a protracted armed struggle rooted in Marxist-Leninist ideology, while the Moro National Liberation Front (“MNLF”) and its splinter group, the Moro Islamic Liberation Front (“MILF”), have historically sought autonomy for Muslim-majority areas in Mindanao. Other extremist factions, such as the Abu Sayyaf Group and Islamic State of Iraq and Syria (“ISIS”)-linked cells, have engaged in terrorism, kidnappings, and bombings, particularly in southern provinces.

The government’s security framework continues to be anchored on Oplan Kapayapaan, launched in 2017, which combines counterterrorism operations with community support. The Anti-Terrorism Act of 2020, upheld by the Supreme Court in 2021 with limited modifications, remains in force, empowering the Anti-Terrorism Council to designate individuals and organizations as terrorists. Alongside these measures, the government has expanded reintegration programs through the Enhanced Comprehensive Local Integration Program (E-CLIP), offering livelihood, housing, and psychosocial support to former rebels.

Recent years have seen significant progress in the peace process. The MILF, now the dominant Muslim separatist group, continues to implement the Comprehensive Agreement on the Bangsamoro. The transition of the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) is ongoing, with the first regular BARMM elections rescheduled to September 2026, ensuring stability during the transition. The government has emphasized unity among BARMM local government units (“LGUs”), urging collaboration to end internal conflict and consolidate peace gains.

Meanwhile, the MNLF remains engaged in dialogue and reintegration initiatives, while the CPP-NPA-NDF has seen a significant demobilization effort. As of early 2026, more than 13,600 members of the CPP-NPA-NDF and its affiliated organizations have applied for amnesty, marking the largest reintegration effort to date. Other groups, such as the Revolutionary Proletarian Army–Alex Boncayao Brigade (RPA-ABB/Kapatiran), have also participated, with hundreds of members transitioning into community-based peace partners. In total, over 16,000 former rebels and ex-combatants have formally applied for amnesty, signaling broad trust in the government’s peace agenda.

The reintegration of former combatants is now linked to broader nation-building efforts. Accredited FR-led People’s Organizations (POs) are being connected to government development programs, while ex-combatants are increasingly involved in disaster preparedness and climate resilience initiatives. These measures reflect a whole-of-nation approach, ensuring that peacebuilding is sustained through socio-economic development and inclusive governance.

 

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On the Moro Islamic Liberation Front (MILF)

The peace process between the Government of the Philippines and the MILF has reached a critical juncture in 2026, with major political milestones achieved but normalization efforts still facing delays. The Bangsamoro Organic Law, ratified in 2019, established the Bangsamoro Autonomous Region in Muslim Mindanao (“BARMM”), replacing the Autonomous Region in Muslim Mindanao. Territorial adjustments have since been made, including the exclusion of Sulu in 2024 following a Supreme Court ruling, which transferred the province to Region IX in 2025. The Bangsamoro Transition Authority continues to serve as the interim government, currently led by Interim Chief Minister Abdulraof Macacua since March 2025. The Bangsamoro Transition Authority has enacted six priority legislations, though the Bangsamoro Revenue Code remains pending. The first Bangsamoro Parliamentary Elections are scheduled for September 14, 2026, under Republic Act No. 12317, marking the end of the transition period and the culmination of the political track of the Comprehensive Agreement on the Bangsamoro.

On the normalization track, progress has been uneven. Out of an estimated 40,000 MILF combatants, 26,145 have been decommissioned along with 4,625 firearms across Phases 1 to 3, with Phase 4 still pending. Integration into the Philippine National Police (“PNP”) has advanced, with over 7,145 MILF and MNLF members passing the National Police Commission Special Qualifying Eligibility exam, and 392 completing PNP training by 2025. Recruitment has been extended until June 2027 to accommodate more applicants. Efforts to dismantle private armed groups have also been ongoing, with 15 private armed groups and 37 potential private armed groups neutralized by 2023. Meanwhile, the Small Arms and Light Weapons Program had enrolled 9,588 firearms as of April 2026, with livelihood assistance provided to those who surrendered weapons.

Socioeconomic reintegration remains a challenge. The Task Force for Decommissioned Combatants and their Communities continues to provide transitional cash assistance and livelihood support, but the Third-Party Monitoring Team has noted delays compared to the political track. Camps transformation programs under the Camps Transformation Investment Program 2023–2028 are ongoing, focusing on 36 priority barangays across six (6) acknowledged MILF camps, though implementation has been slower than expected.

Recent developments highlight the urgency of accelerating normalization. In April 2026, newly appointed Office of the Presidential Adviser on Peace, Reconciliation and Unity (“OPAPRU”) Secretary Mel Senen Sarmiento met with MILF leaders to reaffirm the government’s commitment to fast-track normalization and sustain peace dividends. The Third-Party Monitoring Team’s 9th report, released in May 2026, emphasized that while political reforms are advancing, normalization, particularly socioeconomic development and transitional justice, remains behind schedule. The upcoming September 2026 elections are expected to be a decisive milestone, providing democratic legitimacy to the Bangsamoro Parliament and formally ending the transition period of the BARMM.

On the Moro National Liberation Front (MNLF)

The Government continues to pursue transformation with the MNLF in parallel with the normalization process with the MILF under the Comprehensive Agreement on the Bangsamoro. Anchored on the 1996 Final Peace Agreement (“FPA”), the MNLF process is guided by two complementary tracks: the Political Track and the Transformation Track. The Political Track focuses on completing the remaining commitments under the FPA, particularly the establishment of the Bangsamoro Development Assistance Fund and the Tripartite Implementation Monitoring Committee. These mechanisms are expected to be fully operationalized by 2028, with the Organization of Islamic Cooperation playing a vital role as a third-party facilitator. Meanwhile, the Transformation Track, launched in 2023, aims to support the transition of MNLF combatants into peaceful and productive civilian life, complementing the MILF Normalization Program and contributing to long-term stability in the Bangsamoro.

Since 2023, the Government has engaged both the Misuari and Sema/Jikiri factions of the MNLF through separate committees and convergence platforms. Peace Implementing Committee for Misuari Group and

 

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Management Committee for Sema Group. These engagements have resulted in consensus to anchor the Transformation Program on Article 20a of the 1996 FPA, which provides for the integration of MNLF members into the Armed Forces of the Philippines (“AFP”), the PNP, and other government agencies, alongside socio-economic, cultural, and educational programs for those not absorbed. Political milestones have also been achieved, including the appointment of ten MNLF members to the BTA in March 2024, equally representing the Misuari and Sema groups. MNLF leaders have likewise assumed significant roles in the Bangsamoro Parliament and ministries, such as Deputy Speakers Omar Yasser Sema, Hatimil Hassan, and Abdulkarim Misuari, and Ministerial posts held by Muslimin Sema and Abu Amri Taddik. These developments underscore the growing political participation of the MNLF in the governance of the BARMM.

The Transformation Program/Track comprises four components: Peace and Security; Socio-Economic Development for Individuals, Families, and Communities; Confidence-Building Measures; and Community Healing and Reconciliation. These components recorded notable accomplishments between FY 2023 and 2025. Under the Peace and Security component, 2,442 combatants were verified, and 2,533 firearms were documented. Meanwhile, the Socio-Economic component provided 2,442 combatants with transitory cash assistance worth PhP. 45,000 each. Additionally, 1,947 individuals benefited from cash-for-work programs, 1,141 secured civil registration papers, and 686 students accessed educational assistance. All verified combatants were enrolled in PhilHealth and received E-Konsulta interventions. At the community level, 139 projects addressing infrastructure, livelihood, and social protection needs were implemented across 63 communities.

The Community Healing and Reconciliation component trained 45 women mediators in mediation and conflict resolution skills across MNLF priority communities. Furthermore, women-focused initiatives—such as the pathway formulation sessions of the Bangsamoro Sagip Kabuhayan Program—represent a transformative shift in the peace process. Moving beyond simple cash transfers, these initiatives focus on creating a sustainable micro- entrepreneurial class among 96 MNLF women, with plans to support 3,000 more through seed capital, capacity building, and mediation training. Finally, Confidence-Building Measures have also advanced: as of March 2026, the Amnesty Program has assisted 646 MNLF applicants, and solidarity activities for Eid’l Fitr and Eid’l Adha benefited 5,000 individuals across 15 MNLF communities between 2023 and 2025.

Structured into three (3) phases—Phase I: Settling-In and Transition, Phase II: Transforming, and Phase III: Stabilizing. The TP ensures a gradual and sustainable reintegration of MNLF combatants into civilian life. These accomplishments highlight the Government’s commitment to completing the 1996 FPA and ensuring that MNLF combatants and communities are fully integrated into peaceful, resilient, and economically developed societies. Together, these efforts reinforce the broader peace process in Mindanao and contribute to the long-term stability of the Bangsamoro region.

On the Abu Sayyaf Group

As of 2026, Abu Sayyaf has been largely weakened through sustained military and law enforcement operations, with most of its remaining members either killed, arrested, or having surrendered. The group is no longer considered an active peace table under OPAPRU, as its activities are treated strictly as a counterterrorism and security matter rather than a negotiation track.

Abu Sayyaf, designated as a foreign terrorist organization by the United States and the European Union in 2002, has long been associated with kidnappings, bombings, and violent attacks in Mindanao. For years, the AFP, with support from international partners such as the U.S. conducted joint military exercises and counterterrorism operations to weaken the group.

Throughout the 2010s and early 2020s, Abu Sayyaf continued to carry out violent incidents, including the 2019 Jolo Cathedral bombing that killed 23 people and the 2020 twin suicide bombings in Jolo that left 14 dead and 75 injured. These attacks underscored the group’s affiliation with ISIS and its role as a local extremist proxy.

 

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By 2021–2023, intensified AFP and PNP operations led to the neutralization of key leaders such as Majan Sahidjuan in Tawi-Tawi and the rescue of foreign hostages. Sustained campaigns also resulted in the arrest and surrender of dozens of members, alongside the seizure of firearms and explosives.

A major legal milestone was reached in October 2024, when the Taguig City Regional Trial Court convicted 17 Abu Sayyaf members for 21 counts of kidnapping and serious illegal detention with ransom related to the 2000 Sipadan Island abductions. Each was sentenced to life imprisonment for every count, marking one of the strongest judicial actions against the group. Later that year, in December 2024, the last four Abu Sayyaf members in Basilan, along with four followers, surrendered to the military, signaling the near-total dismantling of the group’s operational presence in the province.

Marawi Siege

As of May 2026, the Marawi Siege remains a defining conflict in Mindanao’s history, with rehabilitation efforts still ongoing. While PhP. 3.85 billion in compensation has been released to over 2,280 claimants and 392 permanent housing units were recently awarded, civil society groups warn that thousands of internally displaced persons continue to face unresolved land disputes, livelihood challenges, and delayed payouts.

The Marawi Siege began on May 23, 2017, when government forces attempted to capture Abu Sayyaf leader Isnilon Hapilon, who was then recognized as ISIS’ commander in Southeast Asia. Reinforced by the Maute Group, militants launched a violent takeover of Marawi City, leading to over 1,200 deaths and the displacement of more than 350,000 residents. The siege lasted nearly six (6) months, marked by urban warfare, hostage-taking, and widespread destruction. In response, then President Rodrigo Duterte declared martial law across Mindanao, which remained in effect until December 2019. The state of emergency was formally lifted only in July 2023 through Proclamation No. 298, ending six (6) years of heightened military rule in the region.

Rehabilitation efforts were spearheaded by Task Force Bangon Marawi, focusing on transitory shelters, infrastructure rebuilding, and livelihood support. A landmark development was the passage of the Marawi Siege Victims Compensation Act of 2022, which created the Marawi Compensation Board to provide reparations for lost residential and commercial properties. Since beginning operations in July 2023, the Marawi Compensation Board has processed thousands of claims. By early 2026, it had disbursed PhP. 3.85 billion to 2,280 beneficiaries, though civil society groups continue to highlight delays, strict documentation requirements, and insufficient funding as major obstacles for internally displaced persons.

On the housing front, the National Housing Authority turned over 392 permanent housing units in Barangays Kilala and Mipantao-Gadongan during the Marawi Week of Peace in May 2026, under the Pamayandeg Ranaw Residences project. This milestone was celebrated as a step toward sustainable resettlement nearly a decade after the siege.

Infrastructure rehabilitation remains a challenge. President Ferdinand Marcos Jr. has ordered the acceleration of the Reconstruction and Development Plan for a Greater Marawi Stage 2, which covers 26.59 kilometers of roads, bridges, drainage systems, and slope protection works5. As of January 2026, progress stood at only 19.61 percent, with completion now projected for March 2028. Completed projects include the Marawi City General Hospital, Port of Marawi, Dansalan Integrated School, Central Fire Station, and Grand Padian Market, while ongoing works cover bulk water supply and additional road networks.

Despite these gains, tens of thousands of internally displaced persons remain in precarious conditions, facing unresolved land disputes, livelihood challenges, and trauma recovery needs. Civil society organizations (CSOs) emphasize that rehabilitation must go beyond physical reconstruction to address transitional justice and survivor-centered recovery, warning that without these, the promise of rebuilding Marawi risks being incomplete.

 

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Communist Party of the Philippines-New People’s Army-National Democratic Front (CPP-NPA-NDF)

The communist insurgency in the Philippines, led by the CPP-NPA-NDF, remains one of the longest-running conflicts in Asia. After decades of intermittent negotiations and localized peace efforts, the Marcos administration has revived national-level peace talks while simultaneously strengthening reintegration programs for former rebels.

In November 2023, exploratory talks between the Government and the National Democratic Front of the Philippines resumed in Oslo, Norway, facilitated by the Royal Norwegian Government. Both parties signed a joint statement expressing their commitment to address the roots of armed conflict and pursue transformation of the CPP-NPA-NDF. However, the government rejected preconditions such as ceasefires, prisoner releases, and the dismantling of the National Task Force to End Local Communist Armed Conflict (“NTF-ELCAC”), signaling its intent to negotiate while maintaining military pressure. By late 2024, Presidential Adviser Carlito Galvez Jr. noted that a comprehensive peace agreement could be finalized after the May 2025 midterm elections, with the administration aiming to complete and implement such an agreement within its term.

Parallel to national talks, localized peacebuilding continues under Executive Order No. 70, which institutionalized the “Whole-of-Nation Approach” through the NTF-ELCAC. The Localized Peace Engagement framework and the Transformation Program/Track have been cascaded to 42 provinces through participatory planning workshops. These workshops identified persistent issues such as arson, extortion, agrarian disputes, landlessness, and limited access to education, health, and livelihood services. To institutionalize reintegration, provincial Peace and Development Centers have been established, including Kagawasan 143 in Agusan del Norte and Dangpanan in Surigao del Norte, serving as hubs for reconciliation, livelihood support, and community development.

Complementing these efforts, President Marcos issued presidential proclamations in November 2023 granting amnesty to qualified former members of the CPP-NPA-NDF and affiliated groups. This legal reintegration pathway, combined with localized development programs, aims to transform rebel communities and promote sustainable peace. The OPAPRU has expanded assistance programs, including scholarships for “Peace Scholars” and livelihood support for rebel returnees.

Overall, the government’s dual-track strategy, reviving national peace talks while reinforcing localized reintegration programs, reflects a pragmatic approach to ending the insurgency. Sustained military operations continue to weaken the NPA’s armed capacity, while inclusive development and reconciliation initiatives seek to address the socioeconomic grievances that fuel rebellion. The success of this approach will depend on whether national negotiations can overcome decades of mistrust and whether localized programs can deliver lasting improvements in governance, livelihood, and community resilience.

International Relations

The Philippines places a high priority on expanding global trade through a multilateral framework of principles and rules that respect individual countries’ policy objectives and levels of economic development. The Republic’s participation in various international organizations, such as the World Trade Organization, the International Monetary Fund (“IMF”), the World Bank (“WB”) and the ADB, allows it to encourage liberalized trade and investment and to discuss global issues that affect the Republic’s economy.

The following table shows the Republic’s capital participation in, and loans obtained from, major international financial organizations.

 

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Membership in International Financial Organization

 

Membership in International Financial Organization
Name of Organization		Date of Admission				Subscribed				Capital Share				Capital Paid In				Loans Outstanding
		(in millions, except for percentages or otherwise stated)
International Monetary Fund			December 27, 1945				SDR2,042.9				0.43	%		$	1,525.00				—
International Bank for Reconstruction and Development			December 27, 1945				1,188.7	(1)			0.43	%(1)		$	102.1	(1)		$	19,612	(2)
Asian Development Bank (“ADB”)(3)			December 22, 1966			$	3.47 billion				2.38	%		$	173.4			$	15.1 billion
Asian Infrastructure Investment Bank (“AIIB”)			December 28, 2016			$	979.1				1.01	%		$	195.8			$	3,001.4	(4)

Sources: The IMF; the WB; the ADB; the AIIB; Bureau of the Treasury.

Notes:

 

(1)	As of April 16, 2026.

(2)	As of June 30, 2025.

(3)	As of December 31, 2025.

(4)	As of January 20, 2025.

The Philippines also promotes its economic interests through membership in the following regional organizations:

 

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The Association of Southeast Asian Nations (“ASEAN”);

 

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ASEAN Free Trade Area;

 

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Southeast Asia, New Zealand and Australia Central Banks;

 

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Southeast Asian Central Banks;

 

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Asia-Pacific Economic Cooperation; and

 

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Executives Meeting of East Asia and Pacific Central Banks.

Relationship with the IMF

Previously, the IMF maintained relations with the Republic within the context of a regular IMF program monitoring arrangement and a subsequent post-program monitoring arrangement. Under its regular program monitoring arrangement, the IMF was allowed to influence the Republic’s fiscal policies through stabilization and structural adjustment programs. In contrast, the post-program monitoring arrangement involved program assessments based on a regular review of economic developments and policies rather than the attainment of specific quantitative targets and did not include a financing component.

On October 1, 2025, the IMF team concluded the 2025 Article IV Mission (the “2025 Mission”) to the Philippines. The IMF team recognized that the Philippine economy has achieved successful disinflation and that growth has been resilient despite external headwinds, supported by strong public consumption and investment. The 2025 Mission expected growth to slow to 5.1% in 2025 as increasing global tariffs weigh on exports and investment, before picking up moderately to 5.6% in 2026, a downward revision relative to previous forecasts. The IMF team noted that downside risks to the outlook stem from prolonged global trade policy uncertainty and rising trade barriers, geopolitical tensions, disruptive financial market corrections, and more frequent and intense climate shocks on the domestic front.

 

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The IMF team observed that inflation declined amid a restrictive monetary policy stance and concerted government efforts to reduce food prices, with headline inflation averaging 1.7% in 2025 as of October, and was projected to pick up to 2.8% in 2026 as negative base effects recede. The 2025 Mission noted that the monetary policy stance should remain accommodative amid elevated downside risks to growth and well-anchored inflation expectations, and that the exchange rate should continue to play its role as a shock absorber. The 2025 Mission emphasized that gradual fiscal consolidation over the medium term will help reinforce fiscal space and should be supported by concrete and durable tax revenue mobilization and expenditure reforms to limit the need for restraint in priority spending, with efforts to enhance public financial management and raise spending efficiency remaining critical.

The 2025 Mission further noted that while overall systemic financial risks remain moderate, close monitoring is warranted of vulnerabilities in the real estate sector, interconnectedness between banks and complex conglomerate structures, and fast-growing consumer credit including through non-bank financial institutions and digital finance. The IMF team advised the authorities to enhance the macroprudential policy framework to help preempt the build-up of vulnerabilities and raise buffers. The IMF team also welcomed the Philippines’ successful exit from the Financial Action Task Force grey list while noting that advancing Anti-Money Laundering/Combating the Financing of Terrorism (“AML/CFT”) efforts should remain a priority.

The IMF team supported accelerating structural and governance reforms to boost investor confidence, raise fiscal multipliers and potential growth, and recommended reducing infrastructure and energy gaps, promoting foreign direct investment and productivity, strengthening governance and the rule of law, reducing corruption vulnerabilities, and enhancing human capital and workforce skills. The 2025 Mission highlighted the importance of greater trade integration, including through negotiating deep trade agreements and reducing non-tariff barriers, to enhance global value chain integration and resilience in an increasingly challenging external environment.

On November 24, 2025, the Executive Board of the IMF concluded the 2025 Article IV consultation with the Republic, whereby the IMF’s executive directors endorsed the IMF team’s appraisal on the Republic from the 2025 Article IV Mission.

World Bank Financing and Projects

In 2025, the World Bank approved the financing of the following projects in the Philippines: (i) USD454.9 million loan for the Mindanao Transport Connectivity Improvement Project, which aims to improve transport services to the Cagayan de Oro-Davao-General Santos corridor (main corridor) and its catchment area; (ii) USD495.60 million loan for the Philippines Health System Resilience Project, which will provide improved utilization and quality of health services, and enhance health emergency prevention, preparedness and response in the project provinces; (iii) USD700 million loan for the Philippines Community Resilience Project – Pagkilos, which aims to strengthen community capacities for participatory resilience planning and increase access to resilient investments in vulnerable areas; (iv) USD67.34 million loan for the Philippines Civil Service Modernization Project, which aims to modernize the human resource management functions of the government by improving the efficiency and quality of HRM and payroll management in selected National Government Agencies in the Philippine civil service; and (v) USD800 million loan for the Philippines First Energy Transition and Climate Resilience Development Policy Loan which aims to (i) scale up the adoption of clean energy technologies; (ii) increase the security, flexibility and competition of electricity markets; and (iii) improve water management across water uses.

Asian Development Bank Financing and Projects

In 2025, the ADB approved: (i) $500 million loan for the Second Disaster Resilience Improvement Program aimed at supporting the government in strengthening its policies and institutional frameworks on disaster risk reduction and management to help the Philippines adopt an anticipatory approach to disaster response and achieve long-term resilience by addressing underlying sources of risks in its systems; (ii) $500 million loan for

 

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the Business and Employment Recovery Program—Subprogram 2 aimed at supporting the government in building a business environment that fosters sustainable, high-quality jobs, particularly in the aftermath of COVID-19 and focused on bridging the gap between skills training and employment, (iii) $400 million loan for the Insurance Reform Program, Subprogram 1 aimed at supporting comprehensive reforms to develop a stable and efficient insurance sector, with the expected outcome of enhancing the efficiency of the insurance sector and strengthening disaster resiliency; (iv) $400 million loan for the Business Environment Strengthening with Technology Program, Subprogram 1 aimed at fostering a more enabling environment to allow job-generating businesses and industries to grow; (v) $500 million for the Marine Ecosystems for Blue Economy Development Program, Subprogram 1 aimed at improving the management of fisheries, coastal resources, and aquaculture, enhancing solid waste management and circularity, and increasing planning, budgeting, and investment in nature, ecosystems, and blue carbon; (vi) $400 million loan for the Reducing Food Insecurity and Undernutrition with Electronic Vouchers Project aimed at increasing access of poor and vulnerable people, particularly women and children, to affordable and nutritious food; and (vii) $1,450 million loan for the Malolos Clark Railway Project, Tranche 2 which forms part of the North South Commuter Railway Project.

Territorial Dispute over the West Philippine Sea

In the first eight months of 2011, tensions rose in relation to long-standing territorial disputes involving the Republic, other Southeast Asian nations (including Vietnam, Malaysia and Brunei) and China over certain islands in the West Philippine Sea, also known as the South China Sea. The increased tensions were brought about by allegations of more aggressive measures being taken by certain nations to assert their claims in these disputes. In July 2011, representatives of the claimant nations, along with other members of ASEAN, met in Bali, Indonesia to discuss how to advance the negotiations with respect to the competing claims. At this meeting, these nations, including China, agreed on basic guidelines for drafting the Code of Conduct to implement the 2002 ASEAN-China Declaration on the Conduct of Parties in the South China Sea. The Republic maintains that its claim over the disputed territories is supported by recognized principles of international law consistent with the 1982 United Nations Convention on the Law of the Sea (the “UNCLOS”).

The Republic reiterated its position in November 2011 during the ASEAN and East Asia summits in Bali, Indonesia, where China, the United States and representatives from a number of Asian countries were in attendance. The Republic also proposed a new peace plan for the disputed waters, which it labeled the “Zone of Peace, Freedom, Friendship and Cooperation.” The plan aims to clearly define the territorial claims of different countries in the region and then to cooperate in respecting those parts of the region where certain countries have undisputed claims, leaving the disputed territories for later resolution. No agreement has been reached to implement this plan.

On January 22, 2013, the Republic submitted a “Notification and State of Claim against China” to an arbitral tribunal in The Hague pursuant to Article 287 and Annex VII of the UNCLOS in order to achieve a peaceful solution to the dispute over the West Philippine Sea. Despite China’s decision not to participate in the proceedings, a five-member arbitral tribunal has been constituted (the “Tribunal”). On August 27, 2013, the Tribunal released its “Rules of Procedure and Procedural Order No. 1,” setting a timetable for the submission of written arguments by each of China and the Republic. The Republic submitted its written arguments on March 30, 2014, in which it addressed matters relating to jurisdiction, admissibility and the merits of the disputes. On March 16, 2015, the Republic submitted a supplemental written submission, responding to questions posed by the Tribunal relating to issues concerning the Tribunal’s jurisdiction over and the merits of the Republic’s claims. Between July 7 and 13, 2015, the Republic participated in oral hearings on the Tribunal’s jurisdiction over and admissibility of the Republic’s claim against China, and on July 23, 2015, the Republic filed a written submission responding to questions posed by the Tribunal at the hearing. On October 29, 2015, the Tribunal unanimously ruled that it has jurisdiction to consider the Republic’s claims and that such claims are admissible to arbitration. In addition, the Tribunal ruled that China’s decision not to participate in these proceedings does not deprive the Tribunal of jurisdiction and that the Republic’s decision to commence arbitration unilaterally was not an abuse of the UNCLOS’ s dispute settlement procedure. The Republic also

 

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continues to pursue the conclusion of the Code of Conduct to implement the 2002 ASEAN-China Declaration on the Conduct of Parties in the South China Sea as a complementary approach to the arbitral proceedings.

On May 10, 2013, the Republic formally lodged a protest with China concerning vessels that arrived on or around May 8, 2013 escorting a fleet of 30 fishing boats in another disputed area — the Second Thomas Shoal. The Second Thomas Shoal is near the Spratly Islands, a chain of resource-rich islands, islets and reefs which are claimed in part or in whole by each of China, Brunei, Malaysia, the Republic, Taiwan and Vietnam.

On March 30, 2014, the Republic submitted a memorial to the Tribunal regarding these actions, and the Tribunal set December 15, 2014 as the deadline for China’s submission of its Counter-Memorial. On December 16, 2014, a spokesman for the Chinese foreign ministry announced that China would not participate in the arbitration. On April 4, 2014, the Philippines Department of Foreign Affairs also lodged a protest with China regarding these actions. The Republic also raised these issues at the ASEAN summit meeting, held in May 2014 in Myanmar.

In August 2014, the Republic proposed a “triple-action plan” which sought a moratorium on activities that could escalate tensions in the West Philippine Sea while pushing for a speedy conclusion of a code of conduct in the West Philippine Sea and urging that disputes be resolved through arbitration under international law.

On July 12, 2016, the Tribunal issued its decision pursuant to the dispute settlement procedures established under the UNCLOS. The Tribunal determined that as between the Republic and China, the UNCLOS defines the scope of maritime entitlements in the West Philippine Sea and that such entitlements may not extend beyond the limits imposed therein. Accordingly, the Tribunal determined that China’s claims to historic rights, or other sovereign rights or jurisdiction, with respect to the relevant maritime areas of the West Philippine Sea are contrary to UNCLOS and without lawful effect to the extent that they exceed the geographic and substantive limits of China’s maritime entitlements under the UNCLOS. The Tribunal concluded that the UNCLOS superseded any historic rights or other sovereign rights or jurisdiction in excess of the limits imposed under the UNCLOS.

The Tribunal classified the shoals and reefs in the West Philippine Sea according to their natural condition at high tide and low tide. It was determined that although Scarborough Shoal, Johnson Reef, Cuarteron Reef, Fiery Cross Reef, Gaven Reef (north), McKennan Reef and the Spratly Islands all contain features that remain above water during high tide, these high tide features cannot sustain human habitation or economic life and thus are not entitled to an exclusive economic zone or continental shelf under the UNCLOS. Similarly, it was determined that Mischief Reef and Second Thomas Shoal are both low tide elevations that generate no maritime zones of their own. Accordingly, in respect of the foregoing, there is no possible entitlement by China to any maritime zone. Finally, the Tribunal found that both Mischief Reef and Second Thomas Shoal are located within 200 nautical miles of the Republic’s coast on the island of Palawan and are located in an area that is not overlapped by the entitlements generated by maritime features claimed by China; therefore, Mischief Reef and Second Thomas Shoal form part of the exclusive economic zone and continental shelf of the Republic.

Regarding interference in the Republic’s exclusive economic zone, the Tribunal found that China has, through the operation of its marine surveillance vessels, breached Article 77 of the UNCLOS with respect to the Republic’s sovereign rights over its continental shelf, and that China has, by promulgating its 2012 moratorium on fishing in the West Philippine Sea, without exception for areas of the West Philippine Sea falling within the exclusive economic zone of the Republic and without limiting the moratorium to Chinese flagged vessels, breached Article 56 of the UNCLOS with respect to the Republic’s sovereign rights over the living resources of its exclusive economic zone. Similarly, the Tribunal found that in failing to prevent fishing by Chinese-flagged vessels at Mischief Reef and Second Thomas Shoal in May 2013 and its failure to prevent Chinese fishing vessels from engaging in harmful harvesting activities of endangered species at Scarborough Shoal, Second Thomas Shoal and other features in the Spratly Islands, China had breached its obligations under Articles 58(3), 192 and 194(5) of UNCLOS, and that China unlawfully prevented Filipino fishermen from engaging in traditional fishing at Scarborough Shoal from May 2012 onwards.

 

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Regarding the island-building activities by China at Cuarteron Reef, Fiery Cross Reef, Gaven Reef (north), Johnson Reef, Hughes Reef, Subi Reef and Mischief Reef, the Tribunal also found that China had breached Articles 192, 194(1), 194(5), 197, 123 and 206 of the UNCLOS in failing to protect and preserve the marine environment. Moreover, the Tribunal found that in constructing installations and artificial islands at Mischief Reef without the authorization of the Republic, China had breached Articles 60 and 80 of the UNCLOS with respect to the Philippines’ sovereign rights in its exclusive economic zone and continental shelf.

Finally, regarding clashes between Chinese and Filipino vessels in the West Philippine Sea, the Tribunal found that China has, by virtue of the conduct of Chinese law enforcement vessels in the vicinity of Scarborough Shoal, created serious risk of collision and danger to Philippine vessels and personnel. The Tribunal found that China has violated Rules 2, 6, 7, 8, 15 and 16 of the Convention on the International Regulations for Preventing Collisions at Sea and, as a consequence, is in breach of Article 94 of the UNCLOS.

Immediately following the arbitral award, the Republic reiterated its abiding commitment to efforts to pursue the peaceful resolution and management of disputes with a view to promoting and enhancing peace and stability in the region. In a statement published on July 12, 2016, China declared that it considers the award null and void and without binding force. China reiterated its positions that the arbitration initiated by the Republic was in violation of earlier agreements between China and the Republic to resolve the relevant disputes in the West Philippine Sea through negotiations and that the Tribunal has no jurisdiction over the dispute.

From October 18 to 21, 2016, then President Duterte undertook a state visit to China, at which the West Philippine Sea was discussed, among other matters. In a joint statement following the visit, both sides committed to enhance cooperation between their respective coast guards to address maritime emergency incidents, as well as humanitarian and environmental concerns in the West Philippine Sea in accordance with universally recognized principles of international law including the UNCLOS. Both sides affirmed that contentious issues are not the sum total of the Philippines- China bilateral relationship and reaffirmed the importance of maintaining and promoting peace and stability, freedom of navigation in and over-flight above the West Philippine Sea, addressing their territorial and jurisdictional disputes by peaceful means, without resorting to the threat or use of force, through friendly consultations and negotiations by sovereign states directly concerned. Both sides also committed to the full and effective implementation of the 2002 Declaration on the Conduct of Parties in the South China Sea and to work substantively toward the early conclusion of a Code of Conduct in the West Philippine Sea based on consensus.

In August 2017, the 50th ASEAN Foreign Ministers’ Meeting was held in Manila and a Joint Communique was issued in relation to the West Philippine Sea. The Joint Communique emphasized the importance of non-militarization and self-restraint in the conduct of all activities by claimants and all other states. It also encouraged an improved cooperation between ASEAN and China, including the adoption of the Code of Conduct framework.

In a meeting held in Vietnam in November 2017, then President Duterte and Chinese President Xi Jinping agreed to handle the West Philippine Sea conflict through bilateral talks and reaffirmed the importance of peace in the West Philippine Sea. A few days later, at the 31st ASEAN Summit and the 20th ASEAN-China Summit, ASEAN members and China announced an agreement to begin discussion on a Code of Conduct in the West Philippine Sea to implement the 2002 ASEAN-China Declaration on the Conduct of Parties based on a negotiating framework signed in August 2017.

Over the years, the Republic continued to assert its rights against Chinese incursions into the West Philippine Sea by, among others, issuing diplomatic protests, protesting “provocative acts” including those directed by China against Philippine authorities patrolling Philippine waters as well as against a Chinese fishing ban that encroached on the Republic’s territory and exclusive economic zone and lodging notes verbales against China in relation to various maritime incidents against Philippine vessels, resulting in injury to crew and/or collisions in certain instances.

 

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Negotiations between ASEAN and China on a Code of Conduct resumed in May 2022 after being stalled due to the COVID-19 pandemic. On July 13, 2023, the ASEAN and China adopted Guidelines to accelerate negotiations for a Code of Conduct at a meeting in Jakarta.

A confrontation occurred on June 17, 2024, between the Chinese Coast Guard and the Armed Forces of the Philippines near the Ayungin Shoal. The incident at the disputed Second Thomas Shoal resulted in a Filipino sailor sustaining a severed thumb and underscored escalating tensions between the two nations. On July 2, 2024, the Republic and China held their first formal dialogue since the incident, convening the 9th Meeting of their Bilateral Consultation Mechanism on the South China Sea in Manila. Discussions focused on their respective positions on Ayungin Shoal and affirmed their commitment to de-escalating tensions. On August 8, 2024, the Philippine military reported that the Chinese Air Force executed “dangerous and provocative actions” over the West Philippine Sea. Two People’s Liberation Army aircraft dropped flares and performed hazardous maneuvers while a Philippine Air Force patrol was over Scarborough Shoal. On September 27, 2024, two Chinese missile vessels chased Philippine civilian vessels near the First Thomas Shoal (also known as Bulig Shoal) in the West Philippine Sea, the first time that a missile vessel chased a civilian boat during maritime patrols. The Philippine civilian boats, which are under the Bureau of Fisheries and Aquatic Resources, were enroute to Hasa-Hasa Shoal (also known as Half Moon Shoal) to provide food and other aid to Filipino fisherman in the area. On November 8, 2024, the President signed into law Republic Act No. 12064 or the Philippine Maritime Zones Act and Republic Act No. 12065 or the Philippine Archipelagic Sea Lanes Act. The Philippine Maritime Zones Act sets the rights and entitlements of the Philippines over its maritime zones, or the extent of the Philippines’ maritime and exclusive economic zones where it has the exclusive right to exploit and the responsibility to care for natural resources, among others. The Philippine Archipelagic Sea Lanes Act, meanwhile, identifies the Philippines’ sea lanes and the air routes through which foreign ships and aircraft pass through, among others.

These developments have not had any immediate effect on the Philippine economy or on economic relations between the Philippines and China. However, should the territorial dispute in the West Philippine Sea escalate or continue, the Republic’s interests in fishing, trade and offshore drilling may be adversely affected. The Kalayaan Island Group, in the West Philippine Sea, is rich in marine and energy resources and serves as an important source of food, livelihood and foreign exchange earnings. The discovery of oil and natural gas in commercial quantities in the region has also been important in supporting the Republic’s energy needs. One of the petroleum service contracts awarded by the Republic is located in this area. A total of approximately 880 thousand hectares are covered by this service contract. This service contract is aimed at developing an estimated 1.4 to 4.6 trillion cubic feet of natural gas.

In addition, should tensions with China escalate due to the dispute in the West Philippine Sea or other reasons, the volume of trade between the Republic and China may be adversely affected. The Republic meets a significant amount of its steel requirements from Chinese imports, thus the supply of steel available to the Republic may be reduced, which, among other things, may affect infrastructure development in the Republic. Bilateral trade between the Republic and China increased steadily from 2010 to 2025, except in 2015 and 2020, when it recorded declines. In 2025, exports to China accounted for 11.0% of the Republic’s total exports in 2025 and 12.9% in 2024. Imports from China accounted for 28.6% of the Republic’s total imports in 2025, an increase from 25.7% in 2024. In the past few years, China has been one of the Republic’s largest trading partners.

The Republic is committed to resolving disputes in the West Philippine Sea through peaceful and rules-based means and diplomatic solutions, without threat or use of force, and in accordance with international law, specifically the UNCLOS. The Republic continues to abide by the ruling of the West Philippine Sea Arbitration, and continually urges China to likewise abide by the same ruling. Several countries, such as Australia, the U.S., Germany, France, the United Kingdom, Indonesia, and Vietnam, have likewise officially stated their positions echoing the arbitral ruling or reflecting key points thereof, and calling on China to respect and be bound by the arbitral award.

The Republic continues to pursue dialogue and diplomacy with China. On 17 January 2024, the Philippines and China convened the 8th Bilateral Consultation Mechanism on the South China Sea in Shanghai pursuant to

 

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the agreement reached between President Ferdinand Marcos Jr. and President Xi Jinping in San Francisco in November 2023 to ease and manage tensions in the South China Sea and the telephone call between Philippine Secretary for Foreign Affairs Enrique Manalo and Chinese Foreign Minister Wang Yi in December 2023. During the said meeting, the Republic agreed with China that continuous dialogue is important to keep peace and stability at sea. Both sides presented their respective positions on the Ayungin Shoal and assured each other of their mutual commitment to avoid escalation of tensions. They agreed to improve maritime communication mechanisms in the South China Sea, including communications between foreign ministries and coast guards of the two countries. They also agreed to initiate talks on possible academic exchanges on marine scientific research between Filipino and Chinese scientists.

While firm in its defense of its sovereignty, sovereign rights, and jurisdiction in the West Philippine Sea, the Republic continues to remain open to addressing difficult issues with China through dialogue and diplomacy.

U.S. Mutual Defense Treaty

The Mutual Defense Treaty between the Republic and the United States (“U.S. Mutual Defense Treaty”) was signed on August 30, 1951. Under the U.S. Mutual Defense Treaty, the United States will come to the assistance of the Republic if the Republic’s metropolitan territory is attacked or if the armed forces of the Republic is attacked in the Pacific Ocean area.

In May 2023, the United States and the Republic established the Bilateral Defense Guidelines which reaffirmed the mutual defense commitments under Articles IV and V of the U.S. Mutual Defense Treaty.

Visiting Forces Agreement

The Visiting Forces Agreement (“VFA”) is a bilateral agreement between the Republic and the United States, which provides the terms under which U.S. military forces are allowed to temporarily operate in the Philippines. On February 11, 2020, the Government sent the United States a notice terminating the VFA. The termination of the VFA was set to take effect on August 9, 2020, 180 days from the date of the notice of termination.

However, on June 1, 2020, the Government suspended its termination of the VFA. On July 30, 2021, then President Duterte announced the withdrawal of the abrogation of the VFA. The Republic continues to value its decades-old partnership with the United States as its lone mutual defense treaty ally and continues to maintain robust relations with United States.

Enhanced Defense Cooperation Agreement

On April 28, 2014, the Republic and the United States signed the Enhanced Defense Cooperation Agreement (the “EDCA”) as a supplemental agreement to the U.S. Mutual Defense Treaty and the VFA. The EDCA has the goal of advancing the implementation of the Philippine—U.S. Mutual Defense Treaty, through the promotion of interoperability, capacity-building towards AFP modernization, strengthening the AFP for external defense, maritime security, maritime domain awareness and humanitarian assistance and disaster response. In 2015, the United States requested access to eight military bases to rotate troops, aircraft and ships. In April 2018, construction began on the first facility in the Basa Air Base in Pampanga in northern Luzon and was completed in January 2019. The site is intended to be used as a humanitarian assistance and disaster-relief facility. On April 3, 2023, the United States announced plans to expand into new military sites in the Republic under the EDCA. The four new sites are Naval Base Camilo Osias in Santa Ana, Cagayan, Camp Melchor Dela Cruz in Gamu, Isabela, Balabac Island in Palawan and Lal-lo Airport in Cagayan.

 

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Natural Disasters

Climate Change

Climate change has been identified as a threat to the Philippine economy, as it is dependent on climate sensitive sectors such as agriculture, tourism and energy. A change in the climate may have several consequences, including lower agriculture productivity, damage to coastal infrastructure, fragile ecosystems, impact on health and biodiversity, financial market disruption, lower GDP and altered migration matters. Increased frequency or severity of natural disasters may lead to casualties, the destruction of crops and livestock, the outbreak of waterborne disease and the destruction of infrastructure, such as roads and bridges. Droughts may negatively affect the supply of agricultural commodities, the food supply in general and the generation of hydroelectric power.

Typhoons and Flooding

Frequent regional typhoons and intense rainfall, in part due to climate change, make regions of the Republic susceptible to flash floods and landslides. In urban areas such as Metro Manila, clogging and siltation of drainage laterals and waterways caused by improper disposal of solid waste, obstructions and the presence of informal settlements along open waterways contribute to flooding. Low lying urban and rural areas, which serve as catch basins of rainwater within a watershed or river basin, also suffer from problems posed by unplanned and unregulated developments such as temporary housing and infrastructure projects and the presence of industrial operations along upstream waterways. Flooding, including as a result of Typhoon “Yolanda” in 2013, has affected hundreds of thousands of Filipinos and resulted in numerous fatalities. In addition, flooding in the Philippines has resulted in and may continue to result in significant damage to rice and other agricultural production, infrastructure and private property. Flooding and other natural disasters continue to pose a threat to other sectors such as transportation and health, and the economy as a whole. In addition to direct damage, natural disasters also inhibit social and economic development because funds must be reallocated from existing programs to finance relief and reconstruction assistance.

The transportation sector is heavily affected by floods and other natural disasters that damage roads and bridges. If a natural disaster destroys critical transportation infrastructure, roads and bridges must be repaired before other disaster-related damage can be addressed. As a result, damage to transportation infrastructure can compound the effect that floods have on other sectors. For instance, the impact of flooding and other natural disasters on the health sector is mostly seen in the disruption of the delivery of health services. Damaged roads and bridges hinder the efficient transport of patients to hospitals and medical facilities in cities and reduce the capacity of the Government to deliver timely medical services to affected populations in rural areas.

Flooding also adversely affects agricultural production by damaging crops, livestock, poultry and fisheries, as well as destroying fishing boats, farming equipment, inventory and agricultural infrastructure such as irrigation channels, spillways and farm-to-market roads. In urban areas, the manufacturing, construction, wholesale and retail, restaurant and real estate industries are also impacted by the damage caused by flooding.

In November 2013, Typhoon “Yolanda” (also known as Typhoon “Haiyan”), the Philippines’ worst typhoon on record, made landfall in Eastern Samar, sustaining winds of 270 to 312 km/h while passing over the Philippines. The impact of Typhoon “Yolanda” was centered on Regions VI, VII, and VIII. A State of National Calamity was declared in Samar, Leyte, Cebu, Iloilo, Capiz, Aldan, and Palawan, and 6,300 people were reported dead from the storm, 1,061 persons were reported missing and 28,689 persons had been injured. Estimated damages had reached ₱89.6 billion, comprising an estimated ₱55.1 billion to the social sector, ₱21.8 billion to the productive sector, ₱9.6 billion to infrastructure and ₱3.1 billion in cross-sectoral damages in the regions affected by the storm.

In December 2021, Typhoon “Odette” (also known as Typhoon “Rai”), a category 5 super typhoon, hit the Philippines. Typhoon “Odette” caused an estimated ₱24.6 billion in damage to crops, public infrastructure, and

 

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private property, and destroyed more than 1.7 million houses in eight provinces. Rehabilitation efforts are ongoing throughout the affected areas through programs led by the national and local governments.

In late September 2022, category 3 Typhoon “Noru” (also known as Super Typhoon “Karding”) made its way across the island of Luzon in the Philippines after having made landfall northeast of Manila. The state weather agency reported sustained winds of 175 km/h and gusts of up to 290 km/h on the island. Nearly 8,400 people were pre-emptively evacuated from the path of Typhoon “Noru”, which left communities and farmland submerged due to heavy flooding across several northern provinces. Typhoon “Noru” caused an estimated ₱1.29 billion in damage to crops, impacting more than 141,000 hectares of agricultural land and 82,000 farmers and fisherfolk. It is estimated that 12.7 million people live in the areas affected by Typhoon “Noru”, with approximately 6.8 million people, of which approximately 689,000 are vulnerable, living in the worst affected areas. The cost to rebuild in the worst affected areas is estimated at approximately ₱31.9 billion.

In October 2024 and November 2024, the Philippines was hit by six different typhoons with varying degrees of severity. On October 24, 2024, Typhoon “Kristine” (also known as Typhoon “Trami”) made landfall in northern Philippines, with sustained winds of 95 km/h and gustiness of up to 160 km/h. It brought widespread, torrential rains to other parts of the Philippines even before it hit land, inundating entire towns with severe flooding and triggering deadly landslides. On October 31, 2024, Typhoon “Leon” (also known as Typhoon “Kong-rey”) made landfall over southeastern Taiwan but affected northern Philippines with sustained winds of 155 km/h and gustiness of up to 255 km/h. On November 7, 2024, Typhoon “Marce” (also known as Typhoon “Yinxing”) made landfall in northern Philippines, with sustained winds of 175 km/h and gustiness of up to 240 km/h and brought torrential rain, storm surges and landslides. On November 11, 2024, Typhoon “Nika” (also known as Typhoon “Toraji”), made landfall in northern Philippines, with sustained winds of 130 km/h and gustiness of up to 180 km/h. On November 14, 2024, Typhoon “Ofel” (also known as Typhoon “Usagi”), made landfall in northern Philippines, with sustained winds of 175 km/h and gustiness of up to 240 km/h. On November 17, 2024, Typhoon Pepito (also known as Typhoon “Man-yi”) made two landfalls in northern Philippines, with sustained winds of 185km/h and gustiness of up to 305 km/h. According to preliminary data from the National Disaster Risk Reduction and Management Council, as of December 4, 2024, Typhoons Nika, Ofel and Pepito affected 1,170,975 families and resulted in damage to agriculture and infrastructure estimated at ₱699 million and ₱3.0 billion, respectively.

Typhoons, Flood Control Projects and Corruption Allegations

In 2025, the Philippines was hit by numerous typhoons of varying degrees of severity, which brought widespread torrential rains, severe flooding and landslides. In the context of these disasters and those in the prior year, there have been protests and media focus centered on irregularities in government-funded flood control infrastructure projects. Public discussion has focused on claims of overpricing, sub-standard works, delayed implementation, incorrectly placed infrastructure, ghost projects, and misallocation of government funding relating to such projects. President Marcos has stated his resolve to hold erring officials to account, and the Senate of the Philippines, the Independent Commission for Infrastructure and the Department of Public Works and Highways, together with other responsible agencies, are conducting investigations on flood control infrastructure project issues. These investigations remain ongoing. Certain Department of Public Works and Highways officials have been charged, dismissed, relieved or reassigned, and certain contractors and public officials have been implicated, with some facing project suspension or termination, blacklisting or administrative, civil and criminal liability if evidence warrants. The Philippines has pledged to protect the public interest, but has stressed the need to continue with flood control infrastructure projects, which remain a national priority.

Earthquakes and Volcanic Eruptions

The Philippines is located in the “Pacific Ring of Fire” and along a complex system of fault lines, which geologists refer to as the “Philippine Mobile Belt.” As a consequence, the Republic is susceptible to volcanic eruptions and periodic seismic activity, such as the magnitude 7.8 earthquake on Luzon Island in 1990, one of the

 

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strongest earthquakes to hit the country, and the eruption of Mount Pinatubo in 1991, one of the largest volcanic eruptions in the 20th century. In January 2020, Taal Volcano entered into a period of intense unrest beginning with phreatic or steam-driven activity in several points inside Taal Volcano’s main crater that progressed into magmatic eruption. The Philippine Institute of Volcanology and Seismology (“PHILVOCS”) raised the alert level to alert level 4 on January 12, 2020, which meant that hazardous explosive eruption is possible with hours to days. Pursuant to such events, PHILVOCS ordered the total evacuation of the Volcano Island and high-risk areas within a 14-kilometer radius from Taal Volcano’s main crater. PHILVOCS has since lowered the alert level covering Taal Volcano to Level 1. These natural disasters have resulted in loss of life, the displacement of people and destruction of property.

In 2024, the Kanlaon volcano in Negros island erupted twice in June and December, displacing close to 50,000 individuals or over 11,000 families in 32 barangays in Western Visayas and Central Visayas.

On May 2, 2026, Mayon volcano spewed heavy ash flow, affecting 55,590 families across 124 barangays in Albay. As of June 2026, Mayon volcano was at Alert Level 3, Kanlaon volcano at Alert Level 2, and Taal volcano at Alert Level 1.

Philippine Economy

COVID-19

COVID-19, an infectious disease that was first reported to have been transmitted to humans in late 2019, has spread globally over the course of 2020, and in March 2020 it was declared as a pandemic by the World Health Organization. On January 30, 2020, the Philippines reported its first confirmed case of COVID-19. The subsequent spread of the disease has since resulted in 3,901,033 confirmed cases and the death of 62,249 people in the Philippines as of September 9, 2022, according to the Philippine Department of Health. The Government, on a national and local level, has implemented a number of measures in varying degrees to contain the spread of COVID-19, including, among others, social distancing measures, implementation of self-isolation and community quarantine measures, closure of schools, suspension of mass public transport facilities, restrictions on public gatherings, suspension of operations of non-essential businesses and travel restrictions.

On March 27, 2021, following a sharp spike in COVID-19 infections, the Government announced that the National Capital Region and the surrounding provinces of Bulacan, Laguna, and Rizal (“NCR Plus”), as well as other parts of the Philippines, would be placed under enhanced community quarantine (“ECQ”) from March 29 to April 11, and under modified ECQ until May 14, 2021. Following this, the restrictions were eased, and the areas comprising NCR Plus were placed under a general community quarantine. This status continued until June, which saw an increase in COVID-19 cases in other provinces outside the greater Manila region notwithstanding the Government’s vaccination efforts, and which led to the provinces of Cagayan, Apayao, Ifugao, Bataan, Iloilo, Negros Oriental, Zamboanga Sibugay, Zamboanga del Sur, Zamboanga del Norte, Agusan del Sur, Dinagat Islands, Surigao del Sur and the cities of Santiago, Lucena, Puerto Princesa, Naga, Iloilo, Davao, Butuan, Cagayan de Oro, and Zamboanga City being placed under modified enhanced community quarantine until the end of June 2021.

In 2023, the Republic was able to sustain sufficient capacity within its health care system with low hospitalization rates among COVID-19 cases. COVID-19 infection rates have been decreasing since July 2023 with the Republic experiencing an average daily case rate of below 400, with the average daily case rate of August 2023 dipping to 118. Given this improvement, the Government lifted the state of public health emergency through Proclamation No. 297. Nonetheless, the Government continued its efforts to increase vaccination uptake including the promotion of bivalent vaccines.

Legislative Efforts to Combat COVID-19

Former President Duterte’s emergency powers under Republic Act No. 11494, otherwise known as the “Bayanihan to Recover as One Act”, lapsed on December 19, 2020.

 

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On December 29, 2020, then President Duterte signed Republic Act No. 11519 and Republic Act No. 11520 into law. Republic Act No. 11519 extended the availability of funds appropriated through the Bayanihan to Recover as One Act until June 30, 2021. Republic Act No. 11520 extended the availability of the 2020 budget until December 31, 2021, which enabled government agencies to spend or release unused funds under the 2020 budget during the course of 2021, rather than expiring at the end of 2020, which would have otherwise been the case.

Republic Act No. 11523, the Financial Institutions Strategic Transfer (FIST) Act (the “FIST Act”) was signed into law on February 16, 2021, and became effective on February 17, 2021. The FIST Act is intended to assist banks and other financial institutions by enabling them to sell their non-performing assets and bad loans to asset management companies, referred to as FIST corporations. It aims to strengthen the banking industry’s risk- bearing capacity, and free up capital for productive uses in the economy rather than the management of non-performing loans.

The Corporate Recovery and Tax Incentives for Enterprise (“CREATE”) Act was passed into law on March 26, 2021. The CREATE Act allows businesses to recover from the effects of the COVID-19 pandemic and aims to improve the Republic’s capacity to attract investments by lowering the corporate income tax rate and rationalizing the Republic’s tax incentives system by making it targeted, time-bound, and performance-based. Certain temporary measures under CREATE were lifted through the issuance of Revenue Memorandum Circular No. 69-2023 which became effective on July 1, 2023.

COVID-19 Vaccination and Related Efforts

In January 2021, the Department of Health unveiled its Philippine National Deployment and Vaccination Plan for COVID-19 Vaccines. As part of this plan, the Government secured initial doses of vaccines from various manufacturers and participated in the World Health Organization’s COVAX facility in order to increase the Republic’s access to vaccine supplies.

In February 2021, the IATF adopted a vaccination priority framework conceived by the Interim National Immunization Technical Advisory Group to promote the effective deployment of the Republic’s vaccination efforts in light of the limited supply of vaccines. On February 26, 2021 then President Duterte signed into law the COVID-19 Vaccination Program Act of 2021, which authorized local government units to undertake negotiated procurement of COVID-19 vaccines, and also authorized private entities, including the Philippine Red Cross, to procure vaccines in coordination with the Government.

On March 1, 2021, the Government began its vaccination drive, with vaccines being administered to frontline health care professionals followed by eligible senior citizens, persons with comorbidities, frontline personnel in essential sectors, and indigent persons, before the vaccines were opened to the rest of the population in October 2021. As of June 25, 2021, the Philippine Food and Drug Administration (“FDA”) had granted emergency use authorization to eight COVID-19 vaccines. The Government has ramped up its COVID-19 vaccination efforts to include children aged 12 to 17 with effect from November 3, 2021, and the FDA on December 23, 2021 approved emergency use of some vaccines for children aged five to 11.

The Philippine FDA amended its emergency use authorization for certain COVID-19 vaccines to make way for a booster program. On November 16, 2021, the National Task Force Against COVID-19 issued interim operational guidelines on the administration of COVID-19 booster doses to essential workers and frontline health service providers. On November 19, 2021, the task force issued additional interim guidelines, expanding the coverage of the booster program to senior citizens aged 60 and above, and to adults with comorbidities. On December 23, 2021, the FDA announced that it had approved a shorter administration interval between the primary doses and booster shots, making around 19 million fully-vaccinated adults eligible to receive booster doses.

 

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On July 26, 2022, the Marcos administration, together with various local government units, launched the “PinasLakas” campaign, a vaccination drive that aims to vaccinate 90% of the country’s senior citizens and to administer booster doses to 50% of the target population during the first 100 days of the Marcos administration.

In addition to the vaccine program, the Philippine FDA also granted emergency use authorization to an anti-COVID pill for use in treating adults with mild to moderate symptoms, as well as those at risk of developing severe illnesses such as senior citizens and individuals with comorbidities.

Economic Impacts

The uncertainty due to the COVID-19 pandemic, including possible delays in the delivery of vaccines and the emergence of new variants of concern, continue to pose downside risks to the Republic’s economic recovery. Nonetheless, the Government consistently monitors developments to assess the potential impact of the COVID-19 pandemic and implement appropriate policies to mitigate the associated risks. To ensure the continued safety of the economy’s gradual reopening, the Government intends to continue to accelerate vaccination, and implement a risk-based approach to restrictions through the rollout of the alert level system in the Republic.

Maharlika Investment Fund

In July 2023, President Marcos signed into law Republic Act No. 11954 which established the Maharlika Investment Fund, the Republic’s first sovereign wealth fund, to support the Government’s economic goals laid out in the Medium-Term Fiscal Framework (“MTFF”), the 8-point Socioeconomic Agenda and the Philippine Development Plan 2023-2028. In November 2023, the Maharlika Investment Corporation was established to govern and manage the Maharlika Investment Fund.

Medium-Term Fiscal Framework

In 2023, the Marcos administration launched the Republic’s MTFF. The Republic’s MTFF aims to reduce fiscal deficit, promote fiscal sustainability, and enable robust economic growth. The priority measures under the MTFF are aimed at (1) promoting efficient tax administration through digitalization, (2) implementing measures to help tax system catch up in the digital economy, (3) introducing tax measures to promote environmental sustainability to address climate change and (4) pursuing remaining tax reform packages.

The New Government Procurement Act

On July 20, 2024, President Marcos signed into law Republic Act No. 12009, or the New Government Procurement Act. This law is aimed to enhance the existing procurement systems through (i) fit- for-purpose modalities to achieve value for money, (ii) strengthening procurement planning of procuring entities with mandatory market scoping and strategies to be used, (iii) modernizing procurement processes with the use of emerging technologies and innovative solutions, (iv) institutionalizing sustainable public procurement principles and practices with environmental, social and economic considerations, life cycle, gender parity, poverty alleviation, and fair opportunities to vulnerable and marginalized sectors, (v) enhancing transparency and ensuring greater accountability with open government, participatory procurement and use of beneficial ownership information in procurement, and (vi) professionalizing procurement practitioners to foster a skilled and competent workforce dedicated to excellence in government procurement.

Value-Added Tax on Digital Transactions

On October 2, 2024, President Marcos signed into law Republic Act No. 12023, which imposes a 12% Value-Added Tax (“VAT”) on digital services performed or rendered in the Philippines, which includes online search engine, online marketplace, cloud services, online media and advertising, online platform and digital goods.

 

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The CREATE MORE Act

On November 11, 2024, President Marcos signed into law Republic Act No. 12066, or the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy Act (“CREATE MORE Act”). The CREATE MORE Act aims to provide ease of doing business by simplifying local taxation, clarifying the process for VAT and duty incentives, and expanding support to non-registered exporters and high- value domestic market enterprises. It is also believed to improve the tax regime by, among others, lowering the corporate income tax from 25% to 20%, doubling the power expenses deductions from 50% to 100%, adding a 50% deduction for tourism and trade fairs, and extending the maximum period of incentives to up to 27 years. Furthermore, the threshold for entities required to obtain approval from the Fiscal Incentives Review Board is increased from ₱1 billion to ₱15 billion in investment capital, which is hoped to create a more efficient approval process.

Overview

Like many developing countries after World War II, the Philippines protected local industry from foreign competition through measures such as import tariffs and quotas, and hoped to replace imported finished goods with domestically produced goods over time. Successive administrations also intervened in domestic economic affairs by imposing quantitative trade barriers, price controls and subsidies. Initially, the economy grew rapidly, with GNI growing at an average rate of 5.7% per annum from 1970 to 1980, largely due to increased exports and Government investments. Infrastructure spending increased, and state ownership and nationalization of commercial enterprises became more prevalent. By the early 1980s, however, the Republic began to face increasing budget deficits, growing levels of foreign and domestic borrowing, rising inflation, climbing interest rates, a depreciating peso, declining investment capital and slowing economic growth or, at times, a contraction in GNI. The Republic’s unstable political situation during that period, highlighted by the assassination of opposition leader Benign Aquino in 1983, exacerbated its economic problems.

The general optimism brought about by the peaceful removal of the unpopular Marcos administration in 1986 helped economic recovery. GNI grew by 3.4% in 1986, increasing to a growth of 6.8% in 1988 before reversing to a decline of 0.6% in 1991. The economic contraction in the early 1990s was caused principally by underlying macroeconomic imbalances, compounded by supply bottlenecks, natural disasters, political instability, a global recession and the Persian Gulf crisis of 1990 to 1991.

The government of then President Corazon Aquino, who came to power in 1986, embarked on a stabilization program aimed at preventing an upsurge in inflation, controlling the fiscal deficit and improving the external current account position. The economy responded favorably to these measures, posting increases in GNI, investments, private consumption and imports in 1992. The Corazon Aquino administration also recognized that the Republic’s economic difficulties in large part resulted from its protectionist policies. The Corazon Aquino administration therefore initiated reforms to open the economy to market forces and reduce the size and role of the government in the Philippine economy. The government of then President Fidel Ramos, who assumed office in 1992, accelerated the reform efforts initiated by the Corazon Aquino administration. Following a review of a number of the policies and programs initiated by previous administrations, the Estrada administration continued many of the financial policies and market-oriented reforms of the Corazon Aquino and Ramos administrations.

After the onset of the Asian economic crisis in mid-1997, the Philippines experienced economic turmoil characterized by currency depreciation, a decline in the performance of the banking sector, interest rate volatility, a significant decline in share prices on the local stock market and a reduction of foreign currency reserves. These factors led to a slowdown in the Philippine economy in 1997 and 1998. In response, the Government adopted a number of policies to address the effects of the Asian economic crisis by strengthening the country’s economic fundamentals.

The Philippines was not as severely affected by the Asian financial crisis as many of its neighbors, aided in part by remittances from Overseas Filipino Workers (“OFWs”). With the exception of 1998, when agricultural

 

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harvests were negatively impacted by poor weather and drought, the Republic had recorded positive real GDP growth every year since the Asian financial crisis. After a 0.6% decline in 1998, GDP growth increased to 3.1% in 1999 and 4.4% in 2000 before slowing down to 2.9% in 2001. In the early 2000s, the Government pursued economic strategies to improve infrastructure, implement changes to the tax system, support deregulation and privatization of the economy, and further develop trade ties within Asia. GDP growth increased to 3.7% in 2002 and 5.0% in 2003 notwithstanding the impact of the Iraq War, the SARS epidemic and credit ratings downgrades. GDP growth accelerated to 6.7% in 2004 before leveling off to 4.8% in 2005 and 5.2% in 2006.

Against the backdrop of the global financial crisis which began in the second half of 2007, the Republic experienced limited exposure to subprime assets and bankrupt financial institutions. Nonetheless, in 2008, the Republic experienced slower growth rates, a weakening of equity prices, a lower exchange rate for the peso against major currencies and increasing inflation. In 2009, the Republic’s economy began to exhibit indications of a recovery, although certain of the Republic’s economic recovery policies had yet to result in positive effects. In 2010, the Republic continued its recovery despite an erratic economic recovery globally.

Between 2012 and 2015, the Republic was largely spared from the economic fallout of the European sovereign debt crisis due primarily to minimal trade and financial linkages with the affected nations, but the Republic nevertheless sought through its financial regulatory framework and monetary policy to mitigate the impact on the Republic of the European sovereign debt crisis and the resulting economic slowdown in Europe.

In January 2020, the IMF world economic outlook update projected that the Republic would see economic growth at 6.3% in 2020, underpinned by an increase in government spending and monetary policy easing. In April 2020, however, against the backdrop of the COVID-19 outbreak, the IMF world economic outlook update revised downwards its economic growth forecasts for the Republic to 0.6%.

The Government initially expected the Republic’s GDP to contract by 2% to 3.4% due to the economic effects of the COVID-19 outbreak and the resulting domestic shutdowns, border controls, reduced tourism, disrupted trade and manufacturing and financial market spillovers.

On May 7, 2020, the NEDA reported that the Philippine economy had slowed down for the first time in 22 years, contracting 0.2% in the first quarter of 2020, from a 5.6% growth rate in the first quarter of 2019. In June 2020, the IMF world economic outlook update further revised its economic growth forecasts downwards, projecting the Republic’s GDP to contract by 3.6% in 2020. The Bangko Sentral had also projected that Philippine GDP for the second quarter of 2020 would decline by 5.7% to 6.7%. However, on August 7, 2020, the Philippine Statistics Authority announced that the Republic’s second quarter GDP contracted by 16.5%, primarily as a result of the lockdowns in April and May 2020.

In 2021, quarantine restrictions and other responses by the Government affected employment and productivity of the economy. The Government’s economic managers reported that the unemployment rate moderately increased from 7.1% in March 2021 to an estimated 7.4% in October 2021, an effect attributed to the re-imposition of enhanced community quarantine restrictions, the continued imposition of strict quarantine measures, and weather disturbances that affected agriculture, most notably Typhoon Jolina which affected some 30,000 hectares of agricultural land across the regions of Central Luzon, Calabarzon, MIMAROPA, Bicol, Western Visayas, Central Visayas, and Eastern Visayas. The NEDA noted that as restrictions eased in favor of more granular lockdowns, labor outcomes are expected to improve.

The NEDA also cautioned that it estimated that the impact of the COVID-19 pandemic would cost the Philippine economy ₱41.4 trillion over the next 40 years.

In 2024, GDP grew by 5.7%, with the wholesale and retail trade; repair of motor vehicles and motorcycles, financial and insurance activities and construction sectors as the main contributors to such growth. However, continuing geopolitical tensions, such as the conflict between Russia and Ukraine, resulted in trade disruptions in

 

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key industries, which may have contributed to accelerated inflation. The Republic believes that domestic liquidity remains adequate to meet the demand for financing to support economic growth in the Philippines; however, there can be no assurance that a contraction in liquidity in the international financial markets will not adversely impact the financial condition of the Republic or of Philippine companies generally.

Recent Economic Indicators

The following table sets out the performance of certain of the Republic’s principal economic indicators for the specified periods.

Years 2021 – 2026

 

		2021				2022				2023				2024				2025(1)				2026(2)
GDP growth (constant 2018 prices) (%)			5.7				7.6				5.5				5.7				4.4				2.8
GNI growth (constant 2018 prices) (%)			1.7				9.9				10.4				7.7				6.1				3.0
Inflation rate (2018 CPI basket)(%)			3.9				5.8				6.0				3.2				1.7				4.1
Unemployment rate			7.8				5.4				4.4				3.8				4.2				5.0
91-day T-bill rate (%)			1.1				1.9				5.4				5.7				5.2				5.0	(3)
External position
Balance of payments ($ million)			1,345				(7,263	)			3,672				609				(5,661	)			N/A
Export growth(5) (%)			12.5				6.4				(4.3	)			(0.4	)			15.2				N/A
Import growth(5) (%)			30.5				19.0				(4.8	)			2.2				5.0				N/A
External debt ($ billion)			106.4				111.3				125.4				137.6				147.7				N/A
International reserves
Gross ($ billion)			108.8				96.1				103.8				106.3				110.8				104.0	(4)
Net ($ billion)			108.8				96.1				103.7				106.2				110.8				104.0	(4)
Months of retained imports(6)			9.7				7.2				7.6				7.3				7.3				6.9	(4)
Domestic credit growth (%)			8.2				12.7				9.3				10.4				10.5				N/A

Sources: Philippine Statistics Authority; Bangko Sentral.

Notes:

 

(1)	Preliminary data as of and for the year ended December 31, 2025, unless otherwise stated.

(2)	Preliminary data as of and for the three months ended March 31, 2026, unless otherwise stated.

(3)	For May 2026.

(4)	Preliminary data as of May 31, 2026.

(5)	Goods export growth and goods import growth.

(6)	Number of months of average imports of goods and payment of services and primary income that can be financed by reserves.

GDP and Major Financial Indicators

Periodic Revisions to Philippine National Accounts

Economists show gross domestic product (“GDP”) and gross national income (“GNI”) in both current and constant market prices. Presentations of GDP and GNI at current market prices value a country’s output using the actual prices for each year, whereas GDP and GNI at constant market prices (also referred to as “real” GDP and GNI) value output using the prices from a specified base year, thereby eliminating the distorting effects of inflation and deflation.

The Philippine Statistics Authority (“PSA”) releases quarterly data on the Republic’s national accounts, which include GDP and GNI data. Under PSA policy, GDP and GNI data for a particular quarter are revised the

 

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following quarter, while annual data are released together with first quarter data and are revised thereafter in May of each year. GDP and GNI estimates are considered “final” after three years. However, the PSA may still revise the “final” estimates whenever it undertakes an overall revision of the national accounts.

Revisions in the Republic’s national accounts are normally due to the availability of new or more complete data, receipt of revised data from original sources, and inclusion or exclusion of emerging or closed industries. The PSA has traditionally followed the 1968 revision of the United Nations System of National Accounts.

In the first quarter of 2011, the standards under the Philippine System of National Accounts (the “PSNA”) for the calculation of GDP and GNI (known as gross national product prior to the 2011 revisions) were revised, changing the constant base year for these calculations from 1985 to 2000. In April 2020, the PSNA further revised the PSNA standards, changing the constant base year for GDP calculations from 2000 to 2018.

Gross Domestic Product

Gross domestic product, or GDP, measures the market value of all final goods and services produced within a country during a given period. By comparison, gross national income, or GNI, measures the market value of all final goods and services produced by a country’s residents during a given period, whether or not the production occurred within the country.

In 2021, GDP grew by 5.7%, compared with a contraction of 9.5% in 2020. The largest contributor to growth in 2021 was the improved management of the COVID-19 pandemic, driven by industry sector growth of 8.5% in 2021 compared with a contraction of 13.1% in 2020, as a result of the COVID-19 pandemic. The services sector also grew by 5.4% in 2021 compared to a contraction of 9.1% in 2020. GNI in 2021 grew by 1.7% compared to a contraction of 11.5% in 2020. Net primary income contracted by 51.6% in 2021 compared to a contraction of 31.1% in 2020.

In 2022, GDP grew by 7.6%, compared with growth of 5.7% in 2021. The largest contributor was the gradual reopening of the economy which saw the services sector record 9.2% growth in 2022 compared to 5.4% in 2021. GNI grew by 9.9% in 2022 compared to a growth of 1.7% in 2021. Net primary income grew by 77.3% in 2022 compared to a contraction of 51.6% in 2021.

In 2023, GDP grew by 5.5%, compared with growth of 7.6% in 2022. The largest contributors in 2023 were the wholesale and retail trade sector, which recorded growth of 5.5% in 2023, and the financial and insurance activities sector, which recorded growth of 8.8% in 2023. This was partially offset by a decrease in the rate of growth in the industry sector, from growth of 6.5% in 2022 to growth of 3.6% in 2023. GNI in 2023 grew by 10.4%, compared to growth of 9.9% in 2022. The growth in net primary income of 96.6% in 2023 represented an increase from the 77.3% growth in 2022.

In 2024, GDP grew by 5.7%, compared with growth of 5.5% in 2023. The largest contributors in 2024 were the wholesale and retail trade; repair of motor vehicles and motorcycles sector, which recorded growth of 5.6% in 2024, the financial and insurance activities sector, which recorded growth of 9.0% in 2024, and the construction sector, which recorded growth of 10.3% in 2024. This was partially offset by a decline in the agriculture, forestry and fishing sector, from a growth of 1.2% in 2023 to a decline of 1.6% in 2024. GNI in 2024 grew by 7.7%, compared to a growth of 10.4% in 2023. The growth in net primary income of 26.1% in 2024 represented a decline compared to the 96.6% growth in 2023.

In 2025, GDP grew by 4.4%, compared with growth of 5.7% in 2024. The largest contributors in 2025 were the wholesale and retail trade; repair of motor vehicles and motorcycles sector, which recorded growth of 5.3% in 2025, the financial and insurance activities sector, which recorded growth of 5.9% in 2025, and the manufacturing sector, which recorded growth of 2.5% in 2025. GNI in 2025 grew by 6.1%, compared to a growth of 7.7% in 2024. The growth in net primary income of 19.7% in 2025 represented a decline compared to the 26.1% growth in 2024.

 

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In the first quarter of 2026, GDP growth moderated to 2.8%, compared with 5.4% in the same quarter last year. Growth was mainly weighed down by the slower growth in manufacturing sector, which recorded growth of 0.5% in the first quarter of 2026; wholesale and retail trade, repair of motor vehicles, and motorcycles, which recorded growth of 4.6%; and the financial and insurance activities sector, which recorded growth of 3.4%, as well as the sustained decline in construction at 2.8% in the first quarter of 2026. GNI grew by 3.0% in the first quarter of 2026, compared with 7.2% in the first quarter of 2025. Net primary income grew by 4.5% in the first quarter of 2026 compared to growth of 22.2% during the same period in 2025.

The following table shows GDP by sector, net primary income and GNI at current market prices for the specified periods.

 

		Gross Domestic Product by Major Sector (at current market prices)																								Percentage of GDP
		2021				2022				2023				2024				2025				2026(1)				2021				2026(1)
		(₱ in millions, except as indicated)																								(%)
Agriculture, forestry and fishing sector			1,954,487				2,104,090				2,285,564				2,403,539				2,406,532				618,405				10.1				8.9
Industry sector
Mining and quarrying			185,371				280,249				232,171				234,167				265,083				89,355				1.0				1.3
Manufacturing			3,424,049				3,795,335				3,946,171				4,145,218				4,294,019				1,175,331				17.6				17.0
Electricity, steam, water, and waste management			650,961				746,104				844,196				897,394				931,646				255,528				3.4				3.7
Construction			1,347,309				1,615,247				1,833,309				2,045,728				2,069,068				395,510				6.9				5.7
Total			5,607,689				6,436,935				6,855,847				7,322,507				7,559,816				1,915,724				28.9				27.6
Service sector
Wholesale and retail trade; repair of motor vehicles and motorcycles			3,502,794				3,987,550				4,445,383				4,875,124				5,197,837				1,155,588				18.0				16.7
Transport and storage			605,204				807,323				977,712				1,074,832				1,156,230				291,576				3.1				4.2
Accommodation and food service activities			285,187				396,144				510,209				587,383				636,066				192,713				1.5				2.8
Information and communication			640,034				696,022				732,461				770,319				805,368				192,750				3.3				2.8
Financial and insurance activities			1,963,148				2,224,675				2,565,066				2,887,463				3,106,421				857,298				10.1				12.4
Real estate and ownership of dwellings			1,139,221				1,246,861				1,369,416				1,488,186				1,584,965				401,606				5.9				5.8
Professional and business services			1,222,489				1,350,881				1,488,722				1,643,967				1,769,273				410,981				6.3				5.9
Public administration and defense; compulsory social activities			1,027,079				1,119,710				1,189,235				1,285,812				1,419,814				280,298				5.3				4.0
Education			796,472				880,390				969,550				1,055,564				1,182,922				305,764				4.1				4.4
Human health and social work activities			385,750				411,577				459,896				527,792				610,298				150,217				2.0				2.2
Other services			281,061				366,118				464,502				526,955				574,392				161,013				1.4				2.3
Total			11,848,438				13,487,251				15,172,152				16,723,397				18,043,587				4,399,803				61.0				63.5
Total GDP			19,410,614				22,028,276				24,313,563				26,449,443				28,009,935				6,933,932				100.0				100.0
Net primary income			690,388				1,294,379				2,664,590				3,433,178				4,188,900				1,016,477
Total GNI			20,101,002				23,322,655				26,978,153				29,882,621				32,198,834				7,950,409
Total GDP ($ billions)(2)			394.1				404.4				437.1				461.7				487.1				116.7
Per capita GDP, PPP concept ($)(3)			9,101				10,406				11,288				12,123				12,900				13,366

Source: Philippine Statistics Authority.

 

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Notes:

 

(1)	Preliminary data for the first three months of 2026.

(2)	Calculated using the average exchange rate for the period indicated. See “—Monetary System-Foreign Exchange System.”

(3)	The 2026 figure represents annualized per capita GDP, PPP concept, based on preliminary data for the first three months of 2026.

The following table shows GDP by sector, net primary income and GNI at constant 2018 market prices for the specified periods.

 

		Gross Domestic Product by Major Sector (at constant market prices)																								Percentage of GDP
		2021				2022				2023				2024				2025				2026(1)				2021				2026(1)
		(₱ in millions, except as indicated)																								(%)
Agriculture, forestry and fishing sector			1,775,210				1,783,735				1,805,217				1,777,999				1,832,888				455,741				9.6				8.1
Industry sector
Mining and quarrying			144,498				152,183				155,251				157,272				161,095				46,036				0.8				0.8
Manufacturing			3,556,426				3,729,157				3,780,868				3,920,535				4,019,777				1,084,678				19.2				19.3
Electricity, steam, water, and waste management			615,591				647,222				684,753				734,893				740,790				171,560				3.3				3.0
Construction			1,235,106				1,385,186				1,507,364				1,660,532				1,662,025				314,616				6.7				5.6
Total			5,551,622				5,913,748				6,128,235				6,473,232				6,583,687				1,616,890				29.9				28.7
Service sector
Wholesale and retail trade; repair of motor vehicles and motorcycles			3,413,864				3,710,785				3,914,600				4,133,192				4,350,644				947,473				18.4				16.8
Transport and storage			547,807				679,371				767,806				835,322				890,921				235,278				3.0				4.2
Accommodation and food service activities			248,404				329,124				404,674				447,812				473,995				134,030				1.3				2.4
Information and communication			638,971				690,072				718,703				752,429				782,460				188,284				3.4				3.3
Financial and insurance activities			1,854,248				1,987,008				2,160,827				2,353,733				2,491,818				661,404				10.0				11.8
Real estate and ownership of dwellings			1,054,235				1,108,167				1,151,914				1,212,253				1,267,382				309,861				5.7				5.5
Professional and business services			1,136,507				1,240,353				1,324,886				1,425,800				1,495,423				321,883				6.1				5.7
Public administration and defense; compulsory social activities			959,685				1,003,397				1,025,233				1,072,145				1,145,387				245,543				5.2				4.4
Education			744,159				796,154				844,718				885,724				954,461				253,614				4.0				4.5
Human health and social work activities			351,472				364,223				390,510				432,756				483,135				128,303				1.9				2.3
Other services			263,899				339,470				409,071				446,744				476,436				128,656				1.4				2.3
Total			11,213,252				12,248,122				13,112,940				13,997,909				14,812,061				3,554,330				60.5				63.2
Total GDP			18,540,084				19,945,605				21,046,393				22,249,140				23,228,637				5,626,961				100.0				100.0
Net primary income			639,322				1,130,111				2,221,265				2,801,259				3,352,716				828,926
Total GNI			19,179,406				21,075,715				23,267,658				25,050,400				26,581,353				6,455,887

Source: Philippine Statistics Authority.

Notes:

 

(1)	Preliminary data for the first three months of 2026.

 

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Principal Sectors of the Economy

Agriculture, Forestry and Fishing Sector

The agriculture, forestry, and fishing sector’s share to GDP was approximately 8.1% in the first quarter of 2026, compared to approximately 9.6% in 2021.

The Republic’s principal agricultural products include cereals, such as rice and corn, both of which are cultivated primarily for domestic use, and other crops, such as coconuts, sugar cane and bananas, produced for both the domestic market and export. The Philippines’ diverse agricultural system contains many coconut plantations farmed by agricultural tenants and workers, sugar haciendas farmed either under labor administration or by tenants, and large “agro-business” plantations devoted mainly to crops for export such as bananas and pineapples. Rice, corn and coconuts each account for approximately a quarter of the country’s cultivated area. Fishing production is divided into commercial, municipal and aquaculture fishing.

The country’s forests, one of the Philippines’ main natural resources, contain a large quantity of hardwood trees. Over the years, population growth, shifting cultivation, illegal logging and inadequate reforestation have depleted the forests, leading to Government-imposed bans on nearly all logging activity in old growth virgin forests and in second growth residual forests.

Production in the agriculture, forestry and fishing sector contracted by 0.3% in 2021, from a previous contraction of 0.2% in 2020. The increased contraction was caused by a contraction in the manufacturing of abaca by 11.1%, compared to a contraction of 1.7% in 2020, as well as a 17.3% contraction in livestock production, compared to a contraction of 6.9% in 2020.

Production in the agriculture, forestry, and fishing sector grew by 0.5% in 2022, compared to a contraction of 0.3% in 2021. Poultry and egg production was the main contributor to the increase with a 6.7% growth in 2022, compared to a contraction of 0.3% in 2021. This was followed by production of abaca with a 6.9% growth and other animal production with a 4.2% growth, compared with contraction of 11.1% and lower growth of 0.9% in 2021, respectively. This was partially offset by a reversal in sugarcane including muscovado-making in the farm at 17.5% in 2022, compared to growth of 8.0% in 2021.

Production in the agriculture, forestry, and fishing sector grew by 1.2% in 2023, compared to a growth of 0.5% in 2022. Tobacco production was the main contributor to the increase with 16.7% growth in 2023, compared to a contraction of 0.7% in 2022. This was followed by mango production with a 10.2% growth and support activities to agriculture, forestry and fishing with a 4.6% growth in 2023, compared with a contraction of 4.2% and a growth of 4.1% in 2022, respectively. This was partially offset by a contraction in the growth of forestry and logging of 18.8% in 2023, compared to a contraction of 0.1% in 2022.

Production in the agriculture, forestry, and fishing sector contracted by 1.5% in 2024, compared to a growth of 1.2% in 2023. Palay production was the main contributor to the decrease with a contraction of 4.8% in 2024, compared to a growth of 1.7% in 2023. This was followed by production of livestock with a contraction of 4.0% in 2024, compared to a growth of 3.0% in 2023. This decline was partially offset by an increase in the growth of poultry and egg production of 6.5% in 2024, compared to an increase of 4.0% in 2023.

Production in the agriculture, forestry, and fishing sector grew by 3.1% in 2025, compared to a contraction of 1.5% in 2024. The main contributors to this growth were sugarcane (including muscovado sugar-making in the farm), poultry and egg production, and palay, which increased by 56.4%, 9.1% and 3.3%, respectively, in 2025, compared to a contraction of 9.4%, a growth of 6.5%, and a contraction of 4.8%, respectively, in 2024. These growths were partially offset by a contraction of 5.6% in mango production in 2025, compared to a contraction of 2.0% in 2024.

 

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Industry Sector

The industry sector consists of the mining and quarrying, manufacturing, construction, and electricity, steam, water and waste management subsectors. The industry sector’s share to GDP in the first quarter of 2026 was approximately 28.7%, compared to approximately 29.9% in 2021.

In 2021, the industry sector grew by 8.5%, from a contraction of 13.1% in 2020 primarily on account of easing restrictions, which allowed more industries to operate at limited capacity. This resulted in a growth of 10.1% in the construction sector, 8.9% growth in manufacturing, 5.1% growth in mining and quarrying, and 4.5% growth in electricity, steam, and waste management, respectively in 2021, versus contractions of 25.5%, 9.8%, 18.6%, and 0.4%, respectively, in 2020.

In 2022, the industry sector grew by 6.5%, compared with growth of 8.5% in 2021. The lower rate of growth was primarily a result of lower growth in the manufacturing subsectors. Manufacturing grew by 4.9% in 2022, compared to a higher growth of 8.9% in 2021. This was partially offset by an increase in construction subsector from growth of 10.1% in 2021 to growth of 12.1% in 2022.

In 2023, the industry sector grew by 3.6%, compared with growth of 6.5% in 2022. The lower rate of growth was primarily a result of lower growth in the manufacturing and mining and quarrying subsectors. Manufacturing grew by 1.3% in 2023, compared to a higher growth of 4.9% in 2022. Mining and quarrying grew by 2.0% in 2023, compared to a higher growth of 5.3% in 2022.

In 2024, the industry sector grew by 5.6%, compared with growth of 3.6% in 2023. The higher rate of growth was primarily a result of higher growth in the manufacturing and electricity, steam, water and waste management subsectors. Manufacturing grew by 3.7% in 2024, compared to a lower growth of 1.3% in 2023. Electricity, steam, water and waste management grew by 7.3% in 2024, compared to a lower growth of 5.8% in 2023.

In 2025, the industry sector grew by 1.7%, compared with growth of 5.6% in 2024. The lower rate of growth was primarily a result of lower growth in the manufacturing, electricity, steam, water and waste management, and construction subsectors. Manufacturing grew by 2.5% in 2025, compared to a higher growth of 3.7% in 2024. Electricity, steam, water and waste management grew by 0.8% in 2025, compared to a higher growth of 7.3% in 2023. Construction grew by 0.1% in 2025, compared to a higher growth of 10.2% in 2024. Their effects are partially offset by mining and quarrying, which grew by 2.4% in 2025, compared to a growth of 1.3% in 2024.

Manufacturing Subsector

The Republic’s manufacturing subsector comprises three major industry groups:

 

•

consumer goods, including the food, footwear and garment industries;

 

•

intermediate goods, including the petroleum, chemical and chemical product industries; and

 

•

capital goods, including the electrical machinery and electronics industries.

In 2021, the manufacturing subsector grew by 8.9%, compared to a contraction of 9.8% in 2020. The largest contributors to the subsector’s growth were 37.9% growth in the manufacture of other non-metallic mineral products in 2021 as compared to a contraction of 24.1% in 2020, 23.5% growth in the manufacture of textiles in 2021 as compared to a contraction of 35.8% in 2020, and 11.1% growth in the manufacture of coke and refined petroleum products in 2021 as compared to a contraction of 48.1% in 2020.

In 2022, the manufacturing subsector grew by 4.9%, compared to growth of 8.9% in 2021. The largest contributor to the subsector’s lower rate of growth was the manufacture of basic metals, which contracted by 3.5% in 2022, compared to a 21.9% growth in 2021. This was partially offset by an increased growth of 4.8% in the manufacture of food products in 2022, compared to a growth of 4.4% in 2021.

 

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In 2023, the manufacturing subsector grew by 1.4%, compared to growth of 4.9% in 2022. The largest contributors to the subsector’s lower rate of growth were the manufacture of machinery and equipment except electrical, the manufacture of wood, bamboo, cane, rattan articles and related products, and the manufacture of textiles, which contracted by 5.6%, 5.8% and 11.8%, respectively, in 2023, compared to growth of 22.9%, 23.7% and 9.9%, respectively, in 2022. These were partially offset by higher growth in the manufacture of coke and refined petroleum products from 0.4% in 2022 to 35.8% in 2023 and a reversal in the manufacture of basic metals from a contraction of 3.5% in 2022 to 4.0% growth in 2023.

In 2024, the manufacturing subsector grew by 3.7%, compared to growth of 1.4% in 2023. The largest contributors to the subsector’s higher rate of growth were 4.4% growth in the manufacture of food products in 2024, as compared to a growth of 2.7% in 2023, 5.7% growth in the manufacture of beverages in 2024, as compared to a growth of 0.2% in 2023, and 6.0% growth in the manufacture of chemical and chemical products in 2024, as compared to a contraction of 0.4% in 2023.

In 2025, the manufacturing subsector grew by 2.5%, compared with growth of 3.7% in 2024. The largest contributors to the subsector’s lower rate of growth was the manufacture of coke and refined petroleum products, the manufacture of chemical and chemical products, and the manufacture of basic metals, which contracted by 8.5%, 9.2% and 33.1%, respectively, in 2025, compared to growth of 8.9%, growth of 5.3% and contraction of 8.0%, respectively, in 2024. These declines were partially offset by higher growth in the manufacture of food products, which expanded by 8.7% in 2025, compared to growth of 4.4% in 2024, and a reversal in the manufacture of textiles from a contraction of 3.8% in 2024 to growth of 7.8% in 2025.

The Electric Power Industry

The Republic’s electric power industry comprises four sectors: generation, transmission, distribution, and supply.

In recent years, the Government has sought to implement measures designed to establish a more competitive power market. These measures include the privatization of the National Power Corporation (“NPC”) owned power generation facilities and Independent Power Producer Contracts (“IPP”), and the grant of a concession to operate transmission facilities. Through the Electric Power Industry Reform Act of 2001 (the “EPIRA”), the Government began to institute major reforms with the goal of fully privatizing all aspects of the power industry. The major aspects of the reforms include the (1) restructuring of the entire power industry to introduce competition in the generation sector, (2) change from government to private ownership, and (3) introduction of a stable regulatory framework for the electricity sector. The EPIRA also created the Power Sector Assets and Liabilities Management Corporation (“PSALM”), which is in the process of privatizing the remaining NPC power generation assets, as many of them have been privatized, and the National Transmission Corporation (“Transco”), which is wholly owned by PSALM and is the owner of the electrical transmission system of the government.

PSALM has been privatizing NPC’s generation assets through public bidding processes since the last quarter of 2003. PSALM successfully privatized the Government’s transmission business in 2009 and its operation and management was turned-over to the winning concessionaire on January 15, 2009.

As of December 31, 2025, total proceeds from privatizing power assets were approximately ₱959.6 billion, of which ₱888.7 billion had been collected. The privatization proceeds have been used and will continue to be used to service PSALM’s financial obligations.

Under the EPIRA, PSALM’s original statutory mandate was set to expire in 2026. In 2025, new legislation extended PSALM’s corporate life for an additional ten years from its original expiration date. Accordingly, PSALM will continue to exist until June 26, 2036, after which all its assets and outstanding debts will revert to and be assumed by the national government. This extension prevents the premature reversion of unresolved

 

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liabilities to the national government and enables PSALM to complete its mandate under EPIRA consistent with prevailing market conditions. Privatization efforts under EPIRA, therefore, remain ongoing. PSALM continues to undertake the sale and disposition of remaining NPC generation assets, real estate holdings, and all other disposable assets, as well as the management of IPP obligations. These activities include the privatization of major power assets such as the Caliraya–Botocan–Kalayaan Hydroelectric Power Plant Complex, which was successfully privatized in December 2025, underscoring continued investor interest and PSALM’s central role in implementing EPIRA’s privatization program.

Service Sector

The service sector includes wholesale and retail trade; repair of motor vehicles and motorcycles; transportation and storage; accommodation and food service activities; information and communication; financial and insurance activities; real estate and ownership of dwellings; professional and business services; public administration and defense; compulsory social activities; education; human health and social work activities; and other services subsectors. The service sector’s share to GDP is the largest at 63.2% in the first quarter of 2026, an increase from 60.5% in 2021.

The service sector grew by 5.4% in 2021, from a contraction of 9.1% in 2020. Notwithstanding the gradual reopening of the economy, growth in wholesale and retail trade; repair of motor vehicles and motorcycles increased to 4.2% from contraction of 6.1% in 2020. Real estate and ownership of dwellings recorded growth of 2.2% in 2021, compared to contraction of 16.7% in 2020, and growth in financial and insurance services declined from growth of 5.6% in 2020 to 4.8% in 2021.

In 2022, the service sector grew by 9.2% compared to growth of 5.4% in 2021. In 2022, growth was recorded across the service sector, with other services at 28.6%, transportation and storage at 24.0%, and accommodation and food service activities at 32.5%, compared to lower growth rates of 2.0%, 6.3% and 7.2%, respectively, in 2021.

In 2023, the service sector grew by 7.1% compared to growth of 9.2% in 2022. In 2023, growth was recorded across the service sector, with growth in accommodation and food services at 23.2%, other services at 20.8%, and transportation and storage at 13.0%, compared to growth rates of 32.5%, 28.6% and 24.0%, respectively, in 2022.

In 2024, the service sector grew by 6.7% compared to growth of 7.1% in 2023. In 2024, growth was recorded across the service sector, with growth in wholesale and retail trade; repair of motor vehicles and motorcycle at 5.6%, financial and insurance activities at 9.0%, real estate and ownership of dwellings at 5.0%, and professional and business services at 7.9%, compared to growth rates of 5.5%, 8.8%, 4.0% and 6.7%, respectively, in 2023.

In 2025, the service sector grew by 5.8% compared to growth of 6.7% in 2024. In 2025, growth was recorded across the service sector, with growth in wholesale and retail trade; repair of motor vehicles and motorcycles at 5.3%, financial and insurance activities at 5.9%, accommodation and food service activities at 5.8%, and professional and business services at 4.9%, compared to growth rates of 5.6%, 8.9%, 10.7% and 7.6%, respectively, in 2024.

The service sector, which accounts for more than 60% of GDP, remains the primary driver of the economy. The Philippine government is actively transforming the service industry through the Philippine Development Plan 2023–2028. Key measures include liberalizing foreign investment, driving digital transformation, modernizing infrastructure, and upgrading workforce skills to shift the sector toward higher-value, globally competitive services. Additionally, in November 2024, the Government enacted the CREATE MORE Act which enhanced fiscal incentives for export-oriented enterprises, including income tax holidays and a reduced 5 percent special corporate income tax rate, to strengthen the country’s competitiveness as a global services hub. See “— The CREATE MORE Act.”

 

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Transport, Storage and Communications Subsector

The geographically diverse nature of the Philippines makes it important to have well developed road, air and sea transportation systems. The Government has encouraged the private sector to provide basic transportation services and strengthen inter-regional and urban links. The Government has expressed its commitment to prioritizing the acceleration of infrastructure development. To this end, the Government continues to invest in key infrastructure through its “Build, Better, More” Program, which supersedes the “Build Build Build” program under the Duterte administration and focuses on both social and physical infrastructure. As of the first quarter of 2026, there were 201 infrastructure flagship projects (“IFPs”) worth approximately US$174.1 billion at various stages of implementation under the “Build, Better, More” Program, with physical connectivity projects—including roads, bridges, rail, airports, maritime, and urban transport—accounting for the largest share, being 133 projects. The IFPs are financed through various sources, including national government allocations, official development assistance, and public-private partnerships. The Philippine road network is the most important transportation system in the nation. Traffic remains congested in the Manila metropolitan area, despite traffic management and various engineering measures. To ease traffic congestion, the Government has built and continues to promote alternative road networks and mass rapid urban-transit-rail.

Use of Philippine rail facilities has declined largely because of the outdated facilities of the Philippine National Railways. To promote the use of rail facilities, the Government approved several public transportation projects, including the Metro Manila Subway Project, a 33.103-kilometer underground rail system in Manila with 17 stations. The Government also continues to develop the North-South Commuter Railway, a 163-kilometer urban rail transit system connecting Central Luzon and Southern Luzon.

Faced with historical shortages of telephone lines and long waits for basic telephone service, especially outside the Manila metropolitan area, the Government liberalized the telecommunications industry in 1993 to intensify competition with the goal of substantially increasing the number of telephone lines and interconnections. The Government has continued to implement programs designed to provide telephone and mobile services to underserved regions of the country. On August 24, 2025, the Konektadong Pinoy Act (Republic Act No. 12234) became effective, introducing an open-access framework for the data transmission sector. The Konektadong Pinoy Act eliminates the requirement for data transmission industry participants to obtain a congressional franchise, replacing it with a streamlined administrative registration process, and promotes infrastructure sharing and fair competition among service providers.

As of October 31, 2021, eight international airports and 79 other facilities throughout the Republic helped meet the Republic’s air transport needs. The Government continues to construct, rehabilitate and upgrade airports to modernize air navigation and communications operations in the Republic, with more regional airports capable of accommodating night flights. In line with the Duterte administration’s “Build Build Build” program, 28 airport projects for construction, rehabilitation or upgrade were listed in the Department of Transportation’s priority agenda. The Marcos administration has stated its intent to build on the “Build Build Build” agenda of the previous administration to improve the country’s railways, roads, and airports in order to spur economic activity and growth.

To this end, the Government continues to invest in key infrastructure through its “Build, Better, More” Program. The “Build, Better, More” Program supersedes the “Build Build Build” program under the Duterte administration and focuses on both social and physical infrastructure. As of December 2024, there were 186 infrastructure flagship projects that are at various stages of implementation under the “Build, Better, More” Program.

Open skies agreements generally allow operating and traffic rights to be granted to foreign air carriers without restrictions on capacity, frequency or type of aircraft. The United States and the Philippines do not have an open skies agreement in place. In February 2016, the Philippines ratified the ASEAN Open Skies agreement with other member nations of the ASEAN bloc. Manila was restricted from participation under the ASEAN Open Skies agreement due infrastructure concerns, including challenges in managing increased air traffic.

 

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In 2017, the International Civil Aviation Organization (“ICAO”) performed safety oversight audits within the framework of its Universal Safety Oversight Audit Programme to determine the Republic’ safety capabilities and the status of implementation of all safety-relevant ICAO Standards and Recommended Practices, associated procedures, guidance material, and best safety practices. In June 2017, the Philippines received approval from the International Civil Aviation Organization, signaling that the country’s aviation sector is compliant with global standards in terms of air safety regulations.

In response to the COVID-19 pandemic, the Government placed restrictions on international flights from and to the Philippines and limited the number of international routes and flights each airline in the Philippines could operate. The Government has adopted a color-coding risk scheme for countries of origin through IATF Resolution No. 144-A to have a more targeted approach to restrictions. Pursuant to Proclamation No. 297 by the President of the Philippines, the state of public health emergency throughout the Philippines has been lifted effective from July 21, 2023.

Net Primary Income

Net primary income is a component of GNI but is not included in GDP. Net primary income is a significant factor in the Philippine economy, largely driven by OFW remittances. Net primary income includes estimates of the amount of compensation of OFWs, as well as investment income of OFWs from their properties. According to the latest figures from the PSA for years 2021, 2022, 2023, 2024 and 2025, net primary income accounted for 3.3%, 5.4%, 9.6%, 11.2% and 12.6% of GNI, respectively.

In 2021, net primary income contracted by 51.6%, compared to a 31.1% contraction the year before, based on constant 2018 market prices. This higher contraction was primarily due to a 48.2% decrease in inflows arising from compensation compared to a 29.3% decrease in 2020, compared to an increase of 18.1% in outflows from compensation in 2020.

In 2022, net primary income grew by 77.3% compared to a 51.6% contraction in 2021, based on constant 2018 market prices. This reversal was primarily due to a decrease of 26.4% in the outflows in investment income in 2022, compared to an increase of 23.8% in the outflow in investment income in 2021.

In 2023, net primary income grew by 96.6% compared to growth of 77.3% in 2022, based on constant 2018 market prices. This increase in growth was primarily due to increased growth in inflows arising from compensation from 47.2% in 2022 to 86.8% in 2023 and increased growth in inflows arising from property income from 42.0% in 2022 to 71.0% in 2023. This was partially offset by a reversal in the outflows arising from compensation, from contraction of 52.9% in 2022 to growth of 170.2% in 2023.

In 2024, net primary income grew by 26.1% compared to growth of 96.6% in 2023, based on constant 2018 market prices. This decrease in rate of growth was primarily due to decreased growth in inflows arising from compensation from 86.8% in 2023 to 23.7% in 2024 and decreased growth in inflows arising from property income from 70.0% in 2023 to 11.8% in 2024. This was partially offset by a decreased growth in outflows arising from property expense from 42.1% in 2023 to 8.2% in 2024.

In 2025, net primary income grew by 19.7% compared to growth of 26.1% in 2024, based on constant 2018 market prices. This decrease in rate of growth was primarily due to decreased growth in inflows arising from compensation from 23.7% in 2024 to 18.2% in 2025 and the reversal of growth of 11.8% in inflows arising from property income in 2024 to contraction of 3.5% in 2025. These changes were partially offset by a greater contraction in outflows arising from compensation from 14.0% in 2024 to 51.7% in 2025, and the reversal of growth of 8.2% in outflows arising from property expense in 2024 to contraction of 0.4% in 2025.

 

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Prices, Employment and Wages

Inflation

The Philippines reports inflation as the annual percentage change in the consumer price index (“CPI”), which measures the average price of a standard “basket” of goods and services used by a typical consumer. The National Statistics Office (“NSO”) conducts a nationwide Family Income and Expenditure Survey every three years. The Family Income and Expenditure Survey 2018 was released in February 2020. In January 2022, the PSA announced that it was rebasing the CPI to base year 2018, and that it would start reporting figures based on the 2018 CPI basket in February 2022. The Government stopped reporting inflation figures based on the 2012 CPI basket in January 2022.

The following table sets out the principal components of the 2018 CPI basket and their weights.

 

Category		2018 CPI Basket
		(%)
Food and non-alcoholic beverages			37.75
Alcoholic beverages and tobacco			2.16
Clothing and footwear			3.14
Housing, water, electricity, gas and other fuels			21.38
Furnishings, household equipment, and routine household maintenance			3.22
Health			2.89
Transport			9.03
Information and communication			3.41
Recreation, sport, and culture			0.96
Education services			1.96
Restaurants and accommodation services			9.62
Financial services			0.03
Personal care and miscellaneous goods and services			4.46

The following table sets out the CPI and inflation rate. Figures are based on the 2018 CPI basket.

 

		Changes in Consumer Price Index
		2021				2022				2023				2024				2025				2026(1)
Consumer price index			108.9				115.3				122.2				126.1				128.2				135.8
Inflation rate			3.9	%			5.8	%			6.0	%			3.2	%			1.7	%			6.8	%

Sources: Bangko Sentral; Philippine Statistics Authority.

Note:

 

(1)	Preliminary data as of May 31, 2026.

Consumer Price Index

The discussion below is based on the 2018 CPI basket.

The average inflation rate for 2021 was 3.9%, higher than the average inflation rate of 2.4% in 2020. The higher rate of inflation in 2021 was due mainly to increases in the rates of inflation for food and non-alcoholic beverages, transport, and housing, water, electricity, gas, and other fuels from 2.9%, 1.5%, and 0.7%, respectively, in 2020 to 4.2%, 9.3%, and 2.5%, respectively, for 2021.

The average inflation rate for 2022 was 5.8%, higher than the average of 3.9% for 2021. The upward trend was due mainly to the higher annual growth rate in the price index for transport at 12.9%, alcoholic beverages

 

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and tobacco at 7.9%, and food and non-alcoholic beverages at 5.9%. The following increases in price indices in 2022 also contributed to the increase in average inflation rate in 2022: housing, water, electricity, gas and other fuels, 6.4%; clothing and footwear, 2.6%; furnishings, household equipment and routine household maintenance, 3.2%; recreation, sport and culture, 2.3%; restaurants and accommodation services, 4.1%; information and communication, 0.6% and personal care and miscellaneous goods and services, 3.0%.

The average inflation rate for 2023 was 6.0%, higher than the average inflation rate of 5.8% for 2022. The higher rate of inflation in 2023 was due mainly to increases in the rates of inflation for food and non-alcoholic beverages and inflation for alcoholic beverages and tobacco from 5.9% and 7.9%, respectively, in 2022 to 7.9% and 10.7%, respectively, for 2023.

The average inflation rate in 2024 was 3.2%, lower than the average inflation rate of 6.0% in 2023. The lower rate of inflation in 2024 was due mainly to decreases in the rates of inflation for food and non-alcoholic beverages from 7.9% in 2023 compared to 4.4% in 2024.

The average inflation rate for 2025 was 1.7%, lower than the average inflation rate of 3.2% for 2024. The lower rate of inflation in 2025 was due to lower inflation in majority of the commodity groups, particularly food and non-alcoholic beverages, clothing and footwear, and restaurants and accommodation services. Average inflation rates for these commodity groups were 1.2%, 1.8% and 2.4%, respectively, in 2025, compared to 4.4%, 3.2% and 4.8%, respectively, in 2024.

The inflation rate as of May 2026 was 6.8%, higher than the inflation rate of 1.3% as of May 2025. The higher rate of inflation in May 2026 was due to higher inflation in almost all the commodity groups, particularly food and non-alcoholic beverages, housing, water, electricity, gas and other fuels, transport, and restaurants and accommodation services. Inflation rates for these commodity groups were 5.7%, 7.8%, 16.2% and 6.7%, respectively, as of May 2026, compared to 0.9%, 2.3%, (2.4)% and 2.0%, respectively, as of May 2025.

Producer Price Index (“PPI”)

In January 2021, the 2018 PPI basket was released. The PSA rebased 2019 and 2020 PPI to base year 2018.

In 2021, the producer price index recorded an average deflation of 1.8%, compared to average deflation of 4.6% in 2020. Manufacture of coke and refined petroleum products posted an average inflation of 5.0% compared to deflation of 21.8% in 2020.

In 2022, the producer price index recorded an average inflation of 6.5%, compared to average deflation of 1.8% in 2021. This was primarily attributable to increases in the price indices for the manufacture of coke and refined petroleum products and the manufacture of chemical and chemical products, which registered an average inflation of 16.7% and 9.0%, respectively. The producer price indices for most other major industry groups likewise increased during this period.

In 2023, the producer price index recorded an average inflation of 1.4%, compared to average inflation of 6.5% in 2022. This was primarily attributable to decreases in the price indices of the manufacture of basic metals and the manufacture of coke and refined petroleum products, which registered an average deflation of 3.8% and 3.7%, respectively. This was partially offset by increases in the price indices of the manufacture of leather and related products, including footwear, and manufacture of beverages, which posted an average inflation of 4.4% and 10.6%, respectively.

In 2024, the producer price index recorded an average deflation of 0.7%, compared to average inflation of 1.4% in 2023. This was primarily attributable to decreases in the price indices of the manufacture of food products and the manufacture of beverages, which registered average inflation of 1.1% and 3.7% in 2024, respectively, as compared to average inflation of 3.0% and 9.4% in 2023, respectively.

 

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In 2025, the producer price index recorded an average inflation of 0.5%, compared to average deflation of 0.7% in 2024. This was primarily attributable to increases in the price indices of manufacture of coke and refined petroleum products, and manufacture of basic metals, which registered average inflation of 4.3% and 1.3%, respectively, in 2025, compared to average deflation of 1.5% and 0.1%, respectively, in 2024.

The producer price index as of April 2026 recorded an inflation of 2.4%, compared to inflation of 0.2% as of April 2025. This was primarily attributable to increases in the price indices of Manufacture of computer, electronic and optical products, manufacture of coke and refined petroleum products, and Manufacture of food products, which registered inflation of 4.3%, 5.3% and 1.4%, respectively, as of April 2026, compared to deflation of 1.4%, inflation of 4.5% and inflation of 0.7%, respectively, as of April 2025.

Employment and Wages

The following table presents selected employment estimates for various sectors of the economy.

 

		Selected Employment Information
		2021(1)				2022(2)				2023(3)				2024(4)				2025(5)				2026(6)
		(all figures in percentages except as indicated)
Employed persons (in thousands)(7)			43,988				46,887				48,178				48,841				49,013				49,069
Unemployment rate(8)			7.8				5.4				4.4				3.8				4.2				5.0
Employment share by sector:
Agriculture, forestry and fishing sector			25.6				24.0				23.2				20.6				20.5				19.1
Industry sector
Mining and quarrying			0.4				0.3				0.4				0.5				0.4				0.7
Manufacturing			8.0				7.7				7.3				7.5				7.1				7.2
Construction			9.1				8.8				9.4				9.9				9.9				9.6
Water supply, sewerage, waste management and remediation activities			0.2				0.1				0.1				0.2				0.1				0.2
Electricity, gas, steam and air conditioning supply			0.1				0.2				0.2				0.2				0.2				0.2
Total industry sector			17.8				17.1				17.5				18.3				17.8				17.9
Service sector
Transportation and storage			6.5				6.7				7.3				7.7				7.7				8.3
Wholesale and retail trade; repair of motor vehicles and motorcycles			21.5				22.3				21.0				20.7				20.5				20.2
Finance and housing(9)			8.2				7.6				7.8				8.0				8.2				7.8
Other services(10)			20.4				22.2				23.2				24.7				25.4				26.8
Total service sector			56.6				58.9				59.3				61.1				61.7				63.0
Total employed			100.0				100.0				100.0				100.0				100.0				100.0

Sources: Philippine Statistics Authority; Annual Labor and Employment Status; Labor Force Survey.

Notes:

 

(1)	Annual estimates were based on the final results of the 2021 Labor Force Survey.

(2)	Annual estimates were based on the final results of the 2022 Labor Force Survey.

(3)	Annual estimates were based on the final results of the 2023 Labor Force Survey.

(4)	Annual estimates were based on the final results of the 2024 Labor Force Survey.

(5)	Annual estimates were based on the preliminary results of the 2025 Labor Force Survey.

(6)	Preliminary results as of March 2026 based on the March 2026 Labor Force Survey.

(7)	Does not include OFWs.

(8)	Annual unemployment rate for 2021, 2022, 2023, 2024 and 2025. Monthly unemployment rate for March 2026.

(9)	Sum of financial and insurance activities, real estate activities and public administration and defense; compulsory social security subsectors.

 

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(10)	Sum of all other service sectors excluding transport and storage, wholesale and retail trade; repair of motor vehicles and motorcycles, finance and housing.

Regional tripartite bodies consisting of representatives of Government, businesses and workers establish minimum wage adjustments, which vary based on region and industry. Under Philippine law, minimum wage adjustments may only be increased once in any 12-month period. However, petitions for a minimum wage increase may be entertained when there is a supervening condition, such as an extraordinary increase in the prices of petroleum products and/or basic goods and services. The minimum wages for workers in Metro Manila and the surrounding areas are the highest in the country. As of May 2026, the minimum wage for non-agricultural workers in the Metro Manila, was ₱695 per day, while for agricultural workers, the minimum wage was ₱658 per day. In other regions of the Republic, the minimum wage for non-agricultural workers ranges from ₱386 to ₱600 per day, while for agricultural workers, the minimum wage ranges from ₱366 to ₱570 per day.

The Government defines unemployment to include all persons at least 15 years old without work who are seeking work and are also immediately available for work (excluding, for example, students seeking work who would not be able to immediately take on new employment). A person may still be considered unemployed despite not seeking work if he/she did not look for work due to any of the following reasons: (a) tired/believe no work is available, (b) awaiting results of previous job application, (c) temporary illness/disability, (d) bad weather, or (e) waiting for rehire/job recall.

In 2021, the total number of employed persons in the Republic, excluding OFWs, was estimated at 44.0 million. The unemployment rate was 7.8% in 2021, lower than the 10.3% unemployment rate recorded in 2020. The rate of labor force participation and the rate of underemployment were 63.3% and 15.9% respectively, representing an increase from 59.5% in 2020, and a decrease from 16.2%, in 2020, respectively. In 2021, workers in the Republic were primarily employed in the service sector, representing 56.6% of the total employed population in the Republic, of which workers in the wholesale and retail trade and repair of motor vehicles and motorcycles made up 21.5% of the total employed. Workers in the agriculture, forestry and fishing sector and the industry sector comprised 25.6% and 17.8%, respectively, of the total employed in 2021.

In 2022, the total number of employed persons in the Republic, excluding OFWs, was estimated at 46.9 million. The unemployment rate was 5.4% in 2022, lower than the 7.8% unemployment rate in 2021. The rate of labor force participation was 64.7% in 2022, higher than 63.3% in 2021. In 2022, workers in the Republic were primarily employed in the service sector, representing 58.9% of the total employed population in the Republic, of which workers in the wholesale and retail trade and repair of motor vehicles and motorcycles comprised 22.3% of the total employed. Workers in the agriculture, forestry and fishing sector and the industry sector comprised 24.0% and 17.1%, respectively, of the total employed in 2022, compared to 25.6% and 17.8%, respectively, of the total employed 2021.

In 2023, the total number of employed persons in the Republic, excluding OFWs, was estimated at 48.2 million. The unemployment rate was 4.4% in 2023, lower than the 5.4% unemployment rate in 2022. The rate of labor force participation was 64.9% in 2023, higher than 64.7% in 2022. In 2023, workers in the Republic were primarily employed in the service sector, representing 59.3% of the total employed population in the Republic, of which workers in the wholesale and retail trade and repair of motor vehicles and motorcycles comprised 21.0% of the total employed. Workers in the agriculture, forestry and fishing sector and the industry sector comprised 23.2% and 17.5%, respectively, of the total employed in 2023, compared to 23.1% and 18.2%, respectively, of the total employed in 2022.

In 2024, the total number of employed persons in the Republic, excluding OFWs, was estimated at 48.8 million. The unemployment rate was 3.8% in 2024 based on preliminary data, lower than the 4.4% unemployment rate in 2023. The rate of labor force participation was 64.4% in 2024, lower than 64.9% in 2023. In 2024, workers in the Republic were primarily employed in the service sector, representing 61.1% of the total employed population in the Republic, of which workers in the wholesale and retail trade and repair of motor

 

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vehicles and motorcycles comprised 20.7% of the total employed. Workers in the agriculture, forestry and fishing sector and the industry sector comprised 20.6 % and 18.3%, respectively, of the total employed in 2024, compared to 23.2% and 17.5%, respectively, of the total employed in 2023.

Based on preliminary data, the total number of employed persons in the Republic, excluding OFWs, was estimated at 49.0 million in 2025. The unemployment rate was 4.2% based on preliminary data, higher than the 3.8% unemployment rate recorded in 2024. The rate of labor force participation was 64.1%, lower than 64.4% in 2024. Based on preliminary 2025 data, workers in the Republic were primarily employed in the service sector, representing 61.7% of the total employed population in the Republic, of which workers in the wholesale and retail trade and repair of motor vehicles and motorcycles comprised 20.5% of the total employed. Workers in the agriculture, forestry and fishing sector and the industry sector comprised 20.5% and 17.8%, respectively, of the total employed, compared to 20.6% and 18.3%, respectively, of the total employed in 2024.

As of March 2026, based on preliminary data, the total number of employed persons in the Republic, excluding OFWs, was estimated at 49.1 million. The unemployment rate was 5.0% as of March 2026 based on preliminary data, higher than the 3.9% unemployment rate as of March 2025. The rate of labor force participation was 63.3% as of March 2026, higher than 62.9% as of March 2025. As of March 2026, workers in the Republic were primarily employed in the service sector, representing 63.0% of the total employed population in the Republic, of which workers in the wholesale and retail trade and repair of motor vehicles and motorcycles comprised 20.2% of the total employed. Workers in the agriculture, forestry and fishing sector and the industry sector comprised 19.1% and 17.9%, respectively, of the total employed as of March 2026, compared to 20.7% and 16.9%, respectively, as of March 2025.

The following tables present employment information in the Republic by gender and by age group:

 

		Percentage Distribution of Population 15 Years Old and over by Employment Status, by Age Group
		March 2025				March 2026
		(Unemployed)
		(all figures in percentages)
Both sexes 15 – 24			33.7				32.1
25 – 34			38.7				38.9
35 – 44			12.1				12.5
45 – 54			10.0				10.2
55 – 64			4.2				5.3
65 and over			1.3				0.9
Total for all ages			100.0				100.0

Sources: Philippine Statistics Authority; March 2026 Labor Force Survey.

 

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		Percentage Distribution of Labor Force by Sex
		March 2025				March 2026
		(all figures in percentages)
Labor Force
Male			58.3				58.5
Female			41.7				41.5
Total			100.0				100.0
Employed
Male			58.4				58.4
Female			41.6				41.6
Total			100.0				100.0
Unemployed
Male			57.9				60.5
Female			42.1				39.5
Total			100.0				100.0

Sources: Philippine Statistics Authority; March 2026 Labor Force Survey.

As of March 2026, 32.1% of the total unemployed population consisted of young people aged 15 to 24 years old, lower than 33.7% recorded as of March 2025. In terms of gender, the female population represented 41.6% and 39.5% of the employed and unemployed workforce, respectively, as of March 2026, whereas the male population represented 58.4% and 60.5% of the employed and unemployed workforce, respectively, as of March 2026.

The PSA publishes statistics on poverty in the Republic measured in terms of a Government-determined per capita poverty threshold, which is the minimum income required for a family or individual to meet basic food and non-food requirements and a per capita subsistence threshold, which is the minimum income required for a family or individual to meet basic food requirements. According to the PSA, the poverty incidence among families was 13.2% in 2021, an increase from 12.1% recorded in 2018. According to NEDA, the effects of the COVID-19 pandemic, including income and employment losses, caused the poverty incidence rate to rise, accompanied by difficulties for poor families caused by restrictions on mobility and low earning capacity. In 2023, the poverty incidence among families was 10.9%, a decrease from 13.2% in 2021.

Overseas Employment

OFW remittances are a significant source of income for the Philippine economy. The Republic accounts for estimates of the amount of compensation of OFWs, as well as investment income of OFWs from their properties as net primary income, and net primary income accounted for 3.3%, 5.4%, 9.6%, 11.2% and 12.6% of GNI in 2021, 2022, 2023, 2024 and 2025, respectively, according to the PSA.

Cash inflows from OFWs increased by 3.3% to $35.6 billion in 2025 as compared to $34.5 billion in 2024, according to preliminary data. According to the PSA’s 2024 Survey on Overseas Filipinos, there were approximately 2.19 million OFWs, approximately 42.8% of which were males and 57.2% of which were females.

 

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The following table presents the geographical distribution of OFWs.

 

		Geographical Distribution of OFWs
		By Place of Work as of 2024(1)				Total Cash Remittances for the nine months ended September 30, 2024(2)				Average Cash Remittance per OFW for the nine months ended September 30, 2024(2)
		(%)				(₱ in millions)				(₱ in thousands)
Africa			1.3				2,963				106
Asia			74.5				133,084				91
East Asia(3)			17.7				—				—
Southeast and South-Central Asia(4)			7.8				—				—
Western Asia(5)			49.0				—				—
Australia			4.4				14,440				178
Europe			10.6				29,425				149
North and South America			9.2				34,395				203
Total			100.0				214,307				111

Source: Philippine Statistics Authority-2023 Survey on Overseas Filipinos.

Notes:

 

(1)	Estimates cover overseas Filipinos whose departure occurred within the last five years ended September 30, 2024 and who were working or had worked abroad during the six months from April 1, 2024 to September 30, 2024.

(2)	Estimates cover remittances during six months prior to survey of overseas Filipinos whose departure occurred within the last five years ended September 30, 2024 and who were working or had worked abroad during the six months from April 1, 2024 to September 30, 2024.

(3)	Includes Hong Kong, Japan, Taiwan, the People’s Republic of China and South Korea, among others.

(4)	Includes Malaysia, Singapore, Brunei, Cambodia and Indonesia, among others.

(5)	Includes Kuwait, Qatar, Saudi Arabia, United Arab Emirates, Bahrain, Israel, Lebanon and Jordan, among others.

The following table presents the occupational distribution of OFWs.

 

		Occupational Distribution of OFWs
		By Occupation as of 2024(1)
		(%)
Managers			2.0
Professionals			8.9
Technicians and associate professionals			6.5
Clerical support workers			3.0
Service and sales workers			12.7
Skilled agricultural forestry and fishery workers			0.7
Craft and related trades workers			7.2
Plant and machine operators and assemblers			15.4
Elementary occupations			43.6
Total			100.0

Source: Philippine Statistics Authority-2024 Survey on Overseas Filipinos.

Note:

 

(1)	Estimates cover overseas Filipinos whose departure occurred within the last five years ended September 30, 2024 and who were working or had worked abroad during the six months from April 1, 2024 to September 30, 2024.

 

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The following table presents the gender and age distribution of OFWs.

 

		Age Distribution of OFWs as of 2024(1)
		Both sexes				Male				Female
		(%)
15 – 24			1.7				1.6				1.9
25 – 29			15.1				13.8				16.1
30 – 34			21.3				18.6				23.3
35 – 39			19.2				16.7				21.0
40 – 44			16.9				18.5				15.7
45 and over			25.8				30.8				22.0
Total for all ages			100.0				100.0				100.0

Source: Philippine Statistics Authority-2023 Survey on Overseas Filipinos.

Note:

 

(1)	Estimates cover overseas Filipinos whose departure occurred within the last five years ended September 30, 2024 and who were working or had worked abroad during the six months from April 1, 2024 to September 30, 2024.

While the COVID-19 pandemic caused a significant drop in OFW deployment, demand for Filipino workers abroad has since gradually recovered.

According to preliminary data from the Department of Migrant Workers, the total deployment of OFWs has increased by 3.5% from 2.30 million in 2023 to 2.38 million in 2024, and further increased by 15.4% to 2.74 million in 2025.

Social Security System and Government Service Insurance System

The Republic does not pay any unemployment compensation or make any general welfare payments other than through the Social Security System and the Government Service Insurance System. The Social Security System provides private sector employees, including self-employed persons and their families, with protection against decreases in income due to disability, sickness, old age and death. Monthly contributions by covered employees and their employers, and investment income of the Social Security System, fund the system. The Social Security System invests its funds in Government securities and in domestic equity securities.

The Government Service Insurance System administers social security benefits for Government employees, including retirement benefits, life insurance, medical care and sickness and disability benefits. It also administers the self-insurance program for Government properties, such as buildings and equipment. The Government Service Insurance System also oversees loan programs, including housing loans for Government employees. Monthly contributions by covered employees and their employers fund the system. Government agencies must include in their annual appropriations the amounts needed to cover their share of the contributions and any additional premium required based on the hazardous nature of the work. The Government Service Insurance System invests its funds in a manner similar to the Social Security System.

 

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National Savings

The following table sets out gross savings and gross domestic savings as a percentage of GDP.

 

		National Savings
Item		2020				2021				2022				2023				2024
		(%)
Gross savings (% of GDP)			24.8				20.2				22.5				27.3				29.2
Gross domestic savings (% of GDP)			9.7				9.2				9.1				9.3				9.4

Source: World Bank national accounts data.

Sustainable Finance Framework

In January 2022, the Republic published its Sustainable Finance Framework (the “Framework”) to support its sustainability commitments. The Framework solidifies its commitment to implementing the United Nations Sustainable Development Goals (“UN SDGs”) set by the United Nations General Assembly in 2015 for the year 2030. The Framework sets out how the Republic intends to raise green, social or sustainability bonds, loans and other debt instruments in the international capital markets. The Republic’s Framework and eligible expenditures portfolio under the Framework are aligned with the four core components of the Green Bond Principles 2021, Social Bond Principles 2021, and Sustainability Bond Guidelines 2021 published by the International Capital Market Association, as well as Green Loan Principles 2021 and Social Loan Principles 2021 published by the Loan Market Association and the ASEAN Green Bond Standards issued by the ASEAN Capital Markets Forum in October 2018.

With any financing raised under the Framework, the Republic intends to contribute to the development of the sustainable financing market domestically in the Philippines. The Framework lays out the process that will be used to ensure transparency and disclosure of the use of proceeds, as well as the expected environmental and social impact of eligible green and social projects, in keeping with international best practices.

Proceeds of financings raised under the Framework will be used to support projects that reflect the Republic’s commitment toward sustainable development and the UN SDGs, in line with the Philippine Development Plan 2017-2022 and Public Investment Program 2017-2022. The issuance of sustainable financing instruments will also support the Republic’s climate change commitments under its National Framework Strategy on Climate Change, including the Republic’s Nationally Determined Contribution in accordance with Decision 1/CP.21 of the Conference of Parties of the United Nations Framework Convention on Climate Change, which has the objective to reduce greenhouse gas emissions by 75% by 2030. Eligible social expenditures, and/or eligible green expenditures under the Framework can include direct or indirect investments, subsidies, support schemes, incentive mechanisms or tax foregone (or a combination of such expenditures) and selected operational expenditures. Such eligible social projects and/or eligible green projects exclude any contributions from other stakeholders.

The Republic has also endeavored to follow the United Nations Environment Programme’s Sustainable Blue Economy Finance Principles in respect of asset categories in relation to a sustainable blue economy. The following are the four core components of these principles (i) Use of Proceeds, (ii) Process for Project Evaluation and Selection, (iii) Management of Proceeds and (iv) Reporting; including a reference to external reviews. Sustainable financing instruments issued under the Framework will be standard recourse-to-the-issuer obligations and investors will not bear the credit risk of the underlying allocated eligible asset exposures. The Republic expects to publish an allocation and impact report for any outstanding sustainable financing instrument issued under the Framework on an annual basis on the Department of Finance and Bureau of Treasury’s publicly available websites.

The Framework has been evaluated by an independent rating and research agency based in France, which has so indicated in a second party opinion (“Opinion”) delivered to the Republic stating that the Framework is

 

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aligned with the International Capital Market Association’s Green Bond Principles and Social Bond Principles (each as adopted in 2021), and the Loan Market Association’s Green Loan Principles and Social Loan Principles (each as adopted in 2021). The Opinion provides opinions on certain environmental and related considerations and is not intended to address any credit, market, or other aspects of an investment in any securities, including without limitation market price, marketability, investor preference, or suitability of any security. The Opinion is a statement of opinion, not a statement of fact. The Opinion is not, nor should be deemed to be, a recommendation by the Republic to buy, sell or hold any securities. No representation or assurance is given by the Republic as to the suitability or reliability of the Opinion or any other opinion or certification of any third party made available in connection with any sustainable financing instrument, including any global bonds, issued by the Republic under the Framework or otherwise, nor is any such opinion or certification a recommendation by the Republic to buy, sell or hold any such securities.

The Framework and the Opinion are available on the Republic’s publicly available website. The contents of any publicly available website referred to herein, the Framework, the Opinion and any practices contemplated under these documents are not incorporated into this annual report, or the terms of the global bonds. They do not establish enforceable contractual obligations of the Republic. These documents speak only as of their respective dates, and are subject to change without notice and the Republic does not assume any responsibility or obligation to update or revise such documents, regardless of whether such documents are affected by the results of new information, future events or otherwise. Although the Framework contemplates certain practices with respect to reporting and use of proceeds, any failure by the Republic to conform to these practices does not constitute or give rise to a breach or an event of default under the global bonds. The Republic does not accept any responsibility for any losses howsoever arising, directly or indirectly, from the Framework, the Opinion or their respective contents. Accordingly, investors are cautioned not to place undue reliance on these documents.

Balance of Payments

Overview

Balance of payments figures measure the relative flow of goods, services, and capital into and out of the country as represented in the current account and the capital and financial account. The current account tracks a country’s trade-in-goods, services, income and current transfer transactions. The capital and financial account includes the capital account, which covers all transactions involving capital transfers and acquisition or disposal of non-produced, non-financial assets, and the financial account, which covers all transactions associated with changes of ownership in the foreign financial assets and liabilities of an economy. A balance of payments surplus indicates a net inflow of foreign currencies, thereby increasing demand for and strengthening the local currency. A balance of payments deficit indicates a net outflow of foreign currencies, thereby decreasing demand for and weakening the local currency.

Revisions

The balance of payments statistics released by the Bangko Sentral are based on the trade-in-goods statistics compiled by the NSO. However, for purposes of inclusion in the overall balance of payments, the trade-in-goods statistics reported by the NSO are adjusted by the Bangko Sentral to exclude temporary exports and imports and returned goods. In March 2013, the Bangko Sentral adopted the IMF’s BPM6 framework covering balance of payments statistics for 2011 onwards, pursuant to which the property income and expense accounts have been revised. Concurrently with the releases of the latest balance of payments data, the Bangko Sentral often releases revisions to the balance of payments data previously reported adjusting for any updated data received from various departments and any change in reporting methodology. The balance of payments data presented below reflects the latest data published by the Bangko Sentral as of the date of this annual report.

 

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The following table sets out the balance of payments of the Republic for the periods indicated.

 

		Balance of Payments
		2021				2022				2023(1)				2024(1)				2025(2)
		($ in millions)
Current account(3)			(5,943	)			(18,261	)			(12,387	)			(18,565	)			(16,291	)
Exports			130,082				143,234				152,172				156,157				166,415
Imports			136,024				161,495				164,559				174,723				182,706
Goods, Services, and Primary Income			(35,444	)			(48,857	)			(43,511	)			(50,252	)			(48,972	)
Total exports			99,630				111,856				119,956				123,281				132,579
Total imports			135,074				160,714				163,467				173,533				181,551
Goods and Services			(38,767	)			(53,806	)			(47,853	)			(54,991	)			(53,424	)
Exports			87,798				98,832				103,588				105,728				114,898
Imports			126,565				152,638				151,441				160,719				168,321
Goods			(52,806	)			(69,701	)			(66,036	)			(68,863	)			(66,670	)
Exports			54,228				57,710				55,257				55,056				63,411
Imports			107,034				127,412				121,292				123,920				130,081
Services			14,039				15,895				18,183				13,872				13,246
Exports			33,570				41,122				48,332				50,671				51,486
Imports			19,531				25,226				30,149				36,799				38,240
Primary Income			3,323				4,949				4,342				4,739				4,451
Receipts			11,832				13,024				16,367				17,553				17,682
Payments			8,509				8,076				12,025				12,814				13,230
Secondary Income			29,501				30,596				31,124				31,687				32,682
Receipts			30,452				31,378				32,217				32,877				33,836
Payments			950				781				1,092				1,190				1,154
Capital account(3)			80				23				74				63				89
Receipts			99				86				88				73				101
Payments			19				62				14				10				13
Financial account(4)			(6,433	)			(13,885	)			(13,606	)			(19,064	)			(10,887	)
Net acquisition of financial assets(5)			10,261				2,533				4,147				4,517				5,839
Net incurrence of liabilities(5)			16,694				16,419				17,753				23,581				16,725
Direct investment			(9,732	)			(5,631	)			(5,400	)			(6,700	)			(6,189	)
Net acquisition of financial assets(5)			2,251				3,861				3,525				2,699				1,602
Net incurrence of liabilities(5)			11,983				9,492				8,925				9,398				7,791
Portfolio investment			10,237				(1,684	)			3,544				(3,528	)			1,297
Net acquisition of financial assets(5)			7,809				(281	)			3,463				960				4,958
Net incurrence of liabilities(5)			(2,428	)			1,402				(81	)			4,488				3,661
Financial derivatives			49				(48	)			(115	)			(271	)			25
Net acquisition of financial assets(5)			(449	)			(632	)			(779	)			(1,023	)			(943	)
Net incurrence of liabilities(5)			(498	)			(584	)			(664	)			(753	)			(968	)
Other investment			(6,987	)			(6,523	)			(11,635	)			(8,566	)			(6,020	)
Net acquisition of financial assets(5)			649				(415	)			(2,062	)			1,881				221
Net incurrence of liabilities(5)			7,636				6,108				9,573				10,447				6,241
Net unclassified items(6)			774				(2,911	)			2,378				47				(346	)
Overall balance of payments position(7)			1,345				(7,263	)			3,672				609				(5,661	)

Sources: Department of Economic Statistics; Bangko Sentral.

Notes:

 

(1)	Revised data.

(2)	Preliminary data.

(3)	Balances in the current and capital accounts are derived by deducting debit entries from credit entries.

 

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