The Philippines and the World Bank

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The Philippines' history with the World Bank started in 1945 when they became one of the first members of the International Bank for Reconstruction and Development (IBRD). [1] Their first project with the Bank came in 1957 with the Binga Power Project. [2] Since then, the Philippines has received $2.14 billion of disbursed loans from the IBRD. [3] The Philippines is in the constituency entitled EDS 15, comprising Brazil, Colombia, Dominican Republic, Ecuador, Haiti, Panama, Suriname, and Trinidad and Tobago, and headed by Executive Director Fabio Kanczuk. [4]

Contents

Economic overview of the Philippines

According to World Bank data, the Philippines is considered to be a "lower middle income" country, [5] defined as countries that have a per capita GNI between $1,026 and $3,995. [6] As of 2018, by gross domestic product Purchasing Power Parity (GDP PPP), the Philippines is ranked 27th in the world with a GDP PPP of 952,967 international dollars. [7] In the same year, by nominal gross domestic product (GDP), the Philippines is ranked 38th in the world with a GDP of $330,910 (US dollars). [8] The economy relies mostly on the service sector (59.8% in 2017), with smaller percentages in industry (30.6% in 2017) and agriculture (9.6% in 2017). [9]

The Philippines has remained generally unsusceptible to global economic shocks. [10] This is because of less exposure to problematic international securities, lower export dependence, stable domestic consumption, large remittances from overseas Filipinos, and a quickly growing service industry. [11] Economic growth has been positive and stable, averaging 6.3% between 2010 and 2018 and 4.5% between 2000 and 2009. [12] Additionally, the country is expected to become an upper-middle country in the near future, as its per capita income of $3,660 USD is just below the minimum bound of $3,896 USD. [13]

History of the World Bank in the Philippines

Overview

After becoming one of the members of the IBRD in 1945, the Philippines became a member of the International Development Association (IDA) in 1960. [14] Two years later, the International Finance Committee (IFC) established the Private Development Corporation of the Philippines to help spur extensive private investment. [15] By 1994, the Philippines became a member of the Multilateral Investment Guarantee Agency (MIGA). [16] From 2015 to 2018, the Philippines and the World Bank engaged in the Country Partnership Strategy to create better jobs, increase shared prosperity, and eradicate extreme poverty. [17]

The World Bank works with the Local Government Finance and Development Project (LOGOFIND) that assists in the development of infrastructure and public services as it is to promote a development in employment, lifestyle, and reducing poverty. [18] [ non-primary source needed ] In 1979, the World Bank launched 'programme loan' in which the World Bank tested their involvement in giving assistance to corporate allies and transnational corporations while without forcing any autonomous policies in which these loan only divert their attention it specific sectors of the Filipino economy such as agriculture and finance. [19]

Notable projects

Roughly half of World Bank projects in the Philippines have centered around rural infrastructure, private sector infrastructure, climate change, and civic engagement. [20] The Binga Power Project in 1957 marked the first World Bank Project in the Philippines. The project helped satisfy demand for electricity on the island of Luzon by providing four 25 MW generators, a rock filled dam that stores a reservoir, a 90 meter wide spillway that handles flood water, an underground powerhouse with surge chambers, and a pressure tunnel to deal with water flow. [21] In 1966, the World Bank/IBRD committed $25 million for the Private Development Corporation of the Philippines Project 2, which provided loans to stimulate productive private enterprises. [22] The Magat River Multipurpose Project in 1978 was the most expensive project of the 1970s at $150 million and provided a dam, tunnels, and reservoir resettlement. [23] After continued development throughout the 20th century and into the 21st century, the Philippines suffered a setback in 2013 when Typhoon Haiyan struck. The World Bank stepped in and contributed $500 million for recovery efforts. [24] In line with its history of attempting to reduce poverty, the Philippines most recently accepting a $300 million loan for the Pantawid Pamilyang Pilipino Program, a conditional cash transfer program. [25]

The World Bank's other projects is their commitment for civil engagement such as children development, migration, and employment. [26] The Department of Social Welfare and Development and the Department of Education, Culture, and Sports has had their objective to promote the mental health and stability from children by covering around 2.7 million children in three regions costing $51 million for the research and service delivery cost. [27] The Department of Labor and Employment are licensed to assist oversea workers as migrant management is an issue for the Philippines as around 8.2 million Filipinos are abroad with around 75,000 Filipinos in deployed oversea labor monthly in which programs have been funded $200 million that supports pre-departure orientation and public services. [28] The Philippines have low-paid jobs that projects from 2010 focuses on the improvement of the accessibility of the labor market, fixing minimum wage, and making job programs cost-effective. [29]

In 2021, Fisheries and Coastal Resiliency Project gives funds around $3 million for the Department of Agriculture–Bureau of Fisheries and Aquatic Resources to help the fishing industry improve in its management of its resources and to enhance production and gain access from Government Financial Institutions. [30] It will also improve conditions of the fisherman, aquaculture farmers, and fishery-based enterprises by assisting them in marketing their products such as using digital marketing. [31] The Environmental and Social Management are to monitor this project to prevent any harm to the ecosystem of the aquatic life and to ensure the positive livelihood and improvement for these farmers. [32] [ non-primary sources needed ]

Effects and controversy

In the 21st century, World Bank intervention in the Philippines has improved social and living conditions. The Philippine Rural Development Project of 2015 raised rural incomes, increased agricultural productivity, and improved market access in rural areas. [33] The effects go beyond rural infrastructure. From an educational perspective, the Learning, Equity, and Accountability Program Support (LEAPS) benefitted 4.4 million students and recorded improvements in the reading and math scores of students in Grades 2 and 3. [34]

World Bank intervention in the Philippines has also been met with controversy. The World Bank has been criticized by the Committee for the Abolition of Illegitimate Debt for its role in funding the regime of Ferdinand Marcos. Structural adjustment loans given to the Philippines mostly ended up in the hands of the Marcos administration instead of being used to fund export-driven industrialization, with the corruption fueling a banking crisis that discouraged foreign private investors from investing in the Philippines. [35]

As countries continue to develop from the assistance of the World Bank, many new International Financial Institutions were developed. In 1966, the Asian Development Bank was established with the goals of eradicating extreme poverty and promote development in the region of Asian and the Pacific similar to the goals aimed from the World Bank. [36] This is an effect of countries within a region developing further to create their own institutions to reduce influence from other institutions. The criticism the World Bank deals with also leads new global institutions to be made. The Asian Development Bank created the 2009 Philippine Energy Efficiency Project to help the citizen reduce their energy household cost as it took a large portion of their income to the electricity tariffs. This project would cost $46 million to establish 13 million compacted fluorescent lights and having energy-efficient lights in government offices and other public building. [37] [ non-primary sources needed ]

Future

Economic growth in 2020 and 2021 is forecasted to shrink to 6.1% and 6.2% (from 6.5% in both years), respectively, due to a slowdown in public investment and the current China–United States trade war. [38] Additionally, the Philippines and the World Bank have set goals for the Philippines by 2040. By that time, the Philippines wants to be free from poverty and sustain a prosperous middle class. [39] In order to do so, the World Bank estimates that income per capita must triple by way of having its economy grow at an average annual rate of 6.5%. [40] In order to reach and maintain this level of growth, the World Bank recommends that the Philippines improves market competition via reforms in regulation, simplifies regulations for trade, and reduces labor market costs and barriers. [41]

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References

  1. ↑ "The Philippines and the World Bank: Adapting to Challenges through the Years".
  2. ↑ "Binga Power Project". World Bank. Retrieved 2019-12-01.
  3. ↑ "Philippines | Data". data.worldbank.org. Retrieved 2019-12-01.
  4. ↑ "EDS15 Home". www.worldbank.org. Retrieved 2019-12-01.
  5. ↑ . "GDP, PPP (current international $)".
  6. ↑ "World Bank Country and Lending Groups – World Bank Data Help Desk". datahelpdesk.worldbank.org. Retrieved 2019-12-11.
  7. ↑ "Gross domestic product 2018, PPP" (PDF).
  8. ↑ "Gross domestic product 2018" (PDF).
  9. ↑ "Economy :: Philippines, GDP - composition, by sector". 14 April 2023.
  10. ↑ "Economy :: Philippines, Economy - overview". CIA World Factbook. 14 April 2023.
  11. ↑ "Economy :: Philippines, Economy - overview". 14 April 2023.
  12. ↑ "The World Bank in the Philippines". World Bank.
  13. ↑ "The World Bank in the Philippines".
  14. ↑ "The Philippines and the World Bank: Adapting to Challenges through the Years". www5.worldbank.org. Retrieved 2019-12-03.
  15. ↑ "The Philippines and the World Bank: Adapting to Challenges through the Years". www5.worldbank.org. Retrieved 2019-12-03.
  16. ↑ "The Philippines and the World Bank: Adapting to Challenges through the Years". www5.worldbank.org. Retrieved 2019-12-03.
  17. ↑ "The Philippines and the World Bank: Adapting to Challenges through the Years". www5.worldbank.org. Retrieved 2019-12-03.
  18. ↑ "Through Thick and Thin: Philippines - World Bank Partnership Since 1945". World Bank.
  19. ↑ Broad, Robin (1981). "New Directions at World Bank: Philippines as Guinea Pig". Economic and Political Weekly. 16 (47): 1919–1922. ISSN   0012-9976.
  20. ↑ "Projects". World Bank. Retrieved 2019-12-03.
  21. ↑ "Binga Power Project".
  22. ↑ "Private Development Corporation of the Philippines Project (02)". World Bank. Retrieved 2019-12-03.
  23. ↑ "Magat River Multipurpose Project (02)". World Bank. Retrieved 2019-12-03.
  24. ↑ "Post Typhoon Recovery Loan". World Bank. Retrieved 2019-12-03.
  25. ↑ "Philippines gets US$300mil loan from World Bank to fight poverty". The Star Online. 2019-11-28. Retrieved 2019-12-11.
  26. ↑ "Projects". World Bank.
  27. ↑ Balachander, Jayshree (January 1999). "World Bank Support for Early Childhood Development: Case Studies from Kenya, India, and the Philippines". Food and Nutrition Bulletin. 20 (1): 136–145. doi: 10.1177/156482659902000112 . ISSN   0379-5721.
  28. ↑ Ruiz, Neil G. (August 2008). "Managing Migration : Lessons from the Philippines". World Bank Publications - Reports.
  29. ↑ Rutkowski, Jan (December 2015). "Employment and Poverty in the Philippines" (PDF). Philippine Social Protection Note – via World Bank.
  30. ↑ Agency, Borrowing. "Environmental and Social Management Framework (ESMF) Fisheries and Coastal Resiliency Project (P174137)". World Bank.
  31. ↑ Agency, Borrowing. "Environmental and Social Management Framework (ESMF) Fisheries and Coastal Resiliency Project (P174137)". World Bank.
  32. ↑ Agency, Borrowing. "Environmental and Social Management Framework (ESMF) Fisheries and Coastal Resiliency Project (P174137)". World Bank.
  33. ↑ "Overview". World Bank. Retrieved 2019-12-03.
  34. ↑ "Overview". World Bank. Retrieved 2019-12-03.
  35. ↑ "The World Bank and the Philippines". www.cadtm.org. Retrieved 2019-12-11.
  36. ↑ "About ADB". Asian Development Bank. 7 July 2022.
  37. ↑ Department, ADB Independent Evaluation (7 December 2015). "Philippines: Philippine Energy Efficiency Project". ADB Independent Evaluation Department.{{cite journal}}: Cite journal requires |journal= (help)
  38. ↑ "World Bank trims 2019-2021 growth outlook for Philippines". Reuters. 2019-10-10. Retrieved 2019-12-11.
  39. ↑ "Growth and Productivity in the Philippines: Winning the Future". World Bank. Retrieved 2019-12-03.
  40. ↑ "Growth and Productivity in the Philippines: Winning the Future". World Bank. Retrieved 2019-12-03.
  41. ↑ "Growth and Productivity in the Philippines: Winning the Future". World Bank. Retrieved 2019-12-03.


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