In recent years, the Philippines has been among the fastest growing economies in the world, with an average annual growth of 6.3% between 2010-2016, up from 4.5% between 2000-2009. Domestic demand and increased infrastructure spending are expected to enable the Philippines to remain a top performer in 2019, with a projected GDP growth of 6.7%. This growth momentum will likely propel the country from lower-middle-income status to upper-middle-income in the medium term.

Nonetheless, the Philippines’ impressive growth has not translated to improved economic mobility. The 40 richest families account for about 76% of the economy while the country’s poverty headcount ratio, defined as the percentage of the population living below the national poverty line, has only declined slightly from 27% in 2006 to 22% in 2016. Disparities between affluent and poor households remain stark in key health indicators including maternal and child mortality and nutrition levels among children.

The Philippines’ social economy is transitioning to the growth stage, driven by collaborative philanthropy and creative approaches to social funding such as pooled corporate social responsibility (CSR) funds. The country has the second largest impact investing market in Southeast Asia in terms of the amount of capital deployed between 2007-2017. Since 2013, the Philippines has committed to taking nationwide actions to promote environmental, social and governance (ESG) compliance among banks. Moreover, the launch of the country’s first green bond in 2017 might provide the impetus to jumpstart the nascent sustainable finance space.

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Philippines’s 2018 Fact File

World Giving Index Rank

2017
54 47 in 2016
  • 20%giving money
  • 36%volunteering time
  • 51%helping a stranger

Population

2017
105 million

GDP (PPP)

2017
USD 875 billion World Rank 28

GDP Growth

2017
6.7%

Per capita GDP (PPP)

2017
USD 8,343 World Rank 119

Number of Millionaires

2018
32,000

Poverty

2015
22%

Global Competitiveness Index

2017-2018
56/137 Global Competitiveness Rank (2016-2017) - 57/138

Ease of Doing Business Rank

2019
124/190 Ease of Doing Business Rank (2018) - 113/190

Source: : ADB, Charities Aid Foundation, Credit Suisse, World Economic Forum, World Bank. Figures are accurate as of March 2019

SDG Dashboard

Low economic mobility, poverty and income inequality, poor health care and nutrition, and environmental degradation are some of the key challenges the Philippines is facing in its development trajectory.

In February 2017, the National Economic and Development Authority Board approved the Philippine Development Plan 2017-2022, the first medium-term plan anchored to the national long-term vision for 2040 or Ambisyon Natin 2040. The Plan aligns the country’s development priorities broadly to the Sustainable Development Goals (SDGs) organised within 5 pillars: (i) enhancing the social fabric, (ii) inequality-reducing transformation, (iii) increasing growth potential, (iv) enabling and supportive economic development and (v) foundations for
sustainable development. By 2022, the plan aims to achieve:

  • An upper-middle-income status,
  • Rural poverty rate of 20%,
  • High level of human development,
  • Unemployment rate of 3% to 5%,
  • Greater trust in the government and the society,
  • Greater resilience and drive for innovation.
  • No Poverty
  • Zero Hunger
  • Good Health and Well-Being
  • Quality Education
  • Gender Equality
  • Clean Water and Sanitation
  • Affordable and Clean Energy
  • Decent Work and Economic Growth
  • Industry, Innovation and Infrastructure
  • Reduced Inequalities
  • Sustainable Cities and Communities
  • Responsible Consumption and Production
  • Climate Action
  • Life Below Water
  • Life On Land
  • Peace, Justice and Strong Institutions
  • Partnerships for the Goals

Source: sdgindex.org (2018)

Note: The "traffic light" colour scheme (green,yellow, orange, red) illustrates how far a market is from achieving a particular goal

Government Initiatives to Address Development Gaps

Impact Area SDG Goals Gap Government Initiatives
Agriculture
SDG Goals
  • No Poverty
  • Zero Hunger
  • Decent Work and Economic Growth
Gap
  • 26% of the total workforce were employed in agriculture but the sector contributed less than 10% of GDP in 2017.
  • The Philippines’ crop production index steadily declined from 119 in 2012 to 110 in 2017, impacting the country’s food security.
Government Initiatives
  • The Philippine Development Plan seeks to substantially increase the gross value add of agriculture, fisheries and forestry from the baseline value of 1% to 2.5%-3.5% between 2017-2022. Strategies supporting this target include improving agricultural productivity and the capacity of agricultural enterprises.
Climate action
SDG Goals
  • Climate Action
  • Life Below Water
  • Life On Land
Gap
  • The 2018 World Risk Index ranked the Philippines the third most vulnerable country in the world with a high risk of tropical cyclones.
  • Climate change will cause crop yields to decrease by 25% according to the Food and Agriculture Organisation (FAO).
Government Initiatives
  • The National Climate Change Action Plan 2011-2028 outlines 7 key priorities: food security, water sufficiency, environmental and ecological stability, human security, climate-friendly industries and services, sustainable energy and knowledge and capacity development. The Philippines has committed to reducing carbon emissions by 70% by 2030.
Education and employability
SDG Goals
  • Quality Education
  • Decent Work and Economic Growth
Gap
  • The Philippines slipped from 49th place in 2016 to 50th in 2017 in the World Economic Forum’s Human Capital ranking due to challenges in skills application and accumulation through work.
Government Initiatives
  • The Philippine government focuses on improving access and quality of the “K to 12” programme, which covers kindergarten and 12 years of basic education. It is also working to ensure that higher and technical education keeps up with the changing employment landscape.
Energy access
SDG Goals
  • Affordable and Clean Energy
Gap
  • Almost 10% of the Philippines’ population does not have access to electricity.
  • The country has the second highest electricity costs in Southeast Asia.
  • Total energy consumption is projected to increase at an average rate of 4% annually.
Government Initiatives
  • The Philippine Energy Plan 2017-2040 aims to ensure 100% access to energy, increase renewable energy capacity to at least 20,000 megawatts, establish an investment-driven natural gas industry and promote energy efficiency.
Health care
SDG Goals
  • Good Health and Well-Being
Gap
  • 1 in 3 children under 5 years of age are malnourished. The prevalence of stunting increased to 33% in 2017 from 30% in 2013.
  • The Philippines has high rates of maternal and infant mortality, especially in rural areas.
Government Initiatives
  • The Philippine Health Agenda 2016-2022 aims to combat communicable and non-communicable diseases, malnutrition and industrialisation-related diseases. The government is also committed to improving health care service delivery and reducing inequality in access to health care.
MSME development
SDG Goals
  • Decent Work and Economic Growth
  • Sustainable Cities and Communities
Gap
  • MSMEs account for 99.6% of all enterprises but only 25% of the country’s exports.
  • MSMEs’ financing gap is estimated at about USD 2 billion.
Government Initiatives
  • The Magna Carta for MSMEs mandates banks to allocate 8% of their loan portfolio to micro and small enterprises, and 2% to medium-sized enterprises.
Poverty alleviation
SDG Goals
  • No Poverty
Gap
  • The country’s poverty headcount ratio has declined only slightly from 27% in 2006 to 22% in 2016.
Government Initiatives
  • The Philippine Development Plan 2017-2022 aims to reduce the national poverty headcount ratio to 13%-15% by 2022. Key policy measures include creating more and better jobs, improving productivity, equipping the workforce with 21st century skills, and investment in health and nutrition.
Water and sanitation
SDG Goals
  • Clean Water and Sanitation
Gap
  • About 9% of the population does not have access to clean water and 18% lacks access to improved sanitation.
Government Initiatives
  • The Philippines aims to achieve universal and equitable access to safe and affordable drinking water an adequate sanitation for all by 2030. It is also focusing on improving water quality.

Social Economy

The Philippines’ social economy is transitioning to the growth stage, driven by collaborative philanthropy and creative approaches to social funding such as pooled CSR funds

Category Factor Rating Description
SPOs
Factor
Presence, size, and maturity of SEs
three-quarter
  • There are about 60,000 non-profit organisations and 30,000 SEs in the Philippines, which include revenue-generating non profits, cooperatives, associations and microfinance institutions. Some SEs have achieved national scale.
SPOs
Factor
SEs' sectoral presence
three-quarter
  • SEs are present in a range of sectors including financial services, education, health, agriculture, employability, environment and water and sanitation.
Investors
Factor
Philanthropic contributions
three-quarter
  • Institutional philanthropy is well established with the active presence of both public and private foundations.
  • Community foundations are drivers of local philanthropy while family foundations have moved towards collaborative philanthropy.
Investors
Factor
Managed funds
three-quarter
  • The Philippines has the second largest impact investing market in Southeast Asia.
  • A number of notable international impact funds operate in the country, including Accion, Leapfrog Investments, LGT Impact, Omidyar Network, Oikocredit, Patamar, responsAbility, SEAF and Unitus.
  • Foundations such as FSSI, FPE, PEF, PhilDev provide patient capital in the forms of grants, debt and equity as well as non-financial support to build up SEs’ capacity.
Investors
Factor
Corporate sector
full
  • Collective impact through pooled CSR funds, corporate impact venturing and inclusive business are some of the advanced approaches adopted by companies in the Philippines to maximise social impact.
Enablers and Intermediaries
Factor
Policy environment
half
  • SEs may be registered under existing for-profit and non-profit legal structures.
  • The Philippine government has taken initial steps to support SPOs with the IB accreditation framework as well as the proposed PRESENT Bill and Social Value Act.
Enablers and Intermediaries
Factor
Incubators, accelerators, and capacity-builders
three-quarter
  • Xchange, FSSI, FPE, PEF, PhilDev, GKonomics (an initiative by GK), EDMEnterprise, Social Enterprise Development Partnerships, Inc. (SEDPI) are some of the most active social incubators, accelerators and capacity builders.
Enablers and Intermediaries
Factor
Networks and platforms
three-quarter
  • AVPN, British Council, the Philippine Social Enterprise Network (PhilSEN), GK, PSBP, Ateneo de Manila University manage networks and platforms that bring together diverse social economy stakeholders in the country.
Enablers and Intermediaries
Factor
Knowledge and research
three-quarter
  • The Philippines has a relatively well-documented social economy. Various research papers and reports have been published by the British Council, the Lien Centre for Social Innovation, UBS and INSEAD, AVPN, GIIN and Indiana University – Lilly Family School of Philanthropy and the Institute for Social Entrepreneurship in Asia (ISEA).
  • Ateneo de Manila University and Xavier University offer social entrepreneurship programmes.
Enablers and Intermediaries
Factor
Partnerships
full
  • Collaborations for impact are present in various stakeholder groups in the social economy including public foundations, family foundations and corporates.
  • Collective impact and pooled funds are some of the innovative partnership approaches seen in the country.

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Demand & Supply of Capital in Philippines

Note: Data is based on AVPN's analysis. If there are any inconsistencies or errors in the information listed, please let us know at knowledge@avpn.asia

Case Studies in Philippines

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by LGT Venture Philanthropy

How an impact investor and inclusive business made systemic improvements in the Philippines’s agribusiness sector Local context and background on partnership The agricultural sector in the Philippines contributes to 9.7% of the country’s GDP as of 2017. Farmers suffer from high poverty levels with many lacking capital for high-quality seeds and fertilizers, and unable to […]

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Social Investment Landscape in Asia

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