Philippines Development Policy Loan to Foster More Inclusive Growth

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This program document describes a single-tranche development policy loan (DPL) to the Republic of the Philippines for US$250 million. It is being proposed as the first of a programmatic series of three DPLs to support the Philippines' efforts to foster more inclusive growth by consolidating fiscal discipline, improving competitiveness, strengthening governance and promoting human capital accumulation. The need for more inclusive growth was made evident over the last decade, when the Philippines experienced a resurgence of economic growth that did not, however, translate into greater progress in poverty reduction. Recent analytical work suggests that an important obstacle to poverty reduction in these circumstances has been the country's high degrees of inequality in the distribution of income and in the access to public social services. At the same time, shortcomings in the provision of public infrastructure and social services undermine the sustainability of growth and the Government's ability to reduce inequality.