SME support to lift PH growth prospects

Providing support to high-potential small and medium enterprises (SMEs) could boost economic activity and make the Philippines more resilient, the World Bank said.

"The Philippines can further boost its growth prospects by implementing vital reforms that empower SMEs to flourish," the Washington-based multilateral organization said in its Philippine Economic Update report.

As SMEs account for 63 percent of the country's total employment and contribute 36 percent to gross value added, supporting these small businesses can unlock the potential for increased economic dynamism.

The World Bank has trimmed its forecast for Philippine economic growth to 5.3 percent for this year from 6.1 percent previously. Marginal gains of 5.4 percent and 5.5 percent are expected for 2026 and 2027, but all projections fall below the government's 6.0- to 8.0-percent target.

Many SMEs still have low productivity and face difficulties in growing due to limited access to financing, the World Bank said. As a result, they export less and are less involved in global value chains compared to other SMEs in East Asia and the Pacific.

"Regional and global value chains are more than just sales outlets; they are platforms for creating quality jobs and more value-added through benefits from scale, increased competition, and learning," World Bank senior economist Jaime Frias said.

"Firms that engage with international markets are generally more productive, in part because it takes high productivity to export, but also because exporting makes them more productive," Frias added.

The World Bank said SMEs faced several challenges in growing their exports and joining regional and global supply chains. These include limited access to testing and certification services, lack of financing for equipment and quality upgrades and not enough market information to connect with buyers.

It stressed that improving access to testing and certification services would require investments to make this more affordable.

The World Bank also called for simpler rules for laboratories and importing testing equipment and efforts to gain international recognition for Philippine certifications and standards.

Investing in credit information and collateral registries, it added, can help lenders better assess SME risks. This can lower borrowing costs and allow SMEs to invest in better equipment and improve product quality.

"The government can enhance firms' competitiveness by promoting information sharing, which benefits both SMEs and larger companies," the World Bank said.

"This involves closing information gaps by providing easy access to export market data and establishing systems to connect SMEs with larger firms and multinational corporations."

Source: Manila Times

New ecozones to bring in P3.2 billion in investments

Newly approved economic zones (ecozones) are expected to generate P3.2 billion in investments, according to the Philippine Economic Zone Authority (PEZA).

PEZA Director-General Tereso O. Panga said in a statement on Wednesday that the economic zones, which have an estimated cost of P3.2 billion, are expected to facilitate growth and development in the countryside and attract new locators.

“As a medium-term strategy under the Philippine Development Plan, the ecozones will play a vital role in attracting the much-needed investments in the country, generating more jobs for Filipinos, and contributing to accelerating the nation’s socioeconomic progress,” he said.

“For the first half of the year, President Ferdinand R. Marcos, Jr. approved four ecozones — two expansions of a manufacturing zone in Batangas and two new IT (information technology) parks in Tagbilaran City and Bacolod City,” he added.

The expansion of the Aboitiz-led Lima Technology Center has an estimated project cost of P1.4 billion. This is expected to add 42.72 hectares to the ecozone located in Lipa and Malvar, Batangas.

“These expansions are expected to further amplify Aboitiz InfraCapital’s contributions and better enable PEZA to execute its commitment to sustainable economic progress and national development,” PEZA said.

Megaworld is also developing an IT Park, to be called The Upper East, in Bacolod City. Spanning 33.96 hectares, the project involves the construction of two IT buildings, which have a projected cost of about P1.6 billion.

“Five information technology and business process management (IT-BPM) companies are expected to operate in the park, creating over 2,500 local jobs,” PEZA said.

“The development of this IT park solidifies the position of Bacolod City as an emerging IT-BPM hub in the country and will further create opportunities for innovation and development,” it added.

Meanwhile, Mr. Marcos also issued a proclamation for an IT park, covering about 11,237 square meters, in Tagbilaran.

The Tagbilaran Uptown IT Hub 2 has a projected cost of over P200 million and is expected to attract more IT-BPM locators to Bohol.

“A prospective locator has already expressed interest in investing upwards of P70 million and hiring over 500 Filipinos,” PEZA said.

Under the current administration, a total of 32 ecozones have been proclaimed, which have P13.406 billion in committed investments.

This year, PEZA is targeting the approval and proclamation of at least 30 ecozones, particularly in Central Luzon, Cebu, and Mindanao.

“PEZA is also working to establish the Palawan Mega Ecozone — the first of its kind in the country — and the Pantao Ecozone, eyed as the fifth public ecozone, both targeted for proclamation within the current administration,” PEZA said.

Citing the latest report from the Philippine Statistics Authority, the investment promotion agency said that the majority of the top local government units outside Metro Manila in terms of economic contribution and foreign investment flows are home to ecozones.

“PEZA continues to engage with local governments and developers in advancing ecozone development in the country,” Mr. Panga said.

Source: Business World

PHL jumps to 20th place in Global Gender Gap Index

The Philippines jumped five spots in the 2025 Global Gender Gap Index of the World Economic Forum (WEF) to 20th out of 148 countries and retained its position as the highest-ranking Southeast Asian country.

“Compared to the previous year, the economy has climbed five positions in the ranking, with a 0.2-percentage-point increase in its overall gender parity score,” the WEF said in a report released on Thursday.

The Philippines had a score of 78.1%, well above the average global gender gap score of 68.8% and Eastern Asia and the Pacific average of 69.4%. A parity score of 100 indicates full parity, while the gender gap is the distance from full parity.

The country had the highest ranking among Southeast Asian economies, followed by Singapore (47th), Thailand (66th), Vietnam (74th), Timor-Leste (86th), Laos (96th), Indonesia (97th), Cambodia (106th), Brunei (107th) and Malaysia (108th). Myanmar was not included in the study.

The Philippines remained in third spot in the Eastern Asia and the Pacific region, behind New Zealand (5th) and Australia (13th).

The WEF’s Global Gender Gap Index grades four key dimensions: economic participation and opportunity, educational attainment, health and survival, and political empowerment.

According to the report, the Philippines scored 79% in the economic participation and opportunity subindex this year, the highest in Eastern Asia and the Pacific and 13th globally.

“In 2025, slight improvements in the scores for wage equality and estimated earned income have brought its economic parity score to 79%, the highest in Eastern Asia and the Pacific this year,” it said.

It achieved full parity when it comes to professional and technical workers.

In the educational attainment subindex, the Philippines dropped to 87th spot from last year’s first place, when it achieved full parity.

This subindex includes literacy rate, enrollment rate in primary, secondary, tertiary education.

“Despite strong performances in educational attainment, the gender parity in education has slightly declined. For the first time, the primary school net enrollment rate for boys surpasses that of girls, resulting in a 1.2-percentage-point drop in the education parity score from previous years of full parity,” WEF said.

The report showed the Philippines had gender parity in the literacy rate, as well as enrollment in secondary education and tertiary education.

For political empowerment, the Philippines improved from 30th place from 34th last year.

This subindex includes women in parliament, ministerial positions, years with female or male head of state.

“The Philippines’s political parity score is buoyed by nearly 16 years of female leadership under Presidents Corazon Aquino and Gloria Macapagal-Arroyo. This contributes to a 46.2% score in the head-of-state indicator, the second highest in the region,” the WEF said.

Despite this, progress in female representation in parliament is described as “modest” with a score of 38.9%.

“The score for ministerial positions has declined to 21.1% in 2025, down from over 30% in both 2006-2007 and 2023,” it added.

For the health and survival sub-index, the Philippines rose a notch to 85th spot this year.

“The Philippines has faced growing sex imbalances at birth over the past decade. The sex ratio at birth (females to males) has declined from 0.944 in 2016 to 0.926 in 2025,” the WEF said.

Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said the Philippines’ improved ranking in the gender parity report was mainly driven by gains in wage equality, but noted that the “country still has a long way to go.”

“This is a good indicator of improvements in job opportunities and reduction of gender discrimination,” Mr. Erece said in a Viber message to BusinessWorld on Thursday.

However, he pointed out that female enrollment in primary education remains below 90%. “Thus, improvements in education accessibility and also childhood health are equally important to ensure that students have proper access to education,” he added. 

Mr. Erece also urged the government to improve the quality of education to help reduce dropout rates, especially among female students.

In the report, the WEF said that no economy has yet achieved full gender parity.

Iceland ranked first with a score of 92.6%, keeping the top spot for 16 consecutive years. It is the only economy to have closed more than 90% of its gender gap since 2022.

The rest of the top 10 include Finland, Norway, the United Kingdom, New Zealand, Sweden, Moldova, Namibia, Germany and Ireland.

“Despite decades of progress, efforts to achieve gender parity remain constrained, imposing a hidden but heavy tax on global growth and weakening the foundations of economic resilience — expressed in underutilized talent, lost productivity, slower innovation and frayed social cohesion,” WEF said.

“As the global context evolves, challenges and opportunities emerge for economies that seek to close gender gaps and adopt gender parity as a strategy for growth: expanding women’s participation in the workforce, strengthening leadership pipelines, improving skills-to-work transitions, enhancing policy implementation, and ensuring inclusive outcomes in global trade.”

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Source: Business World