The Philippines can eliminate poverty and become a predominantly middle-class society by 2040, but only if it acts now through comprehensive reforms that address barriers to job creation and strengthen household resilience, according to a press release issued by the World Bank on June 4, 2026 in Manila. The new report, Building the Filipino Middle Class: Towards Resilient Futures and Poverty Eradication, outlines two possible futures for the country. It identifies job creation, resilience, and public services as the most urgent areas for reform. The findings suggest the country’s Ambisyon Natin 2040 vision is achievable. Strong policy commitment, however, will be required to realize it.
The Philippines has recorded historic gains in recent years. The poverty rate fell to 15.5 percent in 2023 from 23.5 percent in 2015. Income inequality also dropped to its lowest level in four decades, with the Gini coefficient declining below 40 for the first time. Despite this progress, nearly 28 percent of Filipinos remain vulnerable or at risk of falling back into poverty. The secure middle class, at about a quarter of the population, has barely grown since 2018.
The report presents economic modeling for two scenarios. A business-as-usual path would reduce poverty to 6 percent by 2040 and expand the secure middle class to 43 percent. A comprehensive reform scenario, pairing growth and job creation with equity and resilience policies, could lower poverty to 2.9 percent and boost the middle class to 55 percent. With 61 percent of the population at high risk from climate-related disasters, most families have no savings or insurance to fall back on. A single typhoon, hospital bill, or lost job can push them back into poverty.
The report identifies three interconnected reform areas. Only one in three Filipino workers contributes to social security, prompting calls for broader formal employment opportunities and universal early childhood care. The 4Ps program, which reduced poverty by 2.2 percentage points in 2023, should be updated to index benefits to inflation and extend coverage. “With the right policy mix — one that boosts job creation and productivity while strengthening equity and resilience — the Philippines can all but eliminate poverty by 2040 and firmly put most of its people in the secure middle class. The goal is ambitious, but it is achievable with strong commitment to reforms. The World Bank stands ready to support the government of the Philippines in this journey,” said Zafer Mustafaoğlu, World Bank Division Director for the Philippines, Malaysia, and Brunei.
Improving public services is also critical. Local governments spend only about two-thirds of their infrastructure budgets, and the poorest municipalities receive less funding per person than wealthier ones. The report recommends strengthening local capacity and breaking down data silos.
“Progress in the Philippines is real, but many families sit just above the poverty line, and a single shock can push them back,” said Liliana D. Sousa, Senior Economist at the World Bank.
She added that reform must combine faster income growth through better jobs with a resilience framework strong enough to protect the gains already made.
