A Strategic Path for Emerging Economies
The OECD released a comprehensive economic survey today, February 12, 2026, highlighting that the Philippines remains one of the fastest-growing economies in Southeast Asia. However, the report emphasizes that sustaining this momentum will require ambitious reforms to strengthen market competition and increase formal employment. Consequently, the organization suggests that addressing these structural issues is essential to ensuring that the benefits of growth are distributed more broadly across the population.
Origins and Macroeconomic Performance
Originally, the Philippine economy demonstrated remarkable resilience by maintaining growth rates well above the regional average throughout 2025. This performance was largely driven by robust domestic demand and a recovery in the services sector. Furthermore, the OECD notes that the country’s strategic position within the Asia-Pacific region has attracted significant foreign direct investment. However, persistent challenges such as high levels of informality in the labor market continue to hinder the country’s full productive potential and its long-term fiscal stability.
Structure of the Competition and Regulatory Framework
The OECD’s recommendations are organized around the necessity of lowering barriers to entry for new firms and enhancing the regulatory environment. Specifically, the report identifies that restrictive regulations in key sectors, such as telecommunications and transport, limit the competitive pressure that drives innovation. Moreover, simplifying the licensing processes and digitalizing administrative procedures are seen as vital steps to reduce the “cost of doing business.” These measures are intended to create a more dynamic private sector capable of competing on a global scale.
Innovation and Labor Market Formalization
In contrast to traditional growth models that rely on low-cost labor, the 2026 roadmap encourages a transition toward high-quality, formal employment. For instance, the survey highlights that a large portion of the Filipino workforce remains in the informal sector, lacking access to social protection and training opportunities. Therefore, the OECD advocates for a comprehensive strategy that includes reducing the non-wage costs of formal hiring and improving the quality of vocational education. This focus on human capital is expected to bridge the productivity gap and foster a more inclusive economic environment.
Synthesis of Long-Term Prosperity and Synergy
The successful implementation of these reforms relies on a synergy between fiscal policy and structural adjustments to maintain macroeconomic stability. This objective is closely linked to the improvement of infrastructure and the acceleration of digital adoption across all levels of government. Simultaneously, there is a clear intent to align national competition policies with international standards to build greater investor confidence. Ultimately, the OECD concludes that by fostering a more competitive and formal economy, the Philippines can secure a stable and prosperous future within the highly integrated APEC region.
Source
OECD. (2026, February 12). Ambitious reforms to strengthen competition and increase formal employment would further boost the Philippines’ growth trajectory. OECD News. https://www.oecd.org/en/about/news/press-releases/2026/02/ambitious-reforms-to-strengthen-competition-and-increase-formal-employment-would-further-boost-the-philippines-growth-trajectory.html