The closures represent about 15 percent of the city's nearly 250 schools and would save an estimated $28 million a year.
Tens of thousands of students have moved to public charter schools during the last decade, leaving only 146,000 students in district-run schools.
"As an educator and as a parent, I realize that the recommendations will be shocking, painful emotional and disruptive for many communities, not least our students, our families and our staffs," Superintendent William Hite Jr. said Thursday.
But he said they are needed to keep the school system afloat.
"We can't begin to have an enhancement conversation if we have schools that are at 20% utilization," said Dr. Hite.And along with the challenges come opportunities to develop stronger, safer schools that will encourage more families to stay in the district, he said.
Hite envisions schools with math and literacy coaches, new technology programs and - in advance of potentially turbulent school mergers - summer programs in conflict resolution.
Late Thursday, Mayor Michael Nutter endorsed the plan.
"In the end, it will mean safer, better equipped schools capable of meeting the educational needs of the school children of the city of Philadelphia," said Mayor Michael Nutter.
Philadelphia badly lags the national average in reading and math scores, ranking below peer districts such as New York, Houston and Miami. About 61 percent of its students graduate from high school, while only 35 percent get a college degree.
The dwindling enrollment means less state funding, and the district had to borrow $300 million just to pay its bills this year.
The proposed cuts still must be approved by the state-controlled School Reform Commission, which plans to vote in March.
One parents group accused officials of cutting a "back-room deal" without input from the public.
"Private individuals have leveraged money and access to influence which schools (are) ... on the school closings list," Parents United for Public Education said in a statement.
At a news conference, Hite said the district will hold community meetings, and disclose details of the plan, in the months ahead.
No teachers would be laid off under the plan, although administrators and staff jobs would be vulnerable. And savings could come through attrition in a district that loses 1,000 teachers a year, he said.
Hite came to Philadelphia this year from Prince George's County, Md., where he had faced similar financial pressures.
The targeted high schools include Germantown High School, a nearly all-black school set to celebrate its centennial in 2014. Andrea Vare Elementary School in South Philadelphia also is on the list, despite good test scores and an unusually diverse student body. The racial makeup is 33 percent black, 23 percent Latino, 18 percent Asian and 15 percent white, according to Parents United.
"Why would you close that?" said the Rev. LeRoi Simmons, a leader of that group and the Germantown Clergy Initiative. "It's a perfect mix. It looks like the people standing behind (President) Obama."
Simmons complained that he has watched superintendents - and myriad school reform plans - come and go in Philadelphia during the past 30 years, with little classroom success to show for it.
The teachers union shared his sentiment and vowed to fight the latest round of closures. The cost of securing and insuring dozens of abandoned school buildings would rival the projected savings, the union said.
"This course of action has already failed to raise student achievement in the past, it has disrupted the lives of schoolchildren, and it has added blight and dangerous conditions in neighborhoods where these large, vacant buildings are located," the Philadelphia Federation of Teachers said. "Closing neighborhood schools is not only ineffective education policy - in the long term, it's not even sound fiscal policy."
Parents and communities react to closings with protests
Hundreds of people gathered outside the school district headquarters to voice their opposition to the closures.
23 of the 37 schools set to close are elementary schools. That means thousands of 6 to 14-year-olds will be much farther from home every day.
Of those 23 schools on the closure list, 11 are in the North Central part of the city including many in very economically-distressed areas. And that is raising some eyebrows as well.
"That shows that they really don't care about our children in low poverty neighborhood," said parent Dawn Hawkins.
Hawkins and other parents say they are also concerned about issues not addressed in the district's plan so far, such as class size and whether teachers will be following their students to the new schools.
Veronica Joyner of Parents United for Better Schools says that if parents want to keep their neighborhood elementary schools open, they have to be ready to fight the district long and hard.
"I would tell parents to keep making their voices heard, because they are supposed to have input from the parents before making decisions. And if enough parents organize, they will have to save that school," she said.
The School District says they will be holding public hearings for concerned parents and community members.