A student at the Thomas Mifflin Elementary School reportedly alerted a teacher that a classmate was flashing money and drugs.
Police say the boy had $170 in cash and a substance believed to be cocaine in his pocket, according to the station.
The child was taken to a hospital for evaluation after the incident and police are now trying to locate the parents.
Philadelphia's K-9 unit reportedly searched the school but no additional drugs were found.
Students were removed from the classroom but the school was not placed on lockdown. An investigation is ongoing.