Manila: The Philippines has reached upper-middle income (UMIC) status, the World Bank announced, marking a significant economic milestone for the Southeast Asian nation.
According to Philippines News Agency, the World Bank's latest income assessment revealed that the Philippines' gross national income (GNI) per capita stands at USD4,850, surpassing the threshold of USD4,636 required for UMIC classification. For the current fiscal year, economies are categorized based on GNI per capita using the World Bank Atlas method, with low-income economies at USD1,175 or less, lower middle-income economies between USD1,176 and USD4,635, upper middle-income economies between USD4,636 and USD14,375, and high-income economies with more than USD14,375.
The Philippines joins Jordan, Micronesia, Sri Lanka, and Vietnam in transitioning from a low-middle income to an upper-middle income country. The World Bank highlighted that the Philippines' reclassification was achieved through broad-based expansion, with an average GDP growth of 5.8 percent per year over five years, indicating an economy-wide shift rather than a single sector boom.
In a separate statement, the Department of Economy, Planning, and Development (DEPDev) attributed the country's UMIC status to sustained growth, sound macroeconomic management, and long-term structural reforms. DEPDev Secretary Arsenio Balisacan emphasized the resilience of the Philippine economy amidst global and domestic challenges, noting the relentless pursuit of inclusive growth and strengthened fundamentals.
The new classification is expected to bolster the country's credit profile, enhance investor confidence, and provide access to better financing and higher-quality investments, generating improved job opportunities for Filipinos. While some concessional Official Development Assistance (ODA) might decrease, Balisacan believes that stronger fundamentals and improved market access will outweigh these adjustments.
Balisacan also recognized the vital contribution of overseas Filipino workers (OFWs), whose international earnings contribute to the country's GNI. He expressed a long-term goal of creating more high-quality jobs locally, making overseas employment a choice rather than a necessity.
Despite the positive development, Balisacan acknowledged persistent income disparities and economic challenges, emphasizing the need for inclusive growth that benefits all Filipinos. He reaffirmed the commitment to deepening reforms to sustain economic development and ensure equitable distribution of growth benefits.
