Manila: The Philippines is on track to achieve the upper-middle income (UMIC) status by the end of 2025 or in 2026, according to Finance Secretary Ralph Recto. Recto expressed confidence in a text message, stating, "Yes we expect to achieve UMIC status by the end of this year or next year."
According to Philippines News Agency, data recently released by the World Bank showed that the Philippines is currently at the lower-middle income (LMIC) status, with the gross national income (GNI) per capita reaching USD4,470 last year. The GNI per capita measures the economic output per citizen, encompassing both domestic and international earnings. A higher GNI per capita indicates greater economic prosperity and a higher standard of living. The GNI per capita last year exceeded the lower end of the USD4,454 to USD4,592 target under the Philippine Development Plan 2023 to 2028.
To achieve the UMIC status, World Bank data revealed that the Philippines must attain a GNI per capita of USD4,496 to USD13,935. Recto highlighted the government's focus on an expansionary budget to support growth, employment, and poverty reduction, with investments in both human capital and infrastructure. The budget for this year amounted to PHP6.326 trillion. The Development Budget Coordination Committee, led by Department of Budget and Management Secretary Amenah Pangandaman, approved the proposed 2026 National Budget at PHP6.793 trillion, equivalent to 22 percent of the gross domestic product.
Recto also emphasized efforts to ensure inflation remains within target and plans to reduce interest rates to support investments and consumption. Economists believe the Philippines has a good chance to attain the UMIC status before President Ferdinand R. Marcos Jr.'s term ends. John Paolo Rivera, a senior research fellow at the Philippine Institute of Development Studies, noted that sustaining strong economic growth above 6 percent, controlling inflation, and maintaining a stable exchange rate are crucial to meeting the required per capita income threshold.
Rizal Commercial Banking Corporation's chief economist, Michael Ricafort, also expressed optimism that the country could achieve the UMIC status by 2026 or 2027, provided economic growth remains one of the fastest in Asia and consumer-driven growth is resilient despite external risk factors.
