The Philippines is now an upper-middle income country, the World Bank confirmed this week, ending decades in the tier below and placing the country among economies with far larger per-person earnings.
The lender’s July income assessment pegged the Philippines’ gross national income per capita at USD4,850, clearing the USD4,636 mark that separates lower-middle from upper-middle economies. That figure jumped from USD4,470 a year earlier, an 8.5 percent rise in a single year.
Under the World Bank’s Atlas method, economies fall into four tiers for the current fiscal year: below USD1,175 per capita counts as low income; USD1,176 to USD4,635 as lower-middle; USD4,636 to USD14,375 as upper-middle; and anything above USD14,375 as high income. The Philippines had sat in the lower-middle band for decades before crossing over.
The Department of Economy, Planning, and Development credited three things for the shift: steady growth, disciplined macroeconomic policy, and structural reforms built up over years. The World Bank framed the gains as spread across the economy rather than concentrated. “The Philippines achieved its reclassification through broad-based expansion. GDP (gross domestic product) grew at an average of 5.8 percent per year over five years, reflecting gains across all major industries, not a single sector boom, but an economy-wide shift,” it said in an accompanying blog.
Four other economies made the same jump this cycle: Jordan, Micronesia, Sri Lanka and Vietnam.
Economy Secretary Arsenio Balisacan said the upgrade validated the country’s direction. “This confirms the resilience of the Philippine economy,” he said. “Despite global and domestic shocks, we have relentlessly pursued inclusive growth, strengthened fundamentals, and remained on track with our development agenda.”
Balisacan expects the reclassification to lift the country’s credit standing, draw more investor interest, and widen access to financing that produces better jobs. He conceded that some concessional Official Development Assistance may thin out as a result, but argued the trade-off favors the country, with stronger fundamentals and improved market access outweighing what is lost.
He also pointed to the role of Filipinos working abroad, whose remittances count toward the country’s GNI. “Our OFWs have played an important role in reaching this milestone,” he said. “At the same time, our long-term goal is to create more high-quality jobs at home so overseas employment becomes a choice, not a necessity.”
The secretary was careful to separate the label from lived reality. “We acknowledge that income disparities persist, and many continue to face economic difficulties. Our priority is to ensure that growth becomes more inclusive, and that its benefits reach all Filipinos,” Balisacan said.
“We welcome this recognition of our progress and we commit to deepen reforms to sustain our economic development,” he said.
