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AFTER ALL THE boasting and rosy projections last year of becoming an upper middle income country (UMIC) by 2025– and with all the geopolitical tension and trade uncertainties in the world, the Philippines, as far as the World Bank is concerned, remains a lower middle income nation.
The Bank’s parameter for stating so is a GNI (gross national income per capita) of $1,136 to $4,495 and the Philippines’ GNI per capita was $26 shy from the lowest WB GNI per capital requirement of $4,496 to $13,935 to become a UMIC. Last year, the GNI per capita requirement for a UMIC was between $4,516 and $14,005.
The Bank’s latest country income classification showed the Philippines posted a record gross national income (GNI) per capita of $4,470. This was higher than its GNI per capita of $4,230 in the previous year, reported Business World.
The World Bank computes a country’s GNI through the Atlas method, which serves as the basis of its income classifications — low, lower middle, upper middle and high. GNI refers to the total amount of money earned by its residents both inside and outside its borders.
MOVERS AND STAYERS
In Southeast Asia, Vietnam overtook the Philippines in terms of GNI per capita with $4,490 but remained a lower middle-income country.
Cambodia ($2,520), Laos ($2,000), and Myanmar ($1,220) are also still classified as lower middle-income countries.
Meanwhile, Malaysia ($11,670), Thailand ($7,120) and Indonesia ($4,910) remained as upper middle-income countries.
Singapore ($74,750) and Brunei ($36,150) are still considered as high-income countries.
Other notable country movements include Costa Rica which is now classified as a high-income country; and Cabo Verde and Samoa, which both moved up to the UMIC category.
The WB updates country classifications by income level on July 1 each year, based on the GNI per capita of the previous calendar year.
Socioeconomic Planning Secretary Arsenio M. Balisacan in April said the country is still on track to meet its target of moving to the upper middle-income category by 2026.
UMIC AFTER 2027
However, World Bank lead economist for Brunei, Malaysia, the Philippines and Thailand Gonzalo J. Varela has said the country’s transition to UMIC status will likely take a bit longer.
“Getting there with an economy that’s growing a little bit slower than we thought about six months ago will take a little bit longer. So, we are thinking that a probable outcome is that it happens around 2027,” Varela told a media briefing last June.
The Bank expects the Philippines to grow by 5.3 percent this year, below the government’s recently revised 5.5 percent to 6.5 percent target.
Analysts said the Philippines is unlikely to move to the UMIC category by 2027.
“I’m doubtful we could. Much work needs to be done to improve our competitiveness ranking to attract more investments,” Ser Percival Pena-Reyes of Ateneo Center for Economic Research and Development Director Ser Percival K. Peña-Reyes told BusinessWorld.
The Philippines inched up a spot to 51st in the 2025 World Competitiveness Yearbook of the International Institute for Management Development. It remained a laggard in the region, ranking 13th out of 14 Asia-Pacific economies in the index.
RAMP UP INFRA, BOOST AGRI GROWTH
John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies– the government’s think tank, said it is possible for the Philippines to become an upper middle-income country by 2027, but this would “require stronger, more inclusive and sustained economic growth.”
Rivera said the government would have to ramp up infrastructure rollout and boost productivity in agriculture and manufacturing.
“Falling short of the UMIC threshold despite a lower benchmark highlights how structural challenges and global headwinds continue to weigh on the Philippines’ income trajectory,” Rivera said.
He also cited slower-than-expected growth, peso depreciation, and inflation pressures as factors that have hurt the country’s per capita GNI.