THE PHILIPPINES remains to be classified as a lower middle-income country after just missing the edge to attain upper middle-income country (UMIC) status, in keeping with the World Bank.
The World 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 within the previous 12 months.
Despite the rise in GNI per capita, the Philippines stays classified by the World Bank as a lower middle-income country — one with a GNI per capita of $1,136 to $4,495.
The Philippines’ GNI per capita was only $26 shy of the World Bank’s lower GNI per capita requirement of $4,496-$13,935 to turn into a UMIC. Last 12 months, the GNI per capita requirement for a UMIC was between $4,516 and $14,005.
The World Bank computes a rustic’s GNI through the Atlas method, which serves as the premise of its income classifications — low, lower middle, upper middle and high. GNI refers to the overall amount of cash earned by its residents each inside and outdoors its borders.
In Southeast Asia, Vietnam overtook the Philippines by way 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 regarded 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 each moved as much as the UMIC category.
The World Bank updates country classifications by income level on July 1 yearly, based on the GNI per capita of the previous calendar 12 months.
Department of Economy, Planning, and Development Secretary Arsenio M. Balisacan in April said the country remains to be on the right track to fulfill its goal of moving to the upper middle-income category by 2026.
Nonetheless, 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 bit bit slower than we thought of six months ago will take a bit bit longer. So, we’re considering that a probable consequence is that it happens around 2027,” Mr. Varela said at a briefing on June 19.
The World Bank expects the Philippines to grow by 5.3% this 12 months, below the federal government’s recently revised 5.5% to six.5% goal.
Analysts said the Philippines is unlikely to maneuver to the UMIC category by 2027.
“I’m doubtful we could. Much work must be done to enhance our competitiveness rating to draw more investments,” Ateneo Center for Economic Research and Development Director Ser Percival K. Peña-Reyes told BusinessWorld in a Viber message.
The Philippines inched up a spot to 51st within the 2025 World Competitiveness Yearbook of the International Institute for Management Development. It remained a laggard within the region, rating 13th out of 14 Asia-Pacific economies within the index.
Meanwhile, John Paolo R. Rivera, a senior research fellow on the Philippine Institute for Development Studies, said it is feasible for the Philippines to turn into an upper middle-income country by 2027, but this may “require stronger, more inclusive and sustained economic growth.”
Mr. Rivera said the federal government would need to ramp up infrastructure rollout and boost productivity in agriculture and manufacturing.
“Falling wanting the UMIC threshold despite a lower benchmark highlights how structural challenges and global headwinds proceed to weigh on the Philippines’ income trajectory,” Mr. Rivera said.
He also cited slower-than-expected growth, peso depreciation, and inflation pressures as aspects which have hurt the country’s per capita GNI. — Aubrey Rose A. Inosante