The upper-middle-income status is within reach of the Philippines in 2025, according to Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio Balisacan.
Balisacan said in his newspaper column the Philippines narrowly missed the classification by just $26. Its gross national income (GNI) per capita rose from $4,010 in 2022 to $4,320 in 2023 and $4,470 in 2024, while the threshold for upper-middle-income country (UMIC) status this year was $4,496. The World Bank adjusts the cutoff annually for inflation to maintain real-term consistency.
Balisacan said that GNI represents the total income earned by a country’s residents, including income from abroad. GNI per capita is derived by dividing GNI by the mid-year population. The World Bank converts GNI figures to U.S. dollars using the “Atlas method,” a three-year average of exchange rates adjusted for inflation differences between countries.
“Given these trends, a transition to UMIC status is highly likely in 2025. Still, confirmation will only come in July 2026, when the World Bank releases updated estimates and thresholds. Four key variables determine this shift: the country’s income growth, exchange rate movements, domestic inflation relative to global inflation, and the evolving UMIC threshold,” Balisacan said.
He cited the significance of the transition beyond national pride, noting the Philippines has been a lower-middle-income country since the 1980s and is currently the only one among the five original ASEAN members in this category. Vietnam, though not an original member, is also close to the UMIC cutoff.
The shift also carries practical implications, signaling a gradual reduction in eligibility for concessional loans and grants from multilateral institutions. As of February 2025, the country’s official development assistance loans amounted to P2.53 trillion, or about 15.2 percent of the total national government debt.
Consistently rising GNI per capita reflects strong economic fundamentals, Balisacan added. Achieving UMIC status could signal improved creditworthiness, potentially enhancing the Philippines’ sovereign credit ratings and lowering borrowing costs for both the government and the private sector.
“Achieving UMIC status is a worthy milestone—and it is finally within reach. However, the more challenging task lies ahead: staying there and progressing further toward high-income status. This challenge will require discipline in maintaining sound macroeconomic fundamentals, alongside bold efforts to strengthen institutions and governance,” Balisacan said.
