The Philippines is poised to become an upper middle-income economy by 2020, the Asian Development Bank said in a report Wednesday.
The Manila-based multilateral lender said in its 2016 annual evaluation review the Philippines, its host country, along with other Asian countries, were on course to become upper middle-income economies amid improvement in infrastructure, public sector and social welfare programs.
“By 2020, ADB expects that Indonesia, the Philippines and Sri Lanka to reach upper middle-income status,” the bank said.
“The increased demand for better public services and social welfare programs from the many countries across the region that have transitioned to middle-income status over the past decades will continue to shape ADB’s agenda,” it said.
ADB’s projection was even faster than the National Economic and Development Authority’s goal for the Philippines to achieve an upper-middle income status and eradicate extreme poverty and hunger by 2040.
“The Philippines shall be a country where all citizens are free from hunger and poverty, have equal opportunities, enabled by fair and just society that is governed with order and unity. A nation where families live together, thriving in vibrant, culturally diverse and resilient communities,” Neda said, quoting the ‘Ambisyon Natin’ 2040 report, which contains the country’s aspirations over the next 25 years.
The country was a lower-middle income economy with $3,500 per capita in 2014. Neda said to become an upper middle-income economy, the country should have a per capita income level of $11,000, similar to Malaysia’s today.
ADB said Asian economies should build resilience as emerging risks and destabilizers such as widening income inequality, slower growth and climate change were reshaping Asia’s economic landscape.
“The urgency for countries to adapt to the new environment is growing,” ADB said.
ADB said Asia was more exposed to external shocks through the closer integration of global markets. The region’s economic prospects are also increasingly linked to the ability of China and India to address their economic, environmental and climate challenges, it said.
“External shocks—irrespective of their origin—quickly push the vulnerable below the poverty line and the poor deeper into poverty,” said Vinod Thomas, director general of ADB’s Independent Evaluation.
The review found that for 60 percent of ADB’s private sector investment projects, both development results and ADB profitability were high, highlighting that development impact and profitability were not at odds with each other.
“Strengthening how new infrastructure can reduce the opportunity gaps between income groups is particularly important in Asia, where most of the world’s poor live,” said Jiro Tominaga, the report’s lead author.