PH seen on track to attain upper-middle-income status in 2025

The Philippines is projected to reach upper-middle-income status in 2025 after narrowly missing the threshold this year, according to a senior government official.

Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio Balisacan said the country’s gross national income (GNI) per capita stood at $4,470 in 2024, just $26 shy of the $4,496 benchmark set by the World Bank for upper-middle-income countries.

Writing in a newspaper column, Balisacan noted that the GNI per capita had risen steadily from $4,010 in 2022 and $4,320 in 2023. He added that the World Bank annually adjusts the classification threshold to account for inflation, using the Atlas method—a three-year average exchange rate adjusted for cross-country inflation differences.

“Given these trends, a transition to UMIC status is highly likely in 2025,” he said, while cautioning that formal confirmation will only come in July 2026 with the World Bank’s next income classification update.

Balisacan highlighted that this milestone carries more than symbolic value. “It has practical implications,” he said, noting that it could reduce the Philippines’ access to concessional financing from development partners.

As of early 2025, concessional official development assistance (ODA) loans made up %u20B12.53 trillion, or 15.2 percent of the national government’s total debt.

Despite potential changes in financing terms, the shift could benefit the country’s credit profile. “Achieving UMIC status could enhance the Philippines’ creditworthiness and help lower borrowing costs for both the government and the private sector,” Balisacan said.

Among the five founding members of the Association of Southeast Asian Nations (ASEAN), the Philippines remains the only one still classified as a lower-middle-income economy. However, neighboring Vietnam is also approaching the upper-middle-income threshold.

Balisacan emphasized that sustaining the upgrade will require more than economic momentum. “The more challenging task lies ahead: staying there and progressing further toward high-income status,” he said, stressing the need for macroeconomic discipline and institutional reforms.

The World Bank's classification system is a widely used global benchmark for development progress and investment risk assessments.