PH seen reaching upper-middle income status by 2026

The Philippines is poised to attain upper-middle income country (UMIC) status by late 2025 or early 2026, according to Finance Secretary Ralph Recto, as the economy continues to show signs of strong growth and resilience.

“Yes, we expect to achieve UMIC status by the end of this year or next year,” Recto said on Wednesday in a message to reporters.

The statement comes following the World Bank’s release of updated income classifications, showing the Philippines with a gross national income (GNI) per capita of USD4,470 in 2024—a record high. The figure surpasses the lower end of the government’s target range of USD4,454 to USD4,592 under the Philippine Development Plan (PDP) 2023–2028.

To reach UMIC status, countries must attain a GNI per capita between USD4,496 and USD13,935 based on the World Bank’s thresholds. The Philippines is currently classified as a lower-middle income country.

Recto emphasized that the government’s expansionary fiscal strategy, with a 2025 budget of PHP6.326 trillion and a proposed 2026 budget of PHP6.793 trillion, is aligned with the country’s growth ambitions. These budgets aim to strengthen infrastructure, human capital development, and climate resilience while promoting inclusive economic activity.

“We are focused on ensuring inflation remains within target and will continue to reduce interest rates to support investments and consumption,” Recto added.

Economic analysts expressed cautious optimism. Philippine Institute for Development Studies senior research fellow John Paolo Rivera said the country could meet the threshold if it maintains over 6% annual growth, manages inflation, and keeps the peso stable. “The window is narrowing, but the goal is still within reach,” he noted.

Michael Ricafort, chief economist at Rizal Commercial Banking Corporation, agreed that the Philippines could graduate to UMIC status as early as 2026 or 2027, provided the economy maintains its momentum.

The shift in classification would mark a key milestone for the country, reflecting improvements in income levels, economic productivity, and international investor perception. However, experts cautioned that sustaining progress will require consistent governance, strategic investments, and proactive policy responses to global headwinds.