THE Philippines is poised to ascend to upper-middle income status by 2025, according to National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan.
Speaking at NEDA’s year-end press conference in Mandaluyong City on Friday, Balisacan expressed optimism about the country’s economic trajectory.
“We have a good chance of attaining upper-middle income country status in 2025,” he said.
Current Economic Classification
As of 2022, the Philippines remained a lower-middle income economy under the World Bank’s classification. The country’s gross national income (GNI) per capita stood at $3,950, within the bracket for lower-middle income economies, defined as $1,136 to $4,465.
This threshold was revised from the previous range of $1,086 to $4,255.
For fiscal year 2024, the World Bank classifications are as follows:
Low-income economies: GNI per capita of $1,135 or less
Lower-middle income economies: GNI per capita between $1,136 and $4,465
Upper-middle income economies: GNI per capita between $4,466 and $13,845
High-income economies: GNI per capita of $13,846 or more
Currently, the Philippines shares its lower-middle income status with Vietnam ($4,010), Laos ($2,360), Cambodia ($1,700), and Myanmar ($1,210). Meanwhile, regional neighbors Malaysia ($11,780), Thailand ($7,230), and Indonesia ($4,580) have achieved upper-middle income status, with Indonesia moving up this year.
High-income economies in the region include Singapore ($67,200) and Brunei ($31,410).
Challenges and Growth Targets
Balisacan emphasized that achieving upper-middle income status will depend on meeting key economic targets and ensuring currency stability.
“Attaining this status will require that we achieve our growth target this year, maintain our growth trajectory in 2025, and ensure our currency does not weaken significantly relative to the currencies of our major trading partners,” he stated.
In the first three quarters of 2024, the Philippine economy, as measured by gross domestic product (GDP), grew by 5.8%, slightly below the government’s 6% to 7% target for the year. For 2025, the administration has set a higher GDP growth goal of 6.5% to 7.5%.
Poverty Reduction Goals
Balisacan also reaffirmed the government’s commitment to reducing poverty to a single-digit rate by 2028. In 2023, the poverty rate fell to 15.5% from 18.1% in 2021, with the number of poor Filipinos dropping to 17.54 million from 19.99 million in the same period.
“Despite high inflation, we have already made remarkable strides, with poverty falling to 15.5% in 2023. Maintaining low and stable prices is critical to reducing poverty and making economic growth more inclusive,” Balisacan said.
To sustain these gains, the government plans to strengthen social protection programs, leveraging digital solutions such as the National ID system to ensure equitable access to benefits.
Outlook
With robust growth targets, ongoing reforms, and a focus on inclusivity, the Philippines is on track to achieve both upper-middle income status and a single-digit poverty rate in the coming years.