World Bank sees upper-middle income status for PH in 2027
'The UMIC status is actually an inevitability; it will happen. The question is when? Is it possible to happen in 2026? It's possible, [but] we really think… that it will take a little bit longer. Probably, it will happen in 2027,' World Bank lead economist Gonzalo Varela said at a press conference in Makati City on Thursday.
'With the economy growing a little bit slower than we thought in the past six months, it will take a little bit longer,' Varela said.
Nonetheless, World Bank senior country economist Jaffar Al-Rikabi said that 'it is far less important exactly which date it will [happen]… the country graduates in this somewhat arbitrary threshold.'
'Much more important is that the economy continues to grow and continues to create good jobs,' Al-Rikabi said.
The Philippines remains a lower-middle income economy, as its gross national income (GNI) per capita at $3,950 in 2022 fell within the World Bank's bracket for lower-middle-income economies, $1,136–$4,465, which was raised from $1,086–$4,255 a year ago.
GNI per capita measures the country's total income divided by its population.
For fiscal year 2024, the World Bank classifies low-income economies as those with a GNI per capita of $1,135 or less in 2022; lower middle-income economies are those with a GNI per capita between $1,136 and $4,465; upper middle-income economies are those with a GNI per capita between $4,466 and $13,845; and high-income economies are those with a GNI per capita of $13,845 or more.
Currently, the Philippines is joined in the lower-middle income bracket by Vietnam ($4,010 GNI per capita), Laos ($2,360), Cambodia ($1,700), and Myanmar ($1,210).
It trailed behind its neighbors, which are in the upper-middle income level: Malaysia ($11,780), Thailand ($7,230), and Indonesia ($4,580).
Singapore ($67,200) and Brunei ($31,410) are in the high-income bracket.
The Marcos administration's chief economist, Economic Planning Secretary Arsenio Balisacan, earlier expressed confidence that the country would graduate to UMIC status by 2026, as he was optimistic that the economy would expand by 6% for the entire 2025.
The economy grew by 5.4% in the first quarter of 2025.
In the June 2025 edition of its Philippines Economic Update, the World Bank is projecting that the Philippine economy—as measured by gross domestic product (GDP)—will grow by 5.3% in 2025, slower than the actual economic growth rate of 5.7% seen in 2024 and also below the low end of the government's goal for the year (6% to 7%).
Al-Rikabi said that the conservative growth projection was due to ''global policy uncertainty.''
'The impact of what's happening externally has resulted in exports doing less well, services growth decelerating, and industry decelerating,' Al-Rikabi said.
In its report, the multilateral lender highlighted that 'escalating regional conflicts may result in elevated commodity prices and impact global shipping and logistics prices.'
The World Bank also issued policy and structural reform recommendations for the Philippines to support its medium-term growth:
Tax reforms, including closing tax policy and compliance gaps to increase the tax-to-GDP ratio
Reforms to improve efficiency of expenditure—including strengthening public financial management, public procurement, and public investment management
Lowering deficits in line with the medium-term fiscal framework
Invest in the infrastructure foundation necessary for jobs—with a focus on connectivity infrastructure and skills gaps.
Streamline business regulations and improve the business environment.
Mobilize private capital to complement public funds.
'The Philippines would benefit from fiscal reforms to support medium-term stabilization and structural reforms to safeguard and accelerate growth,' Al-Rikabi said.
'Boosting private growth and job creation can help the Philippines mitigate the impact of global policy uncertainty,' he said. —VBL, GMA Integrated News
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
GMA Network
a day ago
- GMA Network
PH, Japan mark 69 years of unbreakable bond
Despite being on opposing sides during World War II, the Philippines and Japan have come a long way since the normalization of diplomatic ties in 1956. Nowadays, the two countries' partnership is stronger than ever—spanning culture, trade, people-to-people ties, development, and now on security cooperation. This deepening connection was commemorated in Osaka, Japan, during the 69th anniversary of the Philippines-Japan Friendship Day. The event, organized by the Tourism Promotions Board of the Department of Tourism in coordination with the Philippine Consulate General in Osaka, showcased the rich Filipino culture and the strength of bilateral ties through music, fashion, and sincere tributes. Bayang Barrios led other Filipino performers in lighting up the scene with songs and dances that celebrated the spirit of unity. Singer Bayang Barrios (rightmost) perform with dancers. IAN CRUZ/GMA Integrated News The festivities continued with a stunning fashion show featuring designs by Furne Amato, a Dubai-based Cebuano designer renowned for sophisticated craftsmanship highlighting the spirit of Filipino artistry on the global stage. Filipino artistry is shown in the designs of Pinoy designer Furne Amato. IAN CRUZ/GMA Integrated News Dubai-based Cebuano designer Furne Amato and Tourism Promotions Board COO Maria Margarita Montemayor Nograles at the fashion show segment. IAN CRUZ/GMA Integrated News Ambassador Koji Haneda, commissioner general of Expo 2025, recognized the deep partnership of Japan and the Philippines. 'As we approach the 70th anniversary of diplomatic normalization and the 15th anniversary of our strategic partnership in 2026, moments like this remind us that Japan and the Philippines are not merely neighbors connected by the ocean but partners connected by shared values, common aspirations, and mutual respect,' said Haneda, a former ambassador of Japan to the Philippines. Tourism Promotions Board COO Maria Margarita Montemayor Nograles and Japanese officials celebrate PH-Japan ties. IAN CRUZ/GMA Integrated News Tourism Promotions Board COO Maria Margarita Montemayor Nograles shared the same view as the Japanese envoy. 'We honor a friendship that has stood for 69 years—woven not only by diplomacy and treaties but by shared experiences, mutual respect, and enduring ties between our peoples,' Montemayor Nograles declared. While the occasion was joyous, it also carried a message of empathy. Tourism Secretary Christina Garcia Frasco, through the COO of the Tourism Promotions Board, expressed solidarity with Filipinos affected by the recent string of typhoons and flooding enhanced by the Southwest Monsoon (Hanging Habagat). 'Tonight our hearts and thoughts are with those facing difficult times. We hold you in our hearts even as we gather here today. It is in moments like this that we are reminded of our strength found in unity and the enduring friendship between the Philippines and Japan.' Consul General Voltaire Mauricio in an interview with GMA Integrated News emphasized the importance of disaster preparedness as a shared priority between the two countries. 'Ito po ang ating ginagawa ngayon kapag bumibisita kami sa mga governors ng ibang probinsiya dito sa Japan, kung anong best practices na matutunan natin pagdating sa kanilang ginagawa pagdating sa tsunami, sa bagyo, sa landslides, sa lindol. Ano 'yung ginagawa natin at ano naman ang pwede nating ibahagi sa kanila pagdating sa lakas natin sa mga ganung klaseng sakuna,' the head of the Philippine Consulate General in Osaka explained. (This is what we do when we visit the governors of provinces in Japan. We find out their best practices that we can learn when it comes to response to tsunamis, storms, landslides, and earthquakes. What are we doing and what can we in turn impart to them when it comes to disaster response?) The Philippines has received numerous official development assistance (ODA) from Japan for major infrastructure projects and is one of the first countries to receive official security assistance (OSA) aimed at strengthening maritime security capabilities and improving monitoring and surveillance capabilities The Philippines and Japan established diplomatic relations on July 23, 1956. The celebration coincided with the continuous success of Expo 2025 in Osaka, where the Philippine Pavilion has become one of the important attractions. With its theme 'Nature, Culture, and Community Woven Together for a Better Future,' the pavilion features indigenous textiles, interactive installations, and daily performances. The Philippine Pavilion has welcomed about 600,000 visitors. Ambassador Haneda announced that the expo continues to welcome large crowds every day. From April to the end of July, the Expo has received over 30 million visitors. The Expo located on Yumeshima Island of Osaka will run until October 13. —KG, GMA Integrated News
GMA Network
2 days ago
- GMA Network
World Bank OKs $700-M loan for PH's community resilience project
Multilateral lender World Bank has approved a $700-million loan for the Philippine government's initiative to make communities less vulnerable to natural disasters. In a statement, the World Bank said that approximately 18 million households in the Philippines are expected to become less vulnerable to natural disasters in the coming years, 'due to enhanced community-led planning and infrastructure investments.' The Washington-based lending institution said the $874.35-million Philippines Community Resilience Project 'will engage communities in identifying climate and natural hazard risks and developing resilience plans.' To bankroll the project, the World Bank said it will provide $700 million through an 'International Bank for Reconstruction and Development loan.' The Philippine government, on the other hand, will provide the remaining $174.35 million. The World Bank said the project will prioritize 500 climate-vulnerable municipalities across 49 provinces in the Philippines. The lender added that the municipalities are selected based on their high poverty incidence and significant exposure to climate hazards. Moreover, it said the initiative will support 177 municipalities with an indigenous population of 10% or more, thereby aiding approximately 33% of the total indigenous population in the country. "By empowering local communities to take the lead in building resilience against climate change and disaster risks, the Philippines is not only addressing immediate environmental challenges but also fostering a culture of proactive engagement and resilience," said Zafer Mustafao?lu, Division Director for the Philippines, Malaysia, and Brunei. Initiatives under the program include flood and drought mitigation, landslide and slope protection, surge protection and breakwaters, windbreakers, and retrofitting of existing infrastructure to withstand extreme weather events, according to the World Bank. Moreover, the project will support erosion control, agroforestry, and other nature-based solutions for ecosystem conservation, including community forests, wetlands, marshes, and waterways, erosion control, water conservation, and agroforestry. The lender said the project would also include adoption of services and technologies in areas such as sustainable agriculture and food security —climate-smart farming innovations and small-scale irrigation systems. The World Bank said the Philippines ranks at the top of the World Risk Index due to its high vulnerability and exposure to cyclical extreme events. In 2023, out of 2.6 million disaster-related displacements, 2.1 million were attributed to two major climate-induced hydroclimatic events, namely typhoons and floods, the lender said.—LDF, GMA Integrated News
GMA Network
2 days ago
- GMA Network
Senator urges BSP to apply stricter measures vs. online lending apps
Senate Majority Leader Joel Villanueva on Friday called on the Bangko Sentral ng Pilipinas (BSP) to implement more stringent action against online lending apps amid the rise of internet gambling in the country. Villanueva, who earlier filed an anti-online gambling bill, said the BSP's regulatory oversight on online lending apps, electronic wallets, and digital banks should complement the efforts of law enforcement agencies in addressing the ill effects of online gambling to society. "Kapag pinagsama po ang iligal na online gambling at ang mapagsamantalang pautang ng mga online lending apps, siguradong malulugmok sa kumunoy ang ating mga kababayan," the senator said in a statement. (When you combine illegal online gambling and the exploitative loans offered by the online lending apps, our countrymen will surely fall into quicksand.) "Regulatory agencies must exercise their oversight to support our law enforcement bodies, and do their fair share in slowing down the rampant use of online gambling platforms," he added. The Senate is set to hold an investigation regarding online gambling in the country, as announced by Senator Erwin Tulfo, chairman of the Senate games and amusement committee. Several other lawmakers have also called either for the total ban or strict regulation of online gambling, citing its negative impact on Filipinos who got addicted to it. Villanueva also disclosed that he received information that some employees of Philippine offshore gaming operators (POGOs) have now shifted to online gambling operations, seeking electronic gaming licenses from the Philippine Amusement and Gaming Corporation (PAGCOR). "How does PAGCOR actually screen and monitor its licensees to ensure that these same individuals are not resurfacing under a different name or company? What concrete actions does PAGCOR take when irregularities are discovered?" he asked. PAGCOR Chairman Alejandro Tengco earlier noted that the gaming industry regulator recently signed a memorandum of understanding with the Ad Standards Council (ASC) to strengthen the monitoring of gambling-related advertisements across all platforms. It also recently ordered the takedown of all gambling ads in public spaces and primetime TV by August 15 this year. — VDV, GMA Integrated News
