PHL ‘has moved closer’ to threshold of upper middle-income status — World Bank

By Justine Irish D. Tabile, Senior Reporter

THE World Bank said the Philippines is approaching the gross national income (GNI) per capita threshold that would lead to its reclassification as an upper middle-income country (UMIC).

“The Philippines is projected to be close to the upper middle-income threshold based on current GNI per capita trends,” the World Bank said in an e-mail late Tuesday in the wake of the approval of an $800-million loan for the Philippines.

The bank greenlit the $800-million Philippines Growth and Jobs Development Policy Loan last week, which will help the country strengthen its fiscal resilience, attract higher-quality private investment, and upskill its workforce.

“This support comes as the Philippines’ GNI per capita has moved closer to the threshold of upper middle-income countries, on the back of inclusive GDP growth since 2010 that has enabled the economy to double in size every 13.5 years,” the World Bank said in a statement that was updated on March 17.

“Yet, the country today faces domestic and external shocks that underscore the value of ongoing fiscal and structural reforms to reach higher, more job-rich growth, and to reduce vulnerability to shocks,” it added.

Last year, the World Bank classified the Philippines as a lower middle-income country after it missed the threshold for UMIC status by $26. GNI per capita was $4,470, while the GNI per capita requirement for UMIC classification was $4,496-$13,935.

The bank is scheduled to release its updated annual thresholds and GNI per capita lists in July.

Earlier this year, the Department of Economy, Planning, and Development (DEPDev) said the Philippines is still on track to achieve UMIC status this year, despite posting weaker-than-expected 4.4% gross domestic product (GDP) growth in 2025.

DEPDev issued its assessment before the latest round of fighting broke out in the Persian Gulf. Asked to comment on Tuesday, Economy Secretary Arsenio M. Balisacan said: “The updated data in the July 1 publication of the WB covers the GNI per capita in 2025. The ongoing crisis in the Middle East will not affect the 2025 numbers.”

Ateneo Center for Economic Research and Development Director Ser Percival K. Peña-Reyes told BusinessWorld that “slow growth from last year” makes it “not likely” that the Philippines will cross the threshold this year.

He also cited “inflation, which could further dampen growth” and “stagflation … if this war drags on” as risks to achieving UMIC status.

He said it is possible that the World Bank lowers the threshold, “but it is not something I would consider reassuring.”

Last year, the World Bank lowered the GNI per capita requirement for UMIC to $4,496-$13,935 from between $4,516 and $14,005 in 2024.

China Banking Corp. Chief Economist Domini S. Velasquez said that the “slowdown in growth, coupled with higher inflation, could delay or even reverse  progress toward UMIC status.”

“Higher inflation does two things: reduces real purchasing power (hurting households directly), and it can weaken the currency, which lowers GNI per capita in US dollar terms — the metric that matters for UMIC classification,” she said via Viber.

However, she said that the focus should not be on the UMIC label itself but on “improving lives through stable jobs, stronger incomes, and better resilience.”

“While we may be approaching the World Bank’s upper middle-income threshold, what matters is sustaining it — not just reaching it,” she added.