Philippines on track to attain upper middle-income status — World Bank

The Philippines is on track to achieve its goal of becoming an upper middle-income economy, the Washington-based multilateral lender World Bank said Wednesday.

"We do expect the Philippine economy to grow steadily in the medium term, which means the income per capita is expected to rise," World Bank senior economist Ralph Van Doorn said at a virtual press briefing.

"Now, we cannot predict when the country will reach upper middle-income status, except that it seems to be on track to approach that," Doorn said.

Last month, the World Bank committed to assisting the Philippine government in attaining upper middle-income status.

President Ferdinand Marcos Jr. has said that the goal will be achieved "very soon.''

National Economic and Development Authority Secretary Arsenio Balisacan said the target might be achieved in 2025, a year later than previously expected, as the effect of the pandemic-induced recession is likely to temper growth.

Under the World Bank’s updated standards, an upper middle-income economy has a gross national income (GNI) per capita of between $4,046 and $12,535.

The previous administration aspired to bring the country to upper-middle-income status by 2020, but the economy went into recession due to the COVID-19 pandemic.

In 2019, the Philippines was categorized as a lower-middle income country with a GNI per capita of between $1,006 and $3,955.

Data from the Philippine Statistics Authority showed the country’s GNI per capita stood at P182,438 (about $3,300) in 2021, higher than the peak of the pandemic year 2020 of P177,546 (about $3,200), but still lower than the pre-pandemic GNI per capita of P200,135 (about $3,600) in 2019.

For the Philippines to achieve the target, it should continue growing while making sure that growth is inclusive, Doorn said.

"By creating jobs, we increase the income levels not only of the poor but also of those who are just above the poverty line," the World Bank economist said.

"The challenge going forward to be an upper middle-income country is for the economy to create not only jobs but high-quality jobs in the manufacturing and high-value-added services sectors."

The Philippines, he said, should attract more investments and improve education as well as the skills of the labor force. —VBL, GMA Integrated News