PH may achieve upper-middle income status by late 2025 or early 2026 — Balisacan

The Philippine government’s aim to elevate the economy to upper-middle income status could be achieved later than earlier projected, the country’s chief economist said Thursday.

At a press briefing following the 188th Development Budget Coordination Committee (DBCC) meeting, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said hitting the upper-middle-income economy status would be possible “towards the latter part of 2025 or early 2026.”

Balisacan earlier said that the Philippines was on track to achieve upper-middle income status by 2025.

“Our original estimate was 2025,” the NEDA chief said.

Balisacan explained that the 2025 target for the economy to graduate to the upper-middle income bracket was made on the assumption that the economy would grow 6.5% to 8%.

“But, of course, you know we have revised [down] the growth,” he said.

For 2025, the DBCC slashed its growth target to 6.5% to 7.5% from the earlier goal of 6.5% to 8%.

Nonetheless, the NEDA chief said hitting upper-middle income status is still possible, “but perhaps towards the latter part of 2025.”

“If the exchange rate moves in the direction of currency depreciation, then that could put us [beyond] 2025,” he said, adding that the threshold for classifying economies based on gross national income per capita is in US dollars.

“It’s influenced by the exchange rate, so it will depend… Late 2025 is still possible if the economy can grow as we expected and the peso will not depreciate much,” Balisacan said.

The Philippines remained a lower middle-income economy under the World Bank’s latest classification, as the country’s gross national income (GNI) per capita at $3,950 in 2022 fell within the bracket for lower middle-income economies of $1,136–$4,465, which was raised from $1,086–$4,255 a year ago.

Data from the Philippine Statistics Authority also showed the country’s GNI per capita (at current prices) stood at P241,165 in 2023, 14.7% from P210,228 in 2022.

For the current 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), which moved up this year from a lower-middle income status.

Singapore ($67,200) and Brunei ($31,410) are in the high-income bracket. —VBL, GMA Integrated News