Balisacan sees 'good chance' of PH hitting upper-middle income status in 2025

The Philippines’ elevation to becoming an upper-middle income economy will be attained next year, according to National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan.

“We have a good chance of attaining upper middle-income country status in 2025,” Balisacan said at NEDA’s year-end press conference in Mandaluyong City on Friday.

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.

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.

“Attaining this status will require that we achieve our growth target this year, that we maintain our growth trajectory in 2025, and our currency will not weaken significantly relative to the currencies of our major trading partners,” Balisacan said.

As of the first three quarters of 2024, the economy as measured by gross domestic product (GDP) —the total value of goods and services produced in a period— grew by 5.8%, slightly below the government’s target band.

The Marcos administration has set a 6% to 7% GDP growth target for 2024 and 6.5% to 7.5% goal for 2025.

Single-digit poverty rate

Moreover, the country’s chief economist said that the government’s “goal of reducing nationwide poverty to a single-digit rate by 2028 remains achievable.”

In 2023, the country’s poverty rate stood at 15.5% from 18.1% in 2021.

In terms of magnitude, there were 17.54 million poor Filipinos in 2023, which was lower than the 19.99 million poor Filipinos in 2021.

“Despite high inflation, we have already made remarkable strides, with poverty falling to 15.5% in 2023 from 18.1% in 2021. Maintaining low and stable prices is critical to reducing poverty and making economic growth more inclusive. We will continue to enhance our social protection programs, particularly through digital solutions enabled by the National ID, to protect our gains and ensure that no one is left behind,” Balisacan said. — RSJ, GMA Integrated News