The Philippines has been reclassified as an upper-middle income country, reflecting the economy's broad-based expansion. This new classification is based on the country's record gross national income per capita of $4,850, which exceeds the threshold for upper-middle income status. The previous year's GNI per capita was $4,470, narrowly missing the threshold by $26. The increase in GNI per capita has prompted a reclassification, with the country now joining the category of economies with GNI per capita ranging from $4,636 to $14,375.
The country's reclassification is attributed to its broad-based expansion, with GDP growing at an average of 5.8% per year over five years. This growth reflects gains across all major industries, rather than a single sector boom. The economy-wide shift has resulted in the Philippines achieving upper-middle income status, a category it had previously missed since 1987. The country was previously classified as a lower middle-income economy.
The Department of Economy, Planning, and Development has attributed the strong performance across all industries to the country's relentless pursuit of inclusive growth, strengthened fundamentals, and remaining on track with its development agenda. The new classification is expected to strengthen the country's credit profile, boost investor confidence, and expand access to financing and higher-quality investments. This, in turn, could generate better jobs for citizens.
The Philippines is one of five economies reclassified by the World Bank from lower middle-income to upper middle-income status, along with Jordan, Micronesia, Sri Lanka, and Vietnam. Vietnam moved up to upper middle-income status after posting a GNI per capita of $4,970. The Philippines remains ahead of neighboring countries such as Cambodia, Laos, and Myanmar, which are still classified as lower middle-income economies.
The World Bank computes a country's GNI through the Atlas method, which serves as the basis of its income classifications. GNI refers to the total amount of money earned by a country's residents both inside and outside its borders. The new classification is expected to have a positive impact on the country's economy, with potential benefits including increased investor confidence and access to higher-quality investments.
The reclassification of the Philippines as an upper-middle income country marks a significant milestone in the country's economic development. The country's strong economic performance and broad-based expansion have earned it a place among other upper-middle income economies, such as Malaysia, Thailand, and Indonesia. High-income economies, such as Singapore and Brunei, remain in a separate category, with significantly higher GNI per capita.
