The Philippines has officially advanced to upper-middle-income economy status after nearly four decades, following a World Bank reclassification that recognized the country’s sustained economic expansion.
The World Bank upgraded the Philippines after its gross national income (GNI) per capita reached USD 4,850 in 2025, surpassing the institution’s USD 4,636 threshold for upper-middle-income economies, based on estimates by the Department of Economics, Planning, and Development (DEPDev).
The new classification ends the country’s 38-year stay as a lower-middle-income economy and places it alongside regional economies such as China, Malaysia, Thailand, Indonesia, and Vietnam.
Welcoming the milestone on Thursday, Executive Secretary Ralph Recto said the upgrade reflects stronger economic fundamentals and is expected to encourage investment, create more jobs, and raise incomes.
“Hindi lang ito titulo. Ibig sabihin nito, mas lumalago ang ekonomiya natin. Mas dumarami ang trabahong nalilikha, mas lumalaki ang kita ng ating mga kababayan, at mas maraming investors ang nagtitiwala sa Pilipinas,” Recto said.
The World Bank attributed the country’s promotion to broad-based economic growth, noting that the Philippines posted an average annual gross domestic product (GDP) growth of 5.8 percent over the past five years, with expansion recorded across multiple sectors.
GNI per capita, which measures the average income generated by a country’s residents from both domestic and overseas sources, is widely used as an indicator of economic well-being and living standards.
While describing the reclassification as a significant achievement, Recto stressed that it should not be viewed as the government’s final objective.
“Ang tunay na sukatan ng tagumpay ay kung nararamdaman ba ito ng bawat pamilyang Pilipino. Kaya hindi tayo titigil hangga’t mas maraming Pilipino ang nakakaahon sa kahirapan at mas gumagaan ang kanilang pamumuhay,” he said.
Recto said the Marcos administration will continue to pursue policies aimed at keeping inflation in check, protecting jobs, strengthening consumers’ purchasing power, attracting investment, and boosting business confidence.
The government also plans to accelerate implementation of major infrastructure projects, continue the targeted UPLIFT program to cushion the lingering economic effects of the conflict in the Middle East, implement the 2026 national budget efficiently, and complete preparations for the proposed 2027 spending plan.
In addition, the administration will push reforms to improve the ease of doing business, expand digital connectivity, strengthen education and workforce skills, and enhance the country’s resilience against climate-related risks and external economic shocks.
With its new economic classification, the Philippines is expected to rely less on concessional financing. Recto said the government instead intends to expand public-private partnerships, deepen domestic capital markets, and tap other market-based financing sources to sustain investments in infrastructure and national development.*
Reymund Titong is a Filipino journalist steadily building his voice in the field of news reporting, driven by a commitment to tell meaningful and relevant stories.
He serves as a correspondent for Rappler, contributes to Negros Daily Bulletin, and maintains a blog on Medium.