Philippines gears up for economic leap to upper-middle income by 2026

The Philippines is eyeing a long-awaited promotion on the global income ladder. If it can maintain a 6% annual growth rate, the country may finally enter upper-middle income territory by 2026—a milestone that has remained elusive for decades.

This was the central message from Arsenio Balisacan, secretary of the national economic and development authority (NEDA), during a recent press briefing. He stressed that while the transition remains a formidable challenge, it is still within reach.

"I think the upper-middle income status is challenging. But I think if we get 6% [growth] this year, 6% next year, we should achieve that status next year," Balisacan said, as quoted by Inquirer.

Don't miss: Philippines off money laundering grey list, eyes stronger financial flows

The Marcos administration has pinned part of its economic vision on this transition, setting its sights on a potential upgrade by late 2025 or early 2026. The shift would place the Philippines alongside neighbours such as Indonesia, Thailand, and Malaysia—all currently classified as upper-middle income economies by the World Bank.

To make the jump, the country needs to lift its per capita gross national income (GNI) beyond the US$4,516 threshold. In 2023, the Philippines reported a record-high GNI per capita of US$4,230, still short of the benchmark. The World Bank's income classification, recalculated annually every July using the Atlas method, will determine whether the Philippines makes the cut.

Beyond the symbolic value, the transition carries both benefits and trade-offs. It's a narrative shift that marketers, policymakers, and investors alike should pay attention to. Elevating to upper-middle income status boosts the Philippines' brand equity in the region—but it also means graduating from preferential trade terms and access to concessional loans reserved for lower-income countries.

Balisacan acknowledged the allure of the status shift but encouraged a broader perspective.

"[GNI] is a useful measure; it's a broad measure. But unfortunately, it cannot capture everything, especially those things that really matter for the well-being of the country's citizens," he noted, citing employment, literacy, and poverty reduction as equally important benchmarks.

Next week, the Philippines will host a high-level conference for middle-income countries in Makati City, reported government-owned Philippine News Agency. Organised under the Like-Minded Group in Support of Middle-Income Countries, the summit brings together over 200 delegates—including ministers and development leaders—from nations such as Mexico, Colombia, Indonesia, and Malaysia.

The event aims to push forward solutions on inequality, climate vulnerability, financing, and innovation, and will culminate in the Manila Declaration on Middle-Income Countries. Foreign affairs secretary Enrique Manalo said the gathering reflects how middle-income countries are now "agents, rather than mere recipients" of global development.

Balisacan also reiterated the Philippines' ambition to reach upper-middle income status by 2026, while warning against the risks of falling into the "middle-income trap" without inclusive and forward-looking reforms.

Related articles:
BDO Foundation, SEC Philippines team up to tackle investment scams
Google PH says it sees 'amazing growth' in Philippine economy
Study: Nearly two-thirds of Philippine workers plan job switch in 2025