PH still set to hit income status goal

THE Philippines remains on track to achieving upper-middleincome status next year despite potential revisions to growth targets, Cabinet officials said.

“Even if we reduce the GDP growth target from 6.5-7.5 percent to 6.0-7.0 percent, we still expect to reach upper-middle-income status by 2025,” Socioeconomic Planning Secretary Arsenio Balisacan told The Manila Times on Thursday.

Economic managers are scheduled to meet Friday next week, and Balisacan has said that there was a “case” to revisit current macroeconomic assumptions.

Reasons cited were last year’s gross domestic product (GDP) growth of 5.6 percent, which fell below the 6.0- to 7.0-percent target, subdued global economic conditions and the lagged impact of interest rate hikes.

Budget Secretary and DBCC Chairman Amenah Pangandaman told The Times that as long as the government was consistent with its priorities and budget utilization, “we can stay on track and achieve our targets.”

Echoing Balisacan, she said: “We remain confident that the Philippines will achieve uppermiddle-income status by next year, even if growth targets are adjusted to reflect a more conservative approach.”

The interagency Development Budget Coordination Committee (DBCC), which sets the government’s macroeconomic goals and will meet on March 22, last December lowered the 2024 growth target to 6.5 to 7.5 percent from 6.5 to 8.0 percent.

Balisacan reiterated the necessity of reassessing assumptions but ensured that goals like achieving upper-middle-income status would still be met.

The World Bank categorizes the

Philippines as a lower-middleincome economy, which comprises those with gross national income (GNI) per capita of $1,136 to $4,465. The country’s GNI per capita is currently at $3,950.

Other lower-middle-income economies in Southeast Asia include Vietnam ($4,010), Laos ($2,360), Timor-Leste ($1,970), Cambodia ($1,700) and Myanmar ($1,210).

The Philippines lags behind high-income neighbors like Singapore ($67,200 GNI per capita) and Brunei ($31,410), as well as uppermiddle-income economies such as Malaysia ($11,780), Thailand ($7,230) and Indonesia ($4,580).

The World Bank has adjusted the upper-middle-income band to $4,466 to $13,845 GNI per capita for 2024, up from the previous range of $4,256 to $13,205.

World Bank Country Director Ndiamé Diop has said that the Philippines could attain uppermiddle-income status by 2025 or 2026 contingent upon its economic growth.

The World Bank has also expressed confidence that the country would achieve this in the next few years.

“With continued recovery and reform efforts, the country is getting back on track on its way from a lower-middle-income country with a gross national income per capita of $3,640 in 2021 to an upper-middle-income country in the short term,” the multilateral lender said.

In its latest Global Economic Outlook, the World Bank said that the Philippines could grow by 5.8 percent this year, short of the government’s 6.5- to 7.5-percent target but still among the highest among emerging market and developing economies in East Asia and the Pacific.