National Economic and Development Authority head Arsenio Balisacan recently said in a forum that given the current pace of the economy, the Philippines may take longer to achieve the coveted upper-middle-income status.
“Considering the impact of the COVID-19 pandemic, achieving that target will likely be delayed by a few years, even under the most optimistic projections for growth,” Balisacan said. “In all likelihood, new disruptions and unforeseen events will emerge – circumstances, like the pandemic, that we cannot even imagine at this point.”
He had earlier claimed in July that the country is on its way to becoming an upper-middle-income country by 2024 if the current economic growth is sustained.
Last February, the economic planning agency also anticipated that the country will reach upper-middle-income status by the end of the year, especially with the Philippine Innovation Act. At the time, then NEDA chief Karl Chua believed that the country’s economic indicators put it on a path that would attain the income level by then.
AmBisyon 2040 is NEDA’s vision of the Philippines achieving high income status. Its vision states that by 2040 the country will be a prosperous, predominantly middle-class society where no one is poor.
According to the World Bank, a country needs $4,096 to $12,965 Gross National Income (GNI) per capita in order to achieve upper-middle-income status. As of 2021, the Philippines is at a mere $3,640 GNI per capita.
The pre-pandemic level was actually higher in 2019, at $3,850 GNI per capita which was just $246 shy of the threshold. However, due to the pandemic, it fell sharply to $3,430 GNI per capita.
The goal of achieving upper-middle-income status for the country is a noble one, and more notably, it is also achievable. We were apparently on our way towards that, even if most Filipinos couldn’t actually feel it yet. However, now that we’ve been derailed by the pandemic, inflation and the cost of living is rising, and life seems to be a little bit more difficult, our country’s economic managers may have to focus more on how they can make life better for Filipinos, regardless of whether the numbers say that we are close to calling ourselves as part of the upper-middle-income class or not.*
