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Still reaching higher

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The Philippines has remained in the lower middle-income country (MIC) group of the World Bank for the fiscal year 2025, staying in the same classification since 1987, which demonstrates the painfully slow progress the country is making to expand its economy in step with population growth, and marks a setback for the Marcos Jr. administration’s ambition to reach the upper MIC status within its term.

The WB ranks countries according to their gross national income (GNI) per capita, which for the Philippines rose to $4,230 in 2023 from $3,950 the previous year. That puts the country in the lower MIC group, which under the WB Atlas method includes nations with a GNI per capita of between $1,146 and $4,515.

To make the goal a little bit more difficult, the WB increased in 2023 the threshold for upper MIC status from what was previously a GNI per capita of $4,466.

GNI is the total amount of money earned by a country’s people and businesses. It is used to measure and track a nation’s wealth from year to year and includes the gross domestic product plus the income it receives from abroad such as remittances from overseas Filipino workers.

Secretary Arsenio Balisacan of the National Economic and Development Authority said that the country’s goal to reach upper MIC status could be achieved by late 2025 or early 2026. The economic team of the Duterte administration also had the same target for 2020, which was scuttled due to the pandemic.

Prior to the health crisis, the WB had been optimistic on the prospects of the Philippines moving up. In its country partnership framework for the Philippines for the period July 2019 to December 2023, the multilateral lender noted “with a young, digitally engaged population and one of the fastest growing economies in Asia, the Philippines is increasingly positioned to deliver on its ambitious national development goals.”

Perhaps it is just a matter of time before we reach upper MIC status, but if we look at it on the bright side, it may be better to be just at the cusp of achieving that goal, so our government works a little bit harder to reach for it, as we have this tendency to celebrate too much and rest on our laurels if we had already been successful by now.*

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