Upper-middle income status to fuel foreign investment surge – DTI

MANILA, Philippines — The country’s recent transition to upper-middle income status is expected to drive more foreign investments to the country, according to the Department of Trade and Industry (DTI).

The Department of Finance, meanwhile, said the reclassification is not expected to have an immediate impact on the interest rates of the loans it would tap from multilateral institutions.

The DTI said that the country’s entry to the upper middle-income tier is a powerful signal for international capital.

“This upgraded classification is set to strengthen the country’s credit profile, boost investor confidence and signal to global enterprises that the Philippines is stable and primed for manufacturing, innovation and regional expansion,” the DTI said.

It said that the strong trade momentum and rising capital inflows contributed to the Philippines’ ascent to upper-middle income country status.

Quoting DOF Secretary Frederick Go, Palace press officer Claire Castro said the effect of the country’s new status on concessional loans would not be felt within the next three years.

“The effect on multilateral loans will not take effect immediately. Most of them have a period to see if we maintain the status for about three years before there is an effect on loan rates, and the effect is very minimal and only affects very few,” Castro said in a press briefing

“For 2026 or 2027, there will be no effect and if there is one, it will be very minuscule,” she added.

The World Bank classified the Philippines as an upper-middle income economy, or those with a gross national income per capita of $4,636 to $14,375, after the country’s GNI per capita reached $4,850 in 2025.

It said that the Philippines’ reclassification to upper-middle income from lower-middle income reflects the country’s broad-based expansion and gains across all major industries.

Last year, the Philippines’ merchandise exports hit a record high of $84.48 billion.

In 2025, the Board of Investments approved P1.56 trillion worth of investments, the second-highest level of investment approvals in the BOI’s 58-year history.

Meanwhile, the Philippine Economic Zone Authority approved P261 billion worth of investments, surpassing its P250-billion target.

Trade Secretary Cristina Roque said the Marcos administration is focused on its goal of securing a record number of free trade agreements (FTAs) and improving the ease of doing business.

FTAs have helped unlock record investment flows and trade volumes for the country through lowered tariffs, expanded market access and improved competitiveness.

“Serving as the ASEAN Chair for 2026 gives the Philippines a premier stage to showcase this economic progress, attract high-value capital and ensure that our economic growth translates into sustainable, high-quality jobs for all Filipinos,” Roque said.

For businesses, Management Association of the Philippines president Donald Lim said the country’s reclassification as an upper-middle income country is a positive signal to global investors, but also a reminder of the importance of continued reforms.

“Government should use this momentum to accelerate reforms that improve ease of doing business, attract high-value investments, raise productivity and strengthen our comp etitiveness so that economic growth becomes more inclusive and widely felt,” he said.