The promise of Phl’s upper-middle income status

The Philippines is now classified as an upper-middle income country, following an upgrade by the World Bank in its latest country income classification update. After almost four decades as a lower-middle income economy, this is a landmark achievement reflective of the country’s growing economic strength and resilience. As we celebrate this milestone, we must remain focused on the greater goal – translate economic gains into meaningful improvements in the lives of every Filipino and ensure that this growth is felt where it matters most.

The development comes after the country hit a gross national income (GNI) of $4,850 – exceeding the income threshold of $4,636 for the fiscal year, which it attributed to “broad-based expansion” that reflected gains across all major industries in the past five years.

For policymakers, this milestone is proof that the country is moving in the right direction and that years of economic policies and reforms have bolstered the economy.

Economists are quick to note that many Filipinos continue to feel the strain of higher living costs, with inflation still above target.  But one cannot discount the fact that this improved status brings forward a stronger platform for growth, investment and job creation. It helps how investors view our country, how international lenders assess risks and how the Philippines negotiates trade terms with other countries.

The challenge now is to ensure that this economic progress translates into meaningful improvements in the everyday lives of Filipinos. This means better pay, affordability of goods, accessibility and quality services – specifically in health care and education. As these gains become more widely felt, this upper-middle income status will stand not just as an economic milestone, but a reflection of improving lives and expanding opportunities.

In my humble opinion, the most urgent priorities are poverty alleviation and addressing inequality.

Beyond the distribution of financial aid to poor families, the government needs to improve poverty alleviation programs designed as a springboard to encourage productivity, instead of dependence. Job creation is central to addressing this challenge.

The government should use our new upper-middle income status as leverage to pull in more investments and create more jobs, particularly in the fields of agriculture and manufacturing, to balance or even lessen our economy’s dependence on remittances from overseas workers. This way, we spur development at both the regional and national levels.

To sustain progress, there is also a need to diversify our economic base and strengthen domestic industries. In support of this, the government should also prioritize improving connectivity – roads, bridges, expressways – across the country to ensure that opportunities reach the provinces.

Quality education and upskilling are equally important and urgent to help Filipinos land jobs and develop careers that match their skills. When Filipinos are educated and skilled, they are better equipped to land quality jobs and can contribute more to the economy.

Inequality should also be addressed. In all my years, I have seen that progress is most meaningful when it creates opportunities for more people, not just those who are well-off. Structural reforms will ensure that opportunities are spread across regions and sectors. To sustain our gains, we must continue investing in rural development, skills training, fair wages and stronger worker protections.

Having lived through the many challenges and uncertainties of the past, I have seen firsthand the resilience and determination of the Filipino people. That is why this achievement feels quite meaningful. I am grateful to have witnessed this moment in our country’s history – a reminder that, despite the obstacles we have faced, we continue to move forward. It gives me hope that the progress we celebrate today will lead to even greater opportunities and a better future for the generations that follow.

At the same time, it reminds us of the work that lies ahead – to ensure that growth is inclusive, that more families are lifted out of poverty and that opportunities reach communities across the country. As we build on this achievement, let us remember the bigger mission: to make upper-middle income status a reality reflected not just on paper, but in better lives, greater opportunities and a brighter future for all Filipinos.