Middle income trap

SKETCHES

- ANA MARIE PAMINTUAN

The typhoons late last year, geopolitical conflicts, and now the global upheaval unleashed by Category-5 Hurricane Trump have made the Marcos administration reset its target for the Philippines' transition to upper-middle income status from this year to 2026.

But a World Bank official has said a more realistic target would be 2027. With the global headwinds faced by the country as well as the instability expected from the worsening political warfare among the ruling elite, the goal may even have to be moved back to 2028.

According to the World Bank, middle income countries account for 75 percent of the global population and a third of global GDP. Among the MICs, there are 51 classified as lower-middle income economies and 54 upper-middle income. The Philippines has been classified as lower-middle income since 1987.

If it's any consolation to despairing folks, the country is not alone in struggling to get out of the middle-income trap and the problems faced by many MICs including poverty, hunger, inequality, climate change, a widening digital divide, aging populations and debt burdens.

Economists have also pointed out that the Philippines must be prepared to see its access to foreign aid diminish if the country transitions to upper-middle income status.

Haoliang Xu, United Nations under-secretary-general and associate administrator of the UN Development Program, tends to look on the bright side, seeing the pluses in the Philippines that may allow the country to attain its upper-middle income goal.

These include sound macroeconomic fundamentals, the professionalism that he sees in the civil service, and yes, our "vibrant" democracy.