Philippines faces long road in quest to break free of middle-income trap

The Philippines' ambition to graduate from -being a middle-income economy will require many years of sustained growth, with scarring from the coronavirus pandemic and global uncertainties delay its progress.

- Aubrey Rose A. Inosante

Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio M. Balisacan said the country's transition to high-income status could take "decades of sustained high growth and capacity expansion." threatening to "Globally, the median period required for a country to progress from middle-income to high-income status is approximately 23 years. Since 1990, only 35 middle-income countries have transitioned to high-income status," Mr. Balisacan said.

The Philippines is currently classified as a lower-middle-income economy as its gross national income (GNI) per capita stood at $4,470 in 2024, up from $4,230 a year earlier, but still far from the World Bank's high-income threshold of more than $13,935.

GNI per capita would need to grow more than three times for the Philippines to become a high-income country, Mr. Balisacan said.

The Philippines has been stuck in the World Bank's lower-middle-income bracket since 1987. The Marcos administration is targeting to reach upper-middle-income status by next year.

In Southeast Asia, Vietnam has overtaken the Philippines in terms of GNI per capita, reaching $4,490. Other economies in the lower middle-income level are Cambodia ($2,520), Laos ($2,000), and Myanmar ($1,220).

Meanwhile, Malaysia ($11,670), Thailand ($7,120), and Indonesia ($4,910) are upper-middle-income countries. Singapore ($74,750) and Brunei ($36,150) are high-income countries.

According to World Bank Division Director for the Philippines, Malaysia and Brunei Zafer Mustafaoğlu, the Philippine economy must grow by 6% to 7% annually to reach high-income status.

"Regardless of these thresholds, it is important for the Philippines to continue on a path of fast, inclusive, and job-rich growth that translates into improved living standards for all Filipinos," Mr. Mustafaoğlu said in an e-mail.