The Philippines is forecasted to retain its status as an upper-middle income country (UMIC) despite experiencing notable economic challenges in the first half of the year. This assessment comes from the Department of Economy, Planning, and Development.
Economy Secretary Arsenio M. Balisacan reassured the public that the current slowdown will not jeopardize the country’s UMIC standing, emphasizing that gross national income (GNI) per capita remains positive.
If the economy contracts sharply, it could affect the country’s status. But even the determination of our classification is not based on one year’s performance.
Arsenio M. Balisacan, Economy Secretary
The Philippine economy grew by only 2.3% in the second quarter, falling short of the previous year's 5.4% growth rate. This brings the first-half growth to 2.6%, below the government’s revised target of 3.5%-4.5% for 2026.
Despite the slower growth, ANZ Research predicts a recovery, forecasting a 3.9% growth rate for the year, citing potential momentum from increased infrastructure spending.
However, experts caution that a continuous downturn could threaten the narrow margin above the World Bank's income threshold. The Philippines was recently classified as a UMIC after reaching a GNI per capita of $4,850, only $214 above the World Bank's benchmark.
Ateneo economist Ser Percival K. Peña-Reyes pointed out that while the classification itself may be secure, the implications for everyday Filipinos must be scrutinized. He stressed that income distribution and the quality of life must improve alongside economic metrics.
Marco Antonio C. Agonia from the University of Asia and the Pacific noted that maintaining UMIC status does not inherently indicate economic health or improved living standards for the population.
As the economy faces potential headwinds, the government must continue its efforts to ensure that economic growth translates into tangible benefits for its citizens.