THE Philippines has officially been reclassified as an upper-middle income economy by the World Bank.
In a statement, the Department of Economy, Planning, and Development (DEPDev) said the country’s inclusion to the list marks a major milestone, which reflects the country's sustained economic growth, resilience and years of structural reforms.
In its latest income classification released on Wednesday, July 1, 2026, the World Bank placed the Philippines in the Upper-Middle Income Country (UMIC) category after the country's gross national income (GNI) per capita reached US$4,850 in 2025, surpassing the US$4,636 threshold required for the new classification.
DEPDev Secretary Arsenio Balisacan said the upgrade affirms the country's ability to sustain economic growth despite facing both global and domestic challenges in recent years.
“Despite global and domestic shocks, we have relentlessly pursued inclusive growth, strengthened fundamentals, and remained on track with our development agenda,” Balisacan said.
The country's improved income status was driven by robust economic performance over the past five years.
From 2021 to 2025, the Philippine economy posted an average gross domestic product (GDP) growth of 5.8 percent, while strong expansion across major industries helped increase GNI per capita by 8.5 percent in 2025.
According to DEPDev, the new classification is expected to enhance the Philippines' investment appeal by improving its credit profile and boosting investor confidence.
It said the upgrade could also widen the country's access to financing and attract higher-quality investments capable of generating better-paying jobs for Filipinos.
While the transition may eventually reduce the country's eligibility for some concessional Official Development Assistance (ODA), Balisacan said the benefits of stronger economic fundamentals and improved access to capital markets are expected to more than offset any decline in development financing.
"We welcome this recognition of our progress and we commit to deepen reforms to sustain our economic development," he said.
Balisacan also credited overseas Filipino workers (OFWs) for contributing to the country's achievement, noting that their earnings abroad form part of the computation of the Philippines' gross national income.
“Our OFWs have played an important role in reaching this milestone. At the same time, our long-term goal is to create more high-quality jobs at home so overseas employment becomes a choice, not a necessity,” he added.
Despite the milestone, Balisacan acknowledged that significant challenges remain, particularly in addressing income inequality and ensuring that the gains from economic growth are shared more broadly.
He said the government's priority is to make growth more inclusive so that more Filipinos benefit from the country's economic progress.
The Philippines' elevation to upper-middle income status also comes as it assumes the chairmanship of the Association of Southeast Asian Nations (Asean) in 2026, a role that the government expects will further strengthen regional partnerships and promote the country as an attractive destination for trade and investment.
The World Bank's income classification is updated annually based on a country's gross national income per capita and is widely used as an indicator of economic development and lending eligibility. (TPM/SunStar Philippines)