The Philippines is just shy of US$26 from reaching the upper-middle-income threshold, Batangas 6th District Rep. Ryan Recto said.
During the House Committee on Appropriations hearing on August 18, the lawmaker reiterated that the country is on the verge of becoming an upper-middle-income country by 2025. Despite this, the country’s gross national income (GNI) per capita fell short of the requirements to reach the specific class.
“Despite this increase in GNI [per] capita, the country was just shy of US$26 from reaching this threshold. Madam Chair, we are still a lower-middle-income country. We fall in the range of US$1,136 to US$4,495,” Recto said.
“Sayang po, muntikan na po itong ma-classify as upper middle income sa bansa US$26 lang po ang pagitan,” he added.
Department of Finance (DOF) Secretary Ralph Recto jokingly replied, “Huwag kang manghinayang, aabutan natin [‘yan] sa taong ito. At kung marami ka pang tanong sa akin lalabanan kita sa distrito.”
This seemingly lighthearted rebuttal drew laughs from the House chamber, prompting the solon to commend the economic team and the administration for the significant feat.
Meanwhile, the Batangas 6th District representative asked specific economic strategies to be implemented by the agencies concerned to generate the necessary growth in GNI per capita.
Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio Balisacan assured that the country is very likely to achieve the target status within the year, but will, however, not see it until July of next year. He explained this is because the World Bank is set to release its report in the middle of 2026.
“What will it take for us to achieve that? Growth. We need to keep growing. In our growth target for this year, we are expecting 5.5% to 6.5% and in the next year, 6% to 7%. We don’t think, with the BSP here, that the peso will depreciate that much,” he explained.
“We don’t think that our inflation will be significantly higher than the rest of the world. Because those are the factors that can influence our migration to the upper middle-income class,” he added, enumerating the factors like growth rate, exchange rate, and the country’s relative inflation to the rest of the world.
In contrast, Secretary Recto explained that the target growth also has its downsides, spotlighting that the cost and interest are more than likely to increase as the country migrates from being a lower-middle-income country.
The borrowing cost goes up for upper-middle-income countries, Recto said.
“Second, the way you calculate poverty incidence changes. Because today, we calculate it at US$4.20 a day per individual. If you become an upper-middle-income, the threshold becomes US$8.40 [of] the poverty threshold,” he added.
