{"id":18607,"date":"2026-07-06T22:46:25","date_gmt":"2026-07-06T14:46:25","guid":{"rendered":"https:\/\/www.ibon.org\/?p=18607"},"modified":"2026-07-06T22:47:06","modified_gmt":"2026-07-06T14:47:06","slug":"upper-middle-income-lower-end-reality","status":"publish","type":"post","link":"https:\/\/www.ibon.org\/tl\/upper-middle-income-lower-end-reality\/","title":{"rendered":"Upper middle-income, Lower-end reality"},"content":{"rendered":"

The World Bank has officially reclassified the Philippines as an \u201cupper middle-income country\u201d (UMIC), prompting celebration from government officials and many commentators. It\u2019s played up as an important milestone, and as recognition of the country’s economic progress. But what does the reclassification actually mean? More importantly, what does it not mean? The answers are much less impressive than the official narrative suggests.<\/p>\n\n\n\n

Unfortunately, the World Bank\u2019s bumping the Philippines into its UMIC classification isn\u2019t really a big deal. Before anything else, what does the classification mean even on its own terms? The Philippines\u2019 US$4,850 gross national income (GNI) per capita squeaks us into the lower end of the Bank\u2019s UMIC category. (See chart)<\/strong> Development isn\u2019t a competition. But for those a little bit fixated on country comparisons, the Philippines ranks 130th<\/sup> out of 201 countries\u2014putting us among the poorest one-third of countries in the world.<\/p>\n\n\n\n

CHART. <\/strong>GNI per capita, 2025 or latest available year (Atlas method, current US$)<\/p>\n\n\n\n

\"\"<\/a>
SOURCE: <\/strong>World Bank<\/figcaption><\/figure>\n\n\n\n

The Philippines\u2019 GNI per capita is 20 times that of lowest-ranked Burundi at US$240, but it\u2019s also just one-thirtieth of top-ranked Bermuda\u2019s US$139,370\u2014confirming that we\u2019re much closer to the lowest end of country income levels than the highest.<\/p>\n\n\n\n

The Philippines is literally below average\u2014our GNI per capita is just one-third of the global average (US$14,244).<\/p>\n\n\n\n

None of this is to disparage the Philippines\u2014but all of it is to puncture the exaggerated narrative around the UMIC status. President Ferdinand Marcos Jr, his executive secretary, and his finance and planning secretaries have presented the reclassification as validation of their economic policies. The World Bank, meanwhile, has likewise framed it as a positive milestone despite longstanding criticisms of its policy advice and lending conditionalities that contributed to weakening the country’s productive sectors.<\/p>\n\n\n\n

The official storyline is that the statistical reclassification is evidence that government policy is working, that the economy is fundamentally strong, and that ordinary Filipinos are poised to benefit.<\/p>\n\n\n\n

This is a highly imbalanced presentation. The underlying rhetorical move exaggerates GNI per capita as evidence about the overall state of the economy and of people\u2019s living conditions. But so many have justifiably already contested this on the basis of their daily lived experiences.<\/p>\n\n\n\n

The overwhelmingly celebratory narrative gives comparatively little attention to severe economic problems of poverty and inequality. It even spins things as, basically, \u201cwe\u2019ve grown the pie and now it\u2019s time to distribute it.\u201d This trickle-down idea is long-discredited and obsolete. It\u2019s more accurate to say that \u201cthe pie\u2019s growing slowly because our recipe sucks, and we still won\u2019t share the small pie more equally.\u201d<\/p>\n\n\n\n

There have been disagreements about how IBON Foundation calls out UMIC as not a measure of progress, while agreeing that GNI per capita is a narrow metric of development.<\/p>\n\n\n\n

But the World Bank\u2019s country classifications really aren\u2019t meant to measure progress. From the beginning, they were designed as a simple standardized way to classify<\/a> countries for the Bank\u2019s operational purposes. Particularly, this is for determining eligibility for concessional lending and its other development finance tools.<\/p>\n\n\n\n

Nonetheless, can the arithmetical result still be used as a measure of progress? Maybe, if it didn\u2019t conceal more than it revealed.<\/p>\n\n\n\n

In the Philippines\u2019 case it does conceal a lot. And it\u2019s not just about averages hiding inequality, of which much has already been said.<\/p>\n\n\n\n

It\u2019s how GNI per capita hides economic growth coming from wage repression, irregular low-paying informal work, and scrimping on environmental protections. Or from corruption-driven infrastructure spending. Or from other government spending that is increasingly debt-driven because taxes are cut on large companies and wealthy families, while more tax revenues are squeezed from the poor and middle class.<\/p>\n\n\n\n

And how GNI per capita trends hide manufacturing falling to its smallest share of the economy in nearly 80 years\u2014especially since the World Bank\u2019s US$200 million \u201cindustrial development\u201d structural adjustment program in 1980\u00b1and agriculture to its smallest in the country\u2019s history. As well as how the resulting job scarcity drives millions of Filipinos abroad for work, boosting GNI with their earnings overseas.<\/p>\n\n\n\n

Does a Top 1,000 company’s soaring profits reflect its employees’ wages, working conditions, and welfare? Maybe sometimes in a good way, but much more often likely in a bad way. <\/p>\n\n\n\n

This episode of UMIC overhype shows how the government’s presentation of the economy gives disproportionate emphasis to a favorable statistical reclassification while giving comparatively little attention to the country’s persistent structural weaknesses. It also underscores why independent analysis remains important\u2014not to dismiss positive developments, but to place them in their proper context and contribute to a more balanced public discussion.<\/p>","protected":false},"excerpt":{"rendered":"

The UMIC overhype shows how the government’s presentation of the economy gives disproportionate emphasis to a favorable statistical reclassification while giving comparatively little attention to the country’s persistent structural weaknesses. <\/p>","protected":false},"author":13,"featured_media":18610,"comment_status":"open","ping_status":"open","sticky":false,"template":"single-nosidebarbanner.php","format":"standard","meta":{"_acf_changed":false,"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":"","_expiration-date-status":"","_expiration-date":0,"_expiration-date-type":"","_expiration-date-categories":[],"_expiration-date-options":[]},"categories":[1,2048,2050,3],"tags":[3693,2972,116,4432,3057,3056,126],"acf":[],"_links":{"self":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/18607"}],"collection":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/comments?post=18607"}],"version-history":[{"count":5,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/18607\/revisions"}],"predecessor-version":[{"id":18617,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/18607\/revisions\/18617"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/media\/18610"}],"wp:attachment":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/media?parent=18607"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/categories?post=18607"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/tags?post=18607"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}