By Luisa Maria Jacinta C. Jocson, Reporter
THE PHILIPPINES is on track to becoming an upper middle-income country in the next few years, the World Bank (WB) said.
“With continued recovery and reform efforts, the country is getting back on track on its way from a lower middle-income country with a gross national income (GNI) per capita of $3,640 in 2021 to an upper middle-income country in the short term,” the multilateral lender said on its website.
According to the World Bank, an upper middle-income country has a per capita income range of $4,256-$13,205.
The Philippines is currently classified as a lower middle-income country by the World Bank, with a GNI per capita at $3,640 or about P202,000 in 2021.
A lower middle-income status means having a GNI per capita from $1,086 to $4,255.
The World Bank has yet to release the latest country classification ranking for 2022.
The Philippines has been classified as a lower middle-income country since 1987, which is the earliest available data from the World Bank.
The Marcos administration is targeting to reach upper middle-income status by 2025.
“The Philippines has been one of the most dynamic economies in the East Asia and Pacific region. With increasing urbanization, a growing middle class, and a large and young population, the Philippines’ economic dynamism is rooted in strong consumer demand supported by a vibrant labor market and robust remittances,” the World Bank added.
The Philippine economy grew by 7.6% in 2022 from 5.6% in 2021.
Economic managers are targeting 6-7% gross domestic product (GDP) expansion this year.
SLOW POVERTY REDUCTION
In a separate report, the World Bank said the Philippines is struggling to reduce poverty.
“Despite over a decade of progress in inequality reduction, the Philippines has one of the highest Gini coefficients in East Asia and the Pacific,” the multilateral lender said in its latest Poverty and Equity Brief.
In 2021, the Philippines’ Gini coefficient was at 40.7.
The Gini coefficient is used to measure income distribution, where a coefficient of zero means that wealth is perfectly distributed, while a higher number indicates inequality.
According to the World Bank, the coronavirus disease 2019 (COVID-19) pandemic “interrupted” over 30 years of poverty reduction progress in the country.
“While inequality did not seem to have increased in the immediate aftermath of COVID-19, the longer-lasting effects of the crisis on human capital development, food insecurity and shifts to less productive jobs and sectors, which disproportionately affected poor and vulnerable households, may widen inequality in coming years,” it added.
However, the World Bank did note the improvement in labor force participation, low unemployment, and the surge in home-based or flexible work arrangements which it said will also help accelerate poverty reduction.
Data from the local statistics authority showed that poverty incidence among individuals jumped to 18.1% in 2021, from 16.7% in 2018. In 2021, the number of Filipinos living in poverty rose by 2.322 million to 19.992 million.
In its latest Macro Poverty Outlook, the World Bank noted that economic and labor market recovery will support poverty reduction efforts in the Philippines.
“Poverty incidence (in the Philippines) using the World Bank’s poverty line for lower middle-income countries of $3.65 a day, 2017 purchasing power parity (PPP) is projected to decrease from 17.8% in 2021 to 13.8% in 2023 and further decrease through 2025,” it said.
“However, these projections could be tempered by higher-than-expected inflation. The increase in household incomes brought by the gains in the labor market are offset by the persistent high prices particularly of food and energy, especially among poor households,” it added.
The government is aiming to reduce the poverty incidence rate to 16.4% this year, 13.2% by 2025, and 9% by 2028.
PHL ‘on track’ to become an upper middle-income country, says WB
Source: Bantay Radio
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