The World Bank announced on July 1 that the Philippines is now officially an upper-middle income country (UMIC), ending the country's classification as lower middle income that had persisted since 1987. The reclassification occurred because the Philippines' gross national income (GNI) per capita reached $4,850, surpassing the new upper middle income threshold of $4,636. The Philippines had been stuck in the lower middle income category for nearly four decades before achieving this economic milestone.
World Bank Sets Income Classification Threshold at $4,636
Every July, the World Bank sorts economies into four income groups based on their GNI per capita, converted to US dollars using a three-year average of exchange rates. In 2025, the upper middle income cutoff was set at $4,636. Last year, the Philippines' GNI per capita of $4,470 fell $26 short of the threshold, missing the classification by 0.6%. This year, the Philippines cleared the threshold by $214, or 4.6%.
Philippines Achieves $4,850 GNI Per Capita in 2025
The Philippines' GNI per capita works out to roughly P23,000 per person per month. The Department of Economy, Planning, and Development (DEPDev) called it a "historic economic milestone," crediting sustained growth and long-term reforms. President Ferdinand Marcos Jr., speaking from an official visit in Canada, called it a "vote of confidence in our country's future" that will attract more investments. Finance Secretary Frederick Go stated that the new status means Filipinos have increased their per capita wealth.
Vietnam Crosses Upper-Middle Income Threshold with $4,970 GNI
Vietnam also crossed the upper-middle income threshold this year. Vietnam's GNI per capita of $4,970 beat the cutoff by 7.2%. The World Bank noted that other countries crossing income thresholds this year included Sri Lanka, which returned to upper middle income status following its rebound from the 2022 crisis, and Micronesia, which achieved the status via construction and agriculture.
Philippines Records 2.8% Growth in First Quarter 2026
In the first quarter of 2026, the Philippines grew at 2.8%, while Vietnam grew by 7.83%. The Philippines' debt-to-GDP ratio stands at 65%. As a new upper-middle income country, the Philippines can expect to gradually lose access to preferential rates on concessional loans and official development assistance. In ASEAN, only Singapore and Brunei have earned high income status.
FAQ
What is the World Bank's upper-middle income threshold for 2025?
The World Bank set the upper-middle income threshold at $4,636 for 2025. Countries with GNI per capita above this amount are classified as upper-middle income countries.
How much did the Philippines' GNI per capita increase from last year?
The Philippines' GNI per capita increased from $4,470 last year to $4,850 this year, representing an increase of $380 and clearing the upper-middle income threshold by $214.
Which other ASEAN countries have high income status?
In ASEAN, only Singapore and Brunei have earned high income status according to World Bank classifications.
