The good news is that the Philippines can hope to achieve upper-middle-income country status by 2025, or two years from now.
The news was relayed to media last week by Socioeconomic Planning Secretary and concurrent Director General of the National Economic and Development Authority Arsenio Balisacan.
The original target was 2024, as announced by President Marcos Jr. in his first State of the Nation Address last July. He even told the United Nations General Assembly in September that the country was on track in reaching a higher income status by 2023.
However, Balisacan said the country suffered setbacks, such as the sharp contraction of the economy in 2020 and the sharp depreciation of the peso this year, sinking to a record low of 59:$1 in October.
The Philippines is currently classified as a lower-middle-income economy by the World Bank. Our latest gross national income per capita rose from $3,430 in 2020 to $3,640 in 2021.
GNI refers to the total income generated by a country’s residents within and outside its borders.
The latest GNI of the country still fell short of the World Bank’s new GNI per capita threshold.
The new thresholds for GNI per capita for 2022-2023 are: $1,085 or less for low-income countries; $1,086 to $4,255 for lower-middle-income countries; $4,256 to $13,205 for upper-middle-income countries; and $13,205 and higher for high-income countries.
Hence, by 2025, our GNI per capita will be at a minimum of $4,256 or P242,592 per annum (at the current P57:$1) and as high as $13,205, which is equivalent to P752,685.
The NEDA chief also told media that he fully supports the proposed Maharlika Investment Fund as this would help sustain economic growth.
He described the MIF as “a complementary vehicle to help us attain the objective of rapid but inclusive and sustainable economic development.”
The MIF can bankroll infrastructure projects, particularly logistics and transportation networks critical to supply chains, especially for the agriculture and manufacturing sectors:
“Investments in key infrastructure projects will be supported by innovative finance…With sufficient governance safeguards to ensure the fund’s sustainability and responsible management, the proposed Maharlika Investment Fund will help support our country’s infrastructure development.”
Infrastructure development is actually part and parcel of the Philippine Development Plan 2023-2028 already approved by the Marcos administration.
The PDP aims to increase gross domestic product growth and reduce inflation, the unemployment rate, and the country’s poverty incidence, among others.
These are positive developments in the economic front that indicate better times ahead in 2023 and beyond.