TODAY, Oct. 29, 2026, The Manila Times is holding its end-of-year economic forum — an annual event that normally coincides with the anniversary of our founding as the oldest daily newspaper in the Philippines — on the theme, “Beyond UMIC: Locking in on sustainable, equitable growth.” UMIC, of course, means “upper-middle-income country,” a status that the Philippines achieved a couple of months ago, according to the metrics of gross national income per capita monitored by the World Bank.
The Philippines has been working toward this statistical benchmark for more than two decades, across several administrations, and it is fairly considered a positive achievement. When it finally happened in July of this year, the “upgrade” in the country’s economic status was hailed by the current administration as the potential dawn of a new era of growth and prosperity. That was not unexpected; any administration would have done the same thing, because even at the bare minimum, the UMIC designation indicates real economic growth over time for the country.
In our forum today, we anticipate that our esteemed roster of speakers will highlight the advantages the newly achieved UMIC status can bring to the Philippines. Some of these include a broadening of the Philippines’ profile for potential investors, whether in financial instruments (such as our government-issued bonds) or in physical projects; broader markets and expanded access to investments for our domestic enterprises; and, although perhaps only a modest extent, a somewhat higher geopolitical profile for the Philippines, as it has graduated from the group of perpetual beneficiaries of foreign aid for basic functions.
Of course, we are not unaware of the irony that our discussion today about what comes next after achieving UMIC status is happening under circumstances in which most economic indicators are rather discouraging. The peso this week hit an all-time low in value against the US dollar, exceeding the P64 to $1 level. Headline inflation, something that everyone feels directly when purchasing basic necessities, has exceeded 7 percent. And even the UMIC designation masks a profound economic inequality in the country: According to World Bank data retrieved this week, 83 million Filipinos, or about 70 percent of the population, have daily incomes below $8.30, which is the threshold needed to meet the UMIC benchmark; that means, of course, that the income of the top 30 percent makes such an outsized contribution as to pull up the entire national average.
And in other disheartening news, there have been warnings from the Department of Energy this week, most of whose officials are attending the Singapore International Energy Week, that the anticipated higher temperatures and drought conditions from the El Niño phenomenon are likely to lead to higher power bills. This will not only have an undesirable direct impact on consumers, but will also increase price inflation pressures generally due to making the manufacture and transport of goods more expensive.
In short, even though the Philippines has now officially achieved the UMIC status, it has diligently sought for so long, almost no one here would say that it actually feels like it.
There are, however, some bright spots, and it is on these that the Philippines can perhaps build toward the future of “sustainable, equitable growth” that we all want. First, despite income inequality, poverty has been decreased in real terms and continues to decline. Second, our financial system, despite what a declining peso and less-than-impressive stock market might indicate, remains solid, with safe and manageable debt, and capitalization levels. And even though some may consider it a “late adopter” disadvantage, we are not yet significantly at risk from an overheated “AI” (artificial intelligence) economy, which has been increasingly showing signs of instability as of late. As just one example of that, Reuters on Monday reported that mainland China’s STAR50 index, which is dedicated to AI and technology stocks, and accounts for about 42 percent of China’s market capitalization, has lost 40 percent of its value, equivalent to about $480 billion, in just four months.
While we may not be experiencing encouraging economic conditions at present, certainly not conditions befitting an UMIC, our position may very well mean that, if we can weather the current storm, other broad risks such as the aforementioned potential for a bursting of the AI “bubble” may pass us by. Thus, some long-term understanding and planning, such as we will hear today from the economic experts who have gathered for our forum, will be both necessary and productive for the country.
