THE government on Thursday said the country’s reclassification by the World Bank as an upper-middle-income economy would create more jobs, attract investments and expand opportunities for Filipinos, but labor groups challenged it to show that the newly attained status would benefit ordinary Filipinos by supporting higher wages.
The Philippines was among five economies that moved from lower-middle to upper-middle-income status this year, joining Jordan, Micronesia, Sri Lanka and Vietnam.
In a statement, Executive Secretary Ralph Recto said the new classification is not just a title, but proof that the country’s economy is continuing to improve.
“More jobs are being created, the income of our fellow citizens is increasing and more investors are placing their trust in the Philippines,” he said in Filipino.
The World Bank reclassified the Philippines as an upper-middle-income economy after the country’s gross national income (GNI) per capita reached $4,850 in 2025, per estimates made by the Department of Economy, Planning and Development (DEPDev), surpassing the institution’s upper-middle-income threshold of $4,636.
GNI per capita measures the economic output per citizen, consisting of both domestic and international earnings. A higher GNI per capita ranging from $4,516 to $14,005. The Philippines had remained a lower-middle-income economy since 1987 before its latest reclassification.
The World Bank said the country’s ascent to upper-middle-income status was driven by broad-based economic growth, with the Philippine economy posting an average annual gross domestic product growth of 5.8 percent over the past five years.
“The true measure of success is whether every Filipino family feels it. That is why we will not stop until more Filipinos rise out of poverty and their lives become easier,” Recto said.
Stop blocking wage legislation
But the Trade Union Congress of the Philippines (TUCP), the biggest confederation of labor groups, said the government should stop blocking proposals for a legislated wage increase and instead ensure that the gains of economic growth reach more than 5 million minimum wage earners and millions of other low- and middle-income workers.
The challenge came after the DEPDev announced the change in the country’s status.
DEPDev Secretary Arsenio Balisacan said the development reflects the resilience of the Philippine economy, citing sustained growth, sound macroeconomic management and structural reforms.
Balisacan, however, acknowledged that income disparities remain and that many Filipinos continue to face economic hardship despite the country’s economic progress.
TUCP argued that the new classification rings hollow for workers who continue to struggle with rising costs and stagnant incomes.
“We cannot celebrate being an upper-middle-income country while millions of Filipino workers continue to live on low wages,” the labor group said.
The federation also criticized what it described as the government’s long-standing opposition to a legislated wage hike, noting that no nationwide legislated increase has been enacted in nearly four decades.
According to TUCP, economic growth cannot be considered inclusive if wealth continues to be concentrated among the richest sectors while many workers and poor families are left behind.
The group pointed out that minimum wages across the country remain far below the reported national income level, with daily pay ranging from P411 in the Bangsamoro region to P780 in Metro Manila beginning next year.
By comparison, TUCP noted that the country’s reported GNI per capita translates to roughly P820 a day, highlighting what it described as the disconnect between economic indicators and workers’ actual earnings.
With only two years left in the Marcos administration, TUCP urged the government to move beyond acknowledging inequality and take concrete steps to raise wages and improve the lives of Filipino workers, warning that economic milestones mean little if they fail to translate into tangible benefits for ordinary families.
Vote of confidence
President Ferdinand Marcos Jr., who was in Canada for an official visit, on Thursday welcomed the Philippines’ attainment of upper-middle-income status, saying the milestone is a “vote of confidence in our country’s future.” In a video message, Marcos said the new classification reflected the effectiveness of economic policies and reforms implemented over the past four years.
“For years, Filipinos have worked hard to build this country. Today, the world has taken notice. The Philippines has officially become an upper-middle-income country,” Marcos said.
“After nearly four decades as a lower-middle-income country since 1987, this milestone affirms that the economic policies we have pursued over the past four years have been effective,” he added.
Marcos said that the Philippines’ steady economic growth, broadly stable currency and long-term reforms have strengthened our economy even amid global uncertainties.
He also said that it validated the progress we have made and the resilience of the Filipino people.
“It is also a vote of confidence in our country’s future. Greater confidence means more investments. More investments mean more businesses, better quality jobs and more opportunities for Filipino families,” Marcos said. “This is worth celebrating because economic progress is not meant to stay on paper. It is meant to open doors, put food on the table and give every Filipino the chance to build a better life,” he added. Marcos said the administration would continue implementing policies aimed at ensuring that the gains from economic growth are felt by Filipinos.
“That is the work we will continue to do until every family feels the benefits of our country’s progress,” he said.
Govt priorities
To sustain economic growth, Recto said the administration will continue efforts to tame inflation, protect jobs, strengthen consumers’ purchasing power, boost business confidence and attract more investments.
He said the government will accelerate the implementation of major infrastructure projects in the second half of the year, continue rolling out the targeted Unified Package for Livelihoods, Industry, Food and Transport program to cushion the effects of the hostilities in the Middle East, efficiently implement the 2026 national budget and finalize a responsive spending plan for 2027.
The administration will also pursue and implement reforms to improve the ease of doing business, expand digital connectivity, enhance education and workforce skills, and strengthen resilience against climate-related risks and external shocks, Recto added.
As the Philippines transitions to upper-middle-income status and gradually relies less on concessional financing, Recto said the government will expand the use of public-private partnerships, deepen domestic capital markets and tap market-based financing sources to sustain infrastructure and development investments.
He did not mention the drive for higher wages, however.
With the upgrade, the Philippines joins regional upper-middle-income economies such as China, Malaysia, Thailand, Indonesia and Vietnam.
