The Philippines is on track to achieve upper-middle income status next year, provided it meets its economic growth targets, according to National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan, speaking on Friday.

“We have a good chance of attaining upper middle-income country (UMIC) status in 2025,” Balisacan commented at the year-end briefing held at the NEDA office in Mandaluyong City.

The World Bank classifies economies as upper-middle income if their GNI per capita falls between $4,516 and $14,005 for the fiscal year 2025. 

GNI per capita reflects the economic output per citizen, including both domestic and international income. 

As of the end of 2023, the Philippines' GNI per capita stood at $4,230, SunStar reports.

To achieve UMIC status, Balisacan said that the Philippines must meet its growth target for this year and sustain its growth trajectory into 2025.

He also highlighted the importance of the Peso not weakening significantly against the currencies of the country’s trading partners. 

Balisacan remains optimistic that the government will still meet the 6% lower end of its growth target for this year.

The Philippine economy grew at an average rate of 5.8% during the first three quarters of 2024.

“We remain optimistic about the fourth-quarter economic performance. Holiday spending, more stable commodity prices, and a robust remittance inflow and labour market give us confidence that our 6.0 to 7.0% growth target is still achievable,” Balisacan stated.

However, he pointed out that the recent series of typhoons that struck the country had a significant impact on the agriculture sector.

“On the other hand, the positive forces could outweigh those developments in the agriculture sector,” he added.

Furthermore, Balisacan stated that the Bangko Sentral ng Pilipinas' decision to reduce policy rates by a cumulative 50 basis points and lower reserve requirements is expected to boost private spending, especially on major consumer items, as well as investments in capital-intensive infrastructure in the upcoming quarters.

“This move will support economic growth by making borrowing more affordable for businesses and consumers,” he said.

He added that easing inflation, a strong labour market, and the continued growth in remittances will also contribute to boosting economic growth.