Philippines on the rise: How close are we to upper middle-income status?

Manila: The race is on — and the finish line is getting closer. 

The Philippines is gunning to become an upper middle-income country (UMIC) by late 2025 or 2026.

It’s more than just a bragging right. It's about making lives better for the 114 million or so inhabitants of the archipelago made up of 7,641 islands.

Game-changer

It’s a potential game-changer.

The nation has had a decades-long quest to deliver a stable, comfortable, and secure life — “matatag, maginhawa, at panatag na buhay” — for every Filipino.

For decades, it seemed a moonshot. Now, it's within reach. And the numbers show.

What’s UMIC anyway?

According to the World Bank, a country needs a Gross National Income (GNI) per capita of at least $4,516 to join the UMIC club. 

The Philippines currently sits at $4,230 (2023), just a short jeepney ride away from the mark. 

Crossing the threshold

But crossing that threshold means more than just numbers — it’s a passport to better opportunities, global confidence, and, hopefully, fewer Filipinos left behind.

Here’s why it matters

Reaching UMIC status opens new doors:

But this isn’t just a matter of GDP.

Challenges

These are the key targets:

In short: Efficient governance, fairer rules, and ensure no one gets left behind.

The poverty-corruption nexus

Despite significant progress made under the 1987 Constitution, generational poverty haunts the country.

This is especially so in rural areas, among informal settlements, and indigenous communities. 

Problems like poor education access, underemployment, weak social safety nets, corruption and political patronage create a vicious cycle. 

The poor bear the brutality of corruption. In many provinces, many elected positions are held by a single clan. This is problematic, shows a recent study.

Research conducted by Ateneo de Manila and published in 2024 indicates a strong correlation between dynasties and theft of public funds.

How correlation was tested

To test how (A) corruption relates to (B) concentration of political power, the researchers used data from public procurement contracts (2004–2018).

Then, for each province, the method synthesised data into a "corruption risk indicator (CRI)".

Findings

When political power is concentrated (based on the number of positions held by a single clan in a province) both A and B are significantly and positively correlated with corruption risk.

So if the Asian country wants to level up, it can’t just grow fast — it has to grow fairly. Political structures need urgent reform.

The electorate needs to level up and know: they chart their own destiny through the ballot.

Peace doesn't come cheap

Here’s the key point: there's no progress without peace. 

Academic studies (Bernstein & Heredia, 1989; Sacdalan, 2020) confirm that insurgencies — like the decades-old communist (1969) and Moro separatist (1972) rebellions — have hampered growth by scaring off investors, disrupting communities, and draining public resources. 

A whole-of-nation drive to resolving conflicts through dialogue and rural development work clears the path for investments, education, and human capital to thrive.

This is being carried out, i.e. through National Task Force to End Local Communist Armed Conflict (NTF-ELCAC) the Bangsamoro peace process.

Programs like the Barangay Development Program (BDP) bring roads, schools, health stations, and livelihood support to remote areas once influenced by the communist New People’s Army (NPA).

Prioritising disarmament, demobilisation, and reintegration (DDR), also solves multiple problems at once.

For example, while ex-Moro rebels are gradually being decommissioned and provided with economic packages, it also builds trust in historically neglected or conflict-hit communities.

NTF-ELCAC supports former communist rebels through the Enhanced Comprehensive Local Integration Programme (E-CLIP), offering cash, livelihood/training aid, and psychosocial support.

Both processes are not easy, but necessary.

Rome wasn't built in one day: significant achievements require time and effort.

They entail hard work, dialogue, cultural sensitivity, and consultations.

Going back to the flipside (war and brutalisation of communities) is a non-starter, unless the country only seeks mutually-assured despair.

Red-tagging and over-reach

A major concern: red-tagging of activists, journalists, and civil society groups. This undermines trust, alienates communities, and contradicts the whole-of-nation peace narrative.

Key: The NTF-ELCAC has made great strides in shifting from a militarised to a development- and dialogue-based approach to conflict resolution.

It needs more safeguards against abuse and stronger accountability mechanisms. In short: It needs to be guided by the light of truth, not propaganda, vile hatred, thirst for blood, or self gratification by people tasked to implement the programme.

What needs to happen?

The bigger picture

The Philippines already offers free education up to university level, which is awesome. Matching the needs of the industry, especially manufacturing, and what universities teach needs a strong resolve. 

This could mean: continued cost-of-living subsidies for the marginalised (like what both the UK and Singapore are doing). In some sense, the Philippines is already doing this through conditional cash transfer. It needs to be made more efficient.

In urban areas, it would rolling high-rise living for the low-income residents, i.e. to clear the Manila’s squatter colonies, or "informal settlers" (IS), via public-private partnerships. Freed up land could be sold to finance IS development, and solve urban blight.

Begin with the end in mind

UMIC isn’t the finish line — it’s a stepping stone to a much bigger dream: becoming a high-income nation, and breaking free from decades of being caught in a vicious cycle.

If the Philippines pulls this off, it won’t just be a milestone on a spreadsheet. 

People would find themselves with renewed hope, building lives and creating opportunities at home, instead of halfway across the world.

Let faint voices be heard and governance be fair, so our people displaced by toil and strife can lift each other up. Peace and plows — not endless wars, brethren killing brethren — set nations free.