Philippines Upgraded to Upper-Middle-Income Country; Taiwanese Businesses Suggest Shifting Investment Focus to Domestic Consumption

(Central News Agency, reporter Lin Xingjian, Manila, July 2nd) The World Bank recently upgraded the Philippines from a "lower-middle-income country" to an "upper-middle-income country." Taiwanese businesses operating in the Philippines believe this signifies a simultaneous increase in wages and purchasing power, suggesting that Taiwanese companies can gradually adjust their investment strategies.

The World Bank announced its latest country income classifications on its blog on the 1st. The Philippines' gross national income (GNI) per capita for 2025 reached US$4,850, surpassing the upper-middle-income threshold of US$4,636, and higher than the US$4,470 in 2024.

Philippine President Ferdinand Marcos Jr. announced on social media today that after nearly 40 years of effort, the Philippines has joined the ranks of upper-middle-income countries. "This milestone reflects the hard work of the Filipino people and the government's commitment to implementing policies that create more jobs, attract more investment, and build a stronger economy for every family."

Every year on July 1st, the World Bank updates economic classifications based on the previous year's GNI estimates. There are four income levels: low-income, lower-middle-income, upper-middle-income, and high-income. The latest annual assessment covers 218 countries.

The World Bank stated that the Philippines' reclassification is primarily due to broad-based economic expansion. "Over the past five years, the Philippines' gross domestic product (GDP) has grown by an average of 5.8% annually, with momentum driven by all major industries, not by a single sector, but by an overall economic improvement."

The World Bank upgraded a total of five economies from "lower-middle-income" to "upper-middle-income" countries. In addition to the Philippines, these include Vietnam, Jordan, Sri Lanka, and Micronesia. Togo was upgraded from low-income to lower-middle-income.

The Philippines had been in the "lower-middle-income" category for a long time since 1987. Last year, it was only US$26 short of the upgrade threshold. At that time, the upper-middle-income threshold set by the World Bank was US$4,496.

With the Philippines' promotion to an "upper-middle-income country," Chairman of the Subic Bay Taiwanese Chamber of Commerce, Chang Che-chia, pointed out that labor wages will continue to rise, but the public's purchasing power will also increase. Taiwanese businesses' future investment strategies in the Philippines can gradually shift from manufacturing bases to the domestic consumption market.

On the other hand, Chang Che-chia analyzed that the increase in income for the Philippine population may weaken the willingness of laborers to work abroad. Taiwanese factories may face greater difficulty in recruiting Filipino migrant workers in the future and may need to seek labor sources from other Southeast Asian countries.

Chang Che-chia also mentioned that the increased purchasing power of the Philippine population will enable more people to afford overseas travel, which will also be beneficial for Taiwan's tourism industry. (Editor: Tang Shengyang) 1150702

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