MANILA - The Philippines could fall short of its goal of becoming an upper-middle-income country this year due to various challenges including the COVID-19 pandemic, Socioeconomic Manager Karl Kendrick Chua said Thursday.
In February, Chua said the country was "on track" to become an upper-middle-income country this year, but on Thursday he said this might be pushed back to 2023 as the pandemic reduced jobs for overseas Filipinos.
Remittances from overseas Filipino workers contribute to the gross national income (GNI) on which the rating is based, Chua said during the first quarter economic briefing by the Philippine Statistics Authority.
"Because there are close to a million OFWs that are repatriated back so they’re not earning. That impacts our net primary income so we have see," Chua said.
An upper-middle-income country has a gross national income (GNI) per capita between $4,096 and $12,695, according to the World Bank.
"I think we might not see it this year given the developments but I’m hoping that we can see that transition in 2023," he added.
During the pandemic, the government initiated repatriation flights to bring back Filipinos who lost their jobs abroad.
COVID-19 has also slightly tempered gains in terms of poverty reduction, Chua earlier said.
Other factors include the peso-dollar exchange rate as well as any changes in the World Bank's criteria for an upgrade or downgrade, Chua said.
The Philippine economy expanded by 8.3 percent in the first quarter compared to a negative 3.8 percent growth rate last year, reflecting an improved health system that enabled further reopening, Chua said.