MANILA — The Philippines appears to be on track with its goal of becoming an upper-middle-income country, World Bank Senior Economist Ralph van Doorn said on Wednesday.
An upper-middle-income country has a gross national income (GNI) per capita of between $4,096 and $12,695, according to the World Bank.
"We do expect the Philippines economy to grow steadily in the medium term which means that the income per capita is going to, we expect it to rise. We cannot predict when the country will reach the upper-middle-income status except that it seems to be on track to approach that," van Doorn said.
National Economic and Development Authority Secretary Arsenio Balisacan earlier said upper middle-income status could be achieved by 2024 as the government works towards reducing the poverty rate.
The Philippines' poverty incidence, which was at 17.8 percent in 2021, is expected to decline to 13.5 percent in 2023 and further down to 10.5 percent by 2025, World Bank data showed.
Poverty is defined by World Bank as those living under $3.65 per day for those categorized as lower-middle-income countries.
“We expected more jobs will spur growth in household incomes and poverty is projected to decline over the forecast horizon and using our poverty line for lower-middle-income countries,” van Doorn said.
"We expect that this economic recovery and labor market recovery will support poverty reduction," he added.
Unemployment in the country eased to 4.7 percent in March, while underemployment improved to its lowest rate since April 2005, data from the Philippine Statistics Authority showed.
However, van Doorn said the projection in poverty reduction is subject to risks such as higher-than-expected inflation which could offset household incomes, especially for the poor.
Inflation in May eased for the 4th straight month to 6.1 percent, however, it remains above the government's 2 to 4 percent target.
In July, the World Bank will release its annual income threshold, reflecting adjustments for inflation, van Doorn said.
"By then we can see where the Philippines stands relative to the threshold," he said.
"But more important than the threshold is the question of what the Philippines should do to continue growing, especially to make sure that growth is inclusive, that it is creating jobs and increasing the income levels and not only of the poor but also those who are just above the poverty line and who are vulnerable to negative shocks that may push them back to below the poverty line," he added.
The challenge, he said, is to generate high-quality jobs such as those in the manufacturing and service sectors. This can be achieved by attracting more investments and upskilling the labor force, he added.
Van Doorn noted that there has been a sharp decline in the poverty rate in the Philippines since 2015 until the COVID-19 pandemic.
The World Bank is supporting the Philippines through policy reform programs, analysis and financing which has reached $1.6 billion in 2021 and 2022, the economist said.