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Philippines reaches upper-middle income status: Will it put more food on the table?
The Philippines has a huge income gap — its richest citizen is a peso trillionaire, while daily wage for workers in Bangsamoro Autonomous Region in Muslim Mindanao is only P366 (Dh22)
- PUBLISHED: Mon 13 Jul 2026, 6:00 AM
The World Bank (WB) has recently categorised the Philippines as an “upper-middle income country,” an announcement the government of Ferdinand Marcos Jr celebrated but many Filipino workers found hard to believe.
The international finance institution upgraded the country's income classification after its gross national income (GNI) per capita reached $4,850, exceeding the upper-middle income threshold of $4,636 for the fiscal year. The Philippines joined Jordan, Micronesia, Sri Lanka, and Vietnam that also moved from low-middle income to upper-middle income country status.
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But is the promotion real? How did the World Bank arrive at its conclusion?
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WB pegs low-income economies with having $1,175 gross national income (GNI) per capita; lower middle-income economies are between $1,176 and $4,635; upper-middle income from $4,636 to $14,375. Those with more than $14,375 GNI are high-income economies, such as the UAE.
The Philippines has exceeded the $4,636 upper-middle income threshold, WB said.
The Philippine Department of Economy, Planning, and Development (DEPDev) quickly agreed with the assessment, praising its own “sound macroeconomic management, and long-term structural reforms.”
“This confirms the resilience of the Philippine economy. Despite global and domestic shocks, we have relentlessly pursued inclusive growth, strengthened fundamentals, and remained on track with our development agenda,” DEPDev secretary Arsenio Balisacan said.
Do ordinary Filipinos agree with the new income category?
Analysts from independent think-tank Ibon Foundation pointed out that WB calculates a country’s GNI by taking its total annual income, including money earned abroad, and dividing it by its population. From this, it assigns income status annually on using the rather simplistic formula.
In reality, they asserted, The Philippines has a stark income divide— its richest citizen is a peso trillionaire, while daily wage for workers in Bangsamoro Autonomous Region in Muslim Mindanao is only P366 (Dh22). "For ordinary Filipinos, real economic development means genuine improvement of their lives," they added.
Both WB and DEPDev secretary Balisacan also credited overseas Filipino workers, whose earnings abroad form part of the country’s GNI. “Our OFWs have played an important role in reaching this milestone. At the same time, our long-term goal is to create more high-quality jobs at home so overseas employment becomes a choice, not a necessity," he said.
Filipino lawmaker Antonio Tinio blasted WB’s reclassification as "mere propaganda". He said: “The government must admit that half of our workers earn an average of P510 (Dh 30) daily, not even half of the P1,312 (Dh78.20) needed to be considered a living wage.
Tinio added there is no genuine improvement on the lives of ordinary Filipinos. “Only big businesses and corrupt politicians are feeling this so-called development."
Workers demand substantial wage hike
Meanwhile, workers quickly dismissed as “very inadequate” the daily wage increase announced by the Department of Labor and Employment.
“It is very inadequate compared to the several increases in oil prices, electricity bills and other expenses,” Kilusang Mayo Uno (KMU/ May First Movement) said in reaction to the announcement that the daily minimum wage in Metro Manila would increase from P695 to P780.
Minimum wage earner Jong Ancheta welcomed the wage hike announcement. “It is better than nothing, but I wish it was more substantial,” the egg roll wrapper maker said.
A father of two, Ancheta said the wage hike announcement is also much delayed as last year’s P50 daily wage hike had already been swallowed by record inflation caused by the war in the Middle East.
He also rued DOLE’s announcement that small businesses like their egg roll wrapper factory may apply for exemptions to the wage hike order. Micro ventures with less than 10 workers may be exempted from the Philippines’ daily wage rule. Aside from himself, there are only seven other workers in their factory, including their supervisor who also doubles as their bookkeeper.
“I would understand if our boss would file for an exemption as his overhead had gone up since March this year. Flour, cooking gas and electricity costs have gone up,” Ancheta said in Filipino. “But I wish he would give us the increase. We need it, too,” he added.