The Philippines remains a a lower-middle income economy
The Philippines remained as a lower-middle income economy, according to the latest data from the World Bank.
The World Bank on July 1 updated the threshold for the four-income groups — low, lower-middle, upper-middle, and high-income countries — and reclassified the countries based on their 2019 gross national income (GNI) per capita.
The Philippines has a higher GNI per capita of $3,850 in 2019 than 2018’s $3,170, data from the World Bank showed.
But despite the increase, it still falls within the $1,036-$4,045 income bracket for the lower-middle income group that has been revised upwards from $1,026-$3,995 range in the previous update on July 1, 2019.
The government targets to graduate to the upper-middle income status by 2022. It is also eyeing to secure an “A” long-term credit rating by that year when the Philippines will eventually lose the concessional loans it now enjoys.
In a blog written by World Bank’s Umar Serajuddin and Nada Hamadeh, they explained the thresholds are adjusted annually to account for inflation.
“It is important to emphasize that the World Bank’s income classifications use the GNI of the previous year (2019 in this case). Thus, the GNI numbers that are used for this year’s classification do not yet reflect the impact of COVID-19 (coronavirus disease 2019),” they added.
With the update, the World Bank now defines upper-middle income economies to have a GNI per capita of $4,046-$12,535, higher than $3,996-$12,375 bracket used earlier.
Meanwhile, low-income countries are those with less than $1,036 GNI per capita, up from the previous $1,026 ceiling. Economies should have at least $12,535 GNI per capita to graduate to the high-income group now, which is slightly higher than the minimum requirement of $12,375 set previously.
There were eight countries that moved up to a higher category for the latest update, namely: Benin, Nepal and Tanzania to lower-middle income status; Indonesia to upper-middle income status; and Mauritius, Nauru and Romania to high-income bracket.
Meanwhile, Algeria and Sri Lanka moved down one notch to lower-middle income status while Sudan is now considered a low-income economy from lower-middle income economy previously.
Latest data showed GNI — the sum of the nation’s GDP and net income received from overseas -— declined by 0.6% in the first quarter, a reversal from the 5.8% growth in the previous quarter and 5% in 2019’s comparable three months.
(sources :Philstar and Worldbank)