The Makati Business Club (MBC), one of the country’s most prominent business organizations, expressed confidence that the Philippines will reach upper-middle-income country status by next year and achieve high-income status in the long term through strategic reforms that would spur economic growth.

Based on the World Bank’s classification of income levels, the Philippines is currently a lower middle-income country with a gross national income (GNI) per capita of $4,230 in 2023, a seven-percent increase from $3,950 in 2022.

The Washington-based multilateral lender designates an economy as lower middle-income if the GNI per capita is between $1,146 and $4,515.

Meanwhile, upper middle-income status applies to countries with a GNI per capita of $4,516 to $14,005.

The government was initially optimistic about reaching this higher income level in 2024 but has since moved the goalpost to 2026 due to concerns about the global economy.

Last month, the United States (US) announced sweeping tariffs on all its trading partners, with the Philippines facing a 17-percent reciprocal tariff.

Despite these headwinds, MBC trustee Jose Cuisia Jr. said he expects the country to attain upper-middle-income status next year on the back of robust economic productivity.

Citing findings from the ASEAN+3 Macroeconomic Research Office (AMRO), Cuisia said that stronger political will from the government to implement economic reforms could help increase the country’s GNI per capita by 6.8 percent from its 2023 level.

Cuisia, a former governor of the Bangko Sentral ng Pilipinas (BSP), said he even sees the Philippines reaching high-income status by 2050.

According to the World Bank, high-income status applies to countries with a GNI per capita of more than $14,005.

He, however, said the GNI has to grow by an annual average of 4.5 percent over the next 35 years to achieve this.

“I'm confident, I'm optimistic that we will be able to do that,” he said during an MBC media forum last week.

With President Ferdinand “Bongbong” Marcos Jr.’s recent order to “recalibrate” his Cabinet to realign the government with the people’s needs, Cuisia said this would be the most ideal time for the government to focus on economic growth drivers.

This would include programs to upskill workers, improve workforce productivity, and drive more investments in digital infrastructure, he said.

MBC trustee Rizalina Mantaring, who serves as an independent director at several major corporations, said the Marcos administration should look out for “bright spots” to keep the economy going amid potential slowdowns.

With the resumption of reciprocal tariffs in July, Mantaring said the country’s strong export markets—such as electronics—should be given greater support.

Philippine Statistics Authority (PSA) data showed that electronic products remained the country’s top export last year, with total earnings of $39.09 billion—more than half the value of all exports.

While the Philippines is facing the second-lowest tariff rate in Southeast Asia, she noted that the country would be unable to capitalize on this advantage without sufficient global demand.

With this, Mantaring emphasized the importance of improving the ease of doing business to attract more foreign investments into the country.

For instance, she said investors are more likely to infuse capital into Vietnam rather than the Philippines due to its investment-friendly conditions. Vietnam is facing one of the highest reciprocal tariff rates set by the US, at 46 percent.

Aside from the ease of doing business, Cuisia said investors are hesitant to invest in the country due to issues such as corruption and inadequate infrastructure.

“So, I think the government has to focus on this problem to be able to attract, not just foreign direct, but even local investments,” the former BSP Governor said.

“It's taking time, and unfortunately, three years have gone by since this administration [started]. So, we hope that they'll do better in the second half of PBBM’s term,” he added.

Marcos assumed the presidency on June 30, 2022, and will serve until June 30, 2028.