As widely expected, the Philippines remained classified as a lower-middle-income country (LMIC) after narrowly missing the lowered threshold to achieve upper-middle-income country (UMIC) status, based on the World Bank’s latest country income classification.

The latest data released by the Washington-based multilateral lender on Tuesday, July 1, showed that the Philippines was still an a lower-middle-income economy—belonging to the group whose gross national income (GNI) per capita ranged between $1,136 and $4,495 in 2024.

The Philippines’ GNI per capita in 2024 reached a new record high of $4,470, but it fell short of the revised upper-middle-income economy threshold, now set at $4,496 to $13,935 for the World Bank’s new fiscal year (FY) 2026.

Using its Atlas method to compute GNI per capita as the basis of its country classification by income, the World Bank adjusted the LMIC and UMIC thresholds downward for FY 2026, which runs from July 1 this year to June 30 next year.

In the previous FY 2025 covering the period July 2024 to June 2025, lower-middle-income economies—where the Philippines belonged since at least 1989—had GNI per capita ranging between $1,146 and $4,515 in 2023, while upper-middle-income economies included those with $4,516 to $14,005.

GNI measures the total income generated by a country’s residents, both domestically and abroad, making it a broader indicator of economic performance than gross domestic product (GDP), which only accounts for local output.

In his inaugural State of the Nation Address (SONA) in 2022, President Ferdinand Marcos Jr. said the Philippines aspires to attain UMIC status by 2024—a target that has already been postponed multiple times by the current administration as economic growth fell below expectations these past years.

During the previous Duterte administration, its economic team had aimed to elevate the Philippines to UMIC status in 2020—a goal derailed by the socioeconomic crises inflicted by the Covid-19 pandemic.

Among the five founding members of the Association of Southeast Asian Nations (ASEAN), the Philippines is the only LMIC for the current FY.

In 2024, Indonesia had a GNI per capita of $4,910; Malaysia had $11,670; and Thailand, $7,120—making them UMICs.

Singapore has long been a high-income economy—its 2024 GNI per capita stood at $74,750.

Oil-rich Brunei Darussalam is also a high-income economy, with a GNI per capita of $36,150 in 2024.

Fellow LMIC Vietnam’s GNI per capita in 2024 was $4,490—not only eclipsing the Philippines’ but also much closer to the UMIC threshold.

Like the Philippines and Vietnam, Cambodia, Laos, and Myanmar are also LMICs, with 2024 GNI per capita of $2,520, $2,000, and $1,220, respectively.

Once the Philippines becomes a UMIC, it will lose access to low interest rates slapped on official development assistance (ODA) or cheap loans extended by bilateral development partners as well as multilateral lenders like the World Bank, the Manila-based Asian Development Bank (ADB), and the China-led Asian Infrastructure Investment Bank (AIIB).

A separate World Bank Group (WBG) report published on Monday, June 30, lamented that even with sustained robust economic growth, structural transformation, as well as rising educational attainment that helped reduce poverty levels over the last 30 years, “inequality has been a persistent challenge” in the country.

“Despite significant progress in reducing poverty, the Philippines continues to face high inequality, which stayed elevated in the early 2000s as the economy grew. Although inequality has gradually declined since 2012, it remains among the highest in Southeast Asia,” noted a WBG policy research working paper titled “Inequality, Education, and Occupational Change in the Philippines.”

The WBG publication said that “slow growth in college-educated workers has sustained high wage premium for skilled workers,” such that “returns to both college education and high-skill occupations increase monotonically over the wage distribution, contributing to the persistence of inequality.”

“Changes in occupational structure have also influenced income distribution. Low- and middle-skilled jobs saw relative wage gains from 2002 to 2012, but middle-skilled occupations experienced the highest growth from 2012 to 2016—a key driver behind falling wage inequality,” it said.

“Employment trends followed a similar pattern, with middle-skilled job growth peaking in 2012 to 2016. Recent trends suggest a shift away from middle-skilled jobs, though it remains uncertain whether this reflects structural changes in the labor market or temporary disruptions,” it added.