Given that the Philippines is set to attain upper-middle-income status in 2026, the pressing question is: how long will it take to become a high-income economy? In a projection by Jose Antonio E. Ramirez—who holds an M.S. in Industrial Economics from the University of Asia and the Pacific and currently serves as an economist at the Office of Senator Win Gatchalian—two possible scenarios were delineated.

Using Philippine Gross National Income (GNI) per capita (Atlas method, current US$) as the metric and applying the World Bank high-income threshold in effect as of July 2025 ($13,935), the two growth scenarios were assessed from a FY 2026 base GNI per capita of $4,500.

Under an eight percent annual GDP growth rate combined with a one percent annual population increase, GNI per capita rises from $4,500 in 2026 to $14,059 by 2043. This crosses the threshold and places the transition to high-income status in the early 2040s. Alternatively, under a GDP growth rate of six percent (with population growth also at one percent), GNI per capita increases to $14,350 by 2050, indicating a much later transition.

These simple projections show that a six percent growth scenario is likely to delay the realization of AmBisyon Natin not until 2040, but ten years later in 2050. If GDP accelerates to eight percent instead, “First World” status can be attained during the 2040s. The less bullish scenario assumes little structural change, with the Philippine economy remaining over-dependent on consumption propelled by OFW remittances and BPO-IT earnings. In contrast, the high-growth scenario assumes significant structural changes, especially in agriculture. Even if six percent average annual growth remains among the highest in the Indo-Pacific, it is insufficient to effect the structural shifts necessary to escape the Middle-Income Trap.

Before we continue, it is enlightening to point out the serious limitations of using GDP to measure human flourishing. As seen in the framework of AmBisyon Natin 2040, Filipinos are aspiring for quality of life rather than the mere quantity of goods and services produced. They speak of being “smart and innovative,” “healthy and productive,” and achieving “work-life balance.” In Tagalog, they use descriptors like panatag (secure) and maginhawa (comfortable), which are qualitative rather than quantitative.

It is well known that GDP includes expenditures on both “goods” and “bads.” It aggregates desirable expenditures on food and education with "bads" such as activities that pollute the physical or moral environment—and then adds the costs of repairing that damage. For example, GDP captures expenditures on pornographic materials and then includes the subsequent costs of treating the psychological harm caused by those materials.

Therefore, in addition to quantitative measures, we must describe the desired state of society in the qualitative terms embedded in AmBisyon Natin 2040. These aspirations include a prosperous, predominantly middle-class society where poverty is eradicated; long and healthy lives supported by better healthcare; and a system that produces smart, innovative, and adaptable lifelong learners. Furthermore, the vision calls for a high-trust society with resilient institutions and a more equitable distribution of income and wealth.

Based on Mr. Ramirez’s projections, the three administrations that will hold power between now and 2040 (including the current one) must strive for the eight percent growth scenario. This is the pace required to implement the institutional reforms envisioned in AmBisyon Natin. Only at eight percent will there be sufficient resources to bring the poverty rate down from its current 16 percent to near zero over the next twenty years.

This eight percent target is only achievable if the agricultural sector grows by at least three percent annually to address food security and if Foreign Direct Investment (FDI) reaches $15 billion annually. Such investment is vital to bring the ratio of Gross Capital Formation closer to the regional average of 30 percent of GDP. We simply do not have enough domestic savings to fund the necessary airports, railways, and subways. Furthermore, governance must improve to eliminate the leakage of trillions of pesos through corruption, as seen in 2025, redirecting those funds into public education and healthcare.

More importantly, the Philippines can avoid the Middle-Income Trap if farm productivity is increased through the consolidation of small farms. This allows large-scale capital to enter corporate farming, following the successful models of bananas and pineapples. There are at least nine crops—including coconut, coffee, cacao, bamboo, mango, avocado, cashew, abaca, and pili—ripe for commercial plantations. There are already optimistic signs that conglomerates like the First Pacific Group, the DACON group, the Lorenzo family, and Benguet Corporation are ready to invest in these areas.

While the government must continue improving infrastructure for small farmers through roads, irrigation, and extension services, there is no substitute for the economies of scale provided by corporate farming. This is the only way to apply the advanced technology necessary for a true productivity breakthrough.