TWO international business groups on Friday welcomed the World Bank’s reclassification of the Philippines as an upper-middle-income country (UMIC).
The basis was the country’s gaining a gross national income per capita of $4,850 in 2025, surpassing the $4,636 threshold.
It was among five economies — including Jordan, Micronesia, Sri Lanka and Vietnam — that moved from lower-middle to upper-middle-income status this year.
The American Chamber of Commerce of the Philippines (AmCham) called the reclassification an important milestone reflecting the country’s economic progress and growing potential.
“This achievement sends a positive signal to global investors at a time when companies are reassessing supply chains, expanding regional operations and looking for new growth markets across the Indo-Pacific. It reinforces the Philippines’ position as a competitive destination for investment and job creation,” AmCham said in a statement.
Many American companies continue to view the Philippines as one of the most promising markets in Southeast Asia, citing its young and skilled workforce, strong English proficiency and long-standing economic ties with the United States, AmCham noted.
Combined with a growing consumer market, these advantages position the country to attract more investment in advanced manufacturing, digital services, infrastructure, health care and other high-value sectors, AmCham added.
Continued reforms will be critical to sustaining growth, including accelerating infrastructure development, improving digital connectivity, ensuring affordable and reliable energy, streamlining government processes, strengthening public-private partnerships, and advancing policies that encourage innovation and investment.
The European Chamber of Commerce of the Philippines (ECCP) also welcomed the reclassification. “This development comes at a pivotal time for EU-Philippines economic relations, as both sides continue negotiations toward a free trade agreement (FTA). The European Union remains a key trade and investment partner of the Philippines,” ECCP President Diana Edralin said in a statement.
Negotiations for a free trade pact with the EU began on Dec. 22, 2015, but stalled, and then resumed in Brussels on March 18, 2024.
The seventh round of talks ran from June 29 to July 3, with the Philippines aiming to conclude negotiations this year.
The FTA could bring in $12 billion in additional export potential. The EU’s Generalized Scheme of Preferences Plus (GSP+) trade privilege, set to expire next year, will also be renewed, further expanding market access for Philippine exporters.
The GSP+ is a special trade arrangement provided by developed nations, such as the European Union, that grants developing countries zero or reduced tariffs on thousands of exported products. It acts as an economic incentive to promote sustainable development, good governance and human rights.
“As the Philippines advances in its development path, the timely conclusion of an ambitious, balanced and commercially meaningful EU-Philippines free trade agreement becomes even more important. A future FTA can build on the gains achieved under existing trade arrangements, provide a more permanent and reciprocal framework for market access, and unlock new opportunities in trade and investment, while deepening cooperation on sustainability, digitalization, innovation and resilient supply chains,” Edralin said.