MANILA, Philippines – The Philippines may fall short of achieving its goal to become a high-income nation by 2040 unless it accelerates its economic growth beyond current rates, according to Socio-economic Planning Secretary Arsenio Balisacan. He emphasized that sustaining an annual growth rate above 6 percent is necessary to reach this milestone, a target that has been jeopardized by the COVID-19 pandemic.

Speaking to the press, Balisacan highlighted that the pandemic severely disrupted the country's long-term development blueprint outlined in the AmBisyon Natin 2040 vision, which aims to elevate the economy to high-income status within two decades.

"The COVID years set us back significantly. We lost about three years of growth momentum due to the contraction experienced," Balisacan explained. "At our current growth pace, reaching the 2040 target appears increasingly unlikely."

Despite the Philippines averaging close to 6 percent economic growth over the past 15 years, Balisacan stressed that this rate is insufficient to substantially enhance the purchasing power of Filipino citizens or to ensure inclusive growth across society.

He urged the nation to target an ambitious 8 percent annual growth rate to expedite its ascent into the high-income bracket. "I am not, you know, happy with 6 percent," he candidly remarked.

Recent World Bank data categorized the Philippines as a lower-middle-income economy, with a 2024 gross national income (GNI) per capita of $4,470—just $26 short of the threshold for upper-middle-income status set between $4,496 and $13,935. This classification influences the country’s access to official development assistance and concessional loans crucial for development programs. In 2024, total ODA commitments to the Philippines reached $39.61 billion.

The World Bank’s "Philippines Country Growth and Jobs Report" released last month calls for bold reforms to enhance labor markets and accelerate progress toward high-income status, potentially achievable by 2050 if growth is adequately inclusive and strengthened.

"We can still reach high-income status around 2050. However, by growing faster and ensuring inclusivity, the 2040 target may yet be attainable," Balisacan concluded.

The current benchmark for high-income economies is defined by the World Bank as having a GNI per capita in excess of $13,935. The government faces the dual challenge of boosting growth while addressing inclusivity to realize its ambitious economic goals.