Of 201 countries, the Philippines ranks 130th, still among the poorest third of the planet wearing a “middle-income” badge.
The WB did not create this classification to grade progress. It created it to sort borrowers. The floor figure decides who qualifies for concessional loans and who doesn’t. Malacañang, however, took a lending category and rebranded it as a report card.
Granted, it is a respectable report, but the number hides more than it shows since averages tend to bury inequality.
What gets less attention is what actually drives the average up: repressing the wage level. Informal, irregular, low-paying work boosts corporate profits.
Corruption-soaked infrastructure spending bumps up the median numbers that led to the UMIC classification. Debt-financed budgets drive it too, padded by tax breaks for large firms and squeezed from ordinary wage earners.
The economic reality runs counter to the imaginary progress. Manufacturing now claims its smallest share of the economy in nearly eight decades.
Agriculture has fallen to its smallest share ever. Jobs at home had dried up, so millions left to work abroad, and their remittances now prop up the GNI figure.
The administration has no reason to celebrate. The country isn’t getting richer at home. It’s exporting its workers and importing their paychecks, then calling the remittances progress.
An independent economist calls the whole exercise symbolic. First-quarter gross domestic product (GDP) grew just 2.8 percent, while investment is slowing.
Unemployment and underemployment remain high. Inflation keeps eating wage gains before workers can even spend them. More than half of Filipino families still rate themselves poor in self-assessed surveys.
The mix of sluggish growth and stubborn inflation shows the symptoms of stagflation. Add a weak peso, costly power and high interest rates, and the competitiveness picture gets worse, not better.
With growth in a skid, the supposed gains from UMIC status do not trickle down to the people who pay with their blood and sweat to reach the goalpost.
The government’s messaging leads with a statistical milestone and buries the structural rot underneath it: Weak fiscal discipline, corruption allegations, investors sitting on their hands because governance offers them no comfort.
Development was never meant to be measured on a scoreboard. By most practical measures, the Philippines remains near the lower end of the middle-income tier, sustained largely by the sacrifices of overseas Filipino workers, informal laborers, and a weakened manufacturing base.
The essential pillars of genuine development remain elusive: low and stable inflation, a competitive cost of doing business, a strong manufacturing sector, disciplined public spending and a procurement system free of corruption.
Until those fundamentals are in place, the UMIC label is little more than a fresh coat of paint on an old house with a leaking roof.
It is good headline material and nothing more to Filipinos who toil daily and endure abuse from government crooks.
