Legarda seeks Senate inquiry on Philippines' upper middle-income status

Senator Loren Legarda has filed Senate Resolution No. 505 seeking an inquiry into the Philippines' recent reclassification as an upper middle-income country (UMIC), saying the milestone should translate into tangible improvements in the lives of ordinary Filipinos rather than remain a statistical achievement.

The World Bank elevated the Philippines to UMIC status effective 1 July after the country's gross national income (GNI) per capita reached $4,850 in 2025, surpassing the threshold of $4,636. The resolution noted that the country remained in the lower middle-income category for nearly four decades before reaching the new classification.

Legarda said the achievement should be viewed with humility and responsibility, recognizing the contributions of Filipino workers, overseas Filipinos, farmers, fisherfolk, entrepreneurs, taxpayers, and public servants.

"Hindi ito tagumpay ng isang administrasyon lamang. Ito ay bunga ng pawis, sakripisyo, at tibay ng loob ng mga manggagawa, magsasaka, mangingisda, propesyunal, at mga Pilipinong nagtaguyod ng bansa sa loob ng maraming dekada. Ang tunay na sukatan ng kaunlaran ay kung mararamdaman ng bawat pamilya ang ginhawa sa kanilang araw-araw na pamumuhay, hindi lamang sa mga numero ng ekonomiya," Legarda said.

The senator said the country's new classification should not be interpreted as proof that most Filipinos already enjoy middle-class living standards.

"Hindi sapat ang bagong tatak na Upper Middle-Income Country kung ang karaniwang Pilipino ay patuloy na nahihirapan sa mababang sahod, kulang na serbisyong panlipunan, at hindi pantay na oportunidad. Ang hamon sa pamahalaan ay gawing inklusibo ang paglago, na ang bawat Pilipino, lalo na ang nasa laylayan, ay may marangal na trabaho, maayos na kalusugan, at patas na bahagi sa kaunlaran. Ang bagong katayuan ng bansa ay dapat maging simula ng mas malalim na reporma, hindi pagtatapos ng laban," she added.

In the resolution, Legarda cited structural challenges that continue to impede inclusive growth, including the country's dependence on overseas remittances, a poverty incidence of 15.5 percent in 2023, an 11.9-percent underemployment rate in 2025, persistent income inequality, and a score of 32 out of 100 in the 2025 Corruption Perceptions Index. She also cited a 2026 Philippine Institute for Development Studies (PIDS) study showing that 30 percent of Filipino households remain highly vulnerable to falling back into poverty because of economic shocks.

Legarda also compared the Philippines' economic trajectory with that of Vietnam, noting that while the Philippines took nearly 39 years to move from lower middle-income to upper middle-income status, Vietnam achieved the same transition in 17 years, driven by export-led manufacturing and strong foreign direct investments.

Under Resolution No. 505, Legarda is asking the Senate to direct the Department of Economy, Planning, and Development (DEPDev), in coordination with the Department of Finance (DOF) and other agencies, to submit a comprehensive report on the implications of the country's new income classification. The report would cover measures to sustain UMIC status, its impact on concessional financing and official development assistance, sovereign borrowing, fiscal space, public investment planning, and strategies to ensure that the benefits of economic growth are felt across all sectors. The resolution also seeks a medium- and long-term roadmap aimed at promoting inclusive growth, reducing poverty, creating decent jobs, strengthening domestic productivity, and improving public services.