Poverty has been growing under the Marcos Jr. administration. Self-rated low-income families increased from 12.2 million, or 48 percent of the total, in June 2022 to 14.5 million, or 52 percent of the population, by March 2026.
President Ferdinand Marcos Jr. is expected to highlight the Philippines’ attainment of upper middle-income country (UMIC) status, based on the World Bank’s classification, in his fifth State of the Nation Address (SONA).
For many Filipinos, however, the milestone presents a paradox.
While the economy may have moved up on paper, many middle-class families said they are struggling with slowing economic growth, persistently high prices and shrinking purchasing power, with some slipping back into poverty.
IBON Foundation Executive Director Sonny Africa argued that the new classification means little to the roughly 15 million Filipino families living below the poverty line and another seven million in the lower middle-income bracket. He said the true measure of economic progress is not an international income label but whether growth translates into better-paying jobs, lower living costs and a tangible improvement in people’s quality of life.
UMIC is a reminder of the unequal distribution of wealth that makes a few Filipinos rich at the expense of the many.
According to the independent think tank, poverty has been growing under the Marcos Jr. administration. Self-rated low-income families increased from 12.2 million, or 48 percent of the total, in June 2022 to 14.5 million, or 52 percent of the population, by March 2026.
Productivity and job creation have lagged as manufacturing fell to its smallest share of the economy in 76 years, accounting for 17.4 percent of gross domestic product (GDP) in 2025, while agriculture fell to its smallest share in the country’s history, accounting for 7.9 percent of GDP, Philippine Statistics Authority (PSA) data showed.
Africa said the UMIC terminology can be confusing, as it doesn’t mean that Filipino families are now mostly upper middle-class.
“The lapse actually seems intentional for maximum celebratory vibe and to give the impression that, under the Marcos Jr. administration, the country has arrived,” he added.
What it means is that the country has a $4,850 gross national income (GNI) per capita, exceeding the World Bank threshold. Still, it doesn’t mean that an average Filipino family earns around P1.2 million a year, or roughly P100,000 a month.
Africa said the actual situation is that the 19 million or so families earn at most P30,000 a month, while only the richest 5 percent of Filipino families earn more than what the World Bank’s UMIC standard indicates.
State research agency Philippine Institute of Development Studies (PIDS) listed 1.1 million upper middle-income households with monthly incomes between P97,111 and P166,476.
They constituted 4 percent of all households, or 2.7 percent of the population.
In contrast, 82 percent of total households are considered poor or earn monthly incomes of at most P55,492.
IBON data showed 838,000 upper middle-class families, with monthly incomes between P64,000 and P128,000, accounting for 3 percent of all families.
On the other hand, 77 percent of families earn P36,000 a month or less.
The equation placed eight to nine out of every 10 Filipinos in the poor, low- and middle-income groups, “making the Philippines very far from an upper middle-income country and instead an economy where the overwhelming majority are poor or vulnerable.”
Amid the hype, Africa indicated that the new UMIC status actually matters less as a measure of development than as an administrative tool for allocating development finance.
The classification may even narrow the country’s access to concessional financing from the World Bank, the Asian Development Bank and other international financial institutions, making it increasingly reliant on more expensive market-based borrowing, according to IBON.
Other upper middle-income countries such as China, Malaysia and Thailand pursued much stronger state intervention through industrial planning, strategic protection, directed public finance and active industrial policy, which policymakers were discouraged from adopting by the World Bank and other multilateral financiers.
The irony is striking. After decades of discouraging industrial policy and government intervention, the World Bank has acknowledged that much of its earlier advice was misguided.
In a March 2026 report, the institution’s chief economist wrote that the long-standing prescription against industrial policy “has not aged well — it has the practical value of a floppy disk today.”
That admission inevitably raises questions about the significance of the Philippines’ attainment of upper middle-income country (UMIC) status. While the classification reflects an increase in average national income, critics argue that the milestone means little to millions of Filipinos whose economic conditions have not improved.
An upgraded income label offers little comfort unless tangible gains in living standards accompany it.
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