BUSINESS

Filipinos still struggle as economy moves up

Mico Virata · Aug 19, 2026, 5:29 PM

(July 02 2026) A view of the buildings of Taguig and Makati were seen from Mndaluyong City. The World Bank Group's latest country income classifications, released July 1, moved the Philippines from lower-middle-income to upper-middle-income status based on 2025 gross national income per capita estimates. The nation achieved this status after its Gross National Income (GNI) per capita reached $4,850, exceeding the $4,636 threshold for this income bracket. Under the updated thresholds, upper-middle-income economies are those with GNI per capita of $4,636 to $14,375. Lower-middle-income economies are those with GNI per capita of $1,176 to $4,635, while high-income economies are those above $14,375. Photo/Analy Labor

The Philippines may be moving into a higher-income bracket, but rising household expenses remain a major source of financial anxiety, with 74 percent of middle-income Filipinos saying higher everyday costs are their biggest financial concern.

The finding came from the 2026 Filipino Financial Confidence Report commissioned by FWD Life Insurance Philippines and conducted by Ipsos, highlighting the gap between the country’s economic progress and the financial realities facing households.

The concern comes as the Philippines posted 2.3-percent economic growth in the second quarter, slower than the 5.4 percent recorded a year earlier and the 2.8 percent expansion in the first quarter.

The country was also reclassified by the World Bank in July as an upper-middle-income economy, marking a major development milestone.

However, inflation averaged 4.8 percent during the first half of 2026, adding pressure on household budgets and making it harder for families to balance immediate needs with long-term financial goals.

The FWD study found that only 56 percent of respondents currently prioritize securing their family’s long-term financial future. Just 52 percent are actively building emergency funds, while only 45 percent are working toward financial independence and another 45 percent are saving for their children’s education.

FWD President and Chief Executive Officer Soon Liang Lau said economic growth should translate into greater financial preparedness for Filipinos.

“The Philippines’ transition to upper-middle-income status is a significant achievement, but it also raises the bar for how we define progress,” Lau said.

He added that financial confidence is not necessarily tied to wealth but to being prepared for unexpected expenses while continuing to pursue future goals.

The findings suggest that despite broader economic gains, many Filipino households remain focused on managing present costs, potentially limiting their ability to build savings and prepare for future financial needs.