Senator Legarda seeks Senate inquiry into PH's new upper middle-income status

Senator Loren Legarda has filed a resolution seeking a Senate inquiry into the Philippines' recent elevation to Upper Middle-Income Country (UMIC) status by the World Bank, saying lawmakers should examine how the milestone can translate into tangible improvements in the lives of ordinary Filipinos.

Under Senate Resolution No. 505, the proposed inquiry in aid of legislation aims to assess the implications of the country's new economic classification and identify measures to ensure that economic gains result in broader opportunities, better public services, and improved living conditions.

The Philippines officially attained UMIC status on July 1, 2026 after the World Bank reported that the country's Gross National Income (GNI) per capita reached $4,850 in 2025, exceeding the required threshold of $4,636.

The resolution noted that it took the Philippines nearly 39 years to move up from the lower-middle-income category, where it had remained since 1987. It contrasted the country's trajectory with Vietnam, which advanced from lower-middle-income status in 2009 to UMIC in just 17 years, driven largely by export-oriented manufacturing and strong foreign direct investment.

Legarda also pointed out that the Philippine economy continues to depend heavily on remittances from overseas Filipinos, which accounted for 8.7 percent of the country's gross domestic product in 2024—the highest share among ASEAN member states.

The resolution further cited persistent structural challenges despite the country's improved income classification. These include a score of 32 out of 100 in the 2025 Corruption Perceptions Index, a poverty incidence of about 15.5 percent in 2023, and a 2026 Philippine Institute for Development Studies (PIDS) report showing that 30 percent of households remain vulnerable to falling back into poverty due to economic shocks.

It also highlighted an underemployment rate of 11.9 percent in 2025, continued income inequality—with the richest 20 percent receiving nearly half of the country's income while the poorest 20 percent account for only 5 to 6 percent—and the Philippines' ranking as the sixth lowest in East and Southeast Asia in the 2026 Good Life Index, citing shortcomings in healthcare, safety, and social support.

Legarda said the country's new status should be viewed as the result of the collective efforts of generations of Filipinos rather than the achievement of a single administration.

“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.

She stressed that the country's new classification should not be mistaken as evidence that all Filipinos are already enjoying 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.

The resolution directs the Department of Economy, Planning, and Development (DEPDev), in coordination with the Department of Finance and other government agencies, to submit a comprehensive report on the implications of the country's UMIC status.

Among the issues to be examined are strategies for sustaining the new classification, ensuring that its benefits reach all sectors, assessing the impact on concessional financing, official development assistance, grants and loan terms, sovereign borrowing, fiscal space, and public investments, as well as identifying laws and programs that may need to be reviewed or updated.

The report is also expected to outline medium- and long-term strategies for translating the country's new economic standing into inclusive growth, poverty reduction, quality employment, stronger domestic productivity, and better public services.