Vietnam, Philippines Join World Bank's Upper-Middle Tier
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- Vietnam and the Philippines were upgraded to the World Bank's upper-middle income category on July 1, with GNI per capita of US$4,970 and US$4,850 in 2025 respectively, both clearing the US$4,636 threshold.
- All five major Southeast Asian economies — including Singapore, Malaysia, and Thailand — are now classified as upper-middle income or higher, completing a regional shift up the development ladder.
- Vietnam, classified as lower-middle income since 2009, is targeting double-digit annual growth in 2026, citing business-friendly reforms and a large infrastructure investment drive.
- The Philippines, which had been lower-middle income since the late 1980s, recently cut its economic growth targets for 2026 through 2030 due to Middle East tensions and an intense El Niño.
- Both countries will likely see reduced access to concessional development funding, though Philippine Economic Planning Secretary Arsenio Balisacan said gains from stronger fundamentals and improved market access would outweigh those adjustments.
- Jordan, Micronesia, and Sri Lanka also moved up to upper-middle income, while Togo was reclassified down to lower-middle income; the global share of low-income economies has dropped to 11% from 30% since 1987.
Why it matters: The Philippines depends on below-market-rate loans for infrastructure, disaster recovery, and social programs, so the reclassification creates near-term fiscal pressure even as it signals economic maturation. Vietnam's export-led model gives it a steadier path, but both nations are now largely on their own to finance the next phase of development.
