Upper-middle-income goal likely attainable by 2023

THE GOVERNMENT’S goal to make the Philippines an upper-middle-income country will likely be delayed by three years to 2023 due to the coronavirus disease 2019 (COVID-19) pandemic, an official from the National Economic and Development Authority (NEDA) said.

“As you know, we were supposed to be an upper-middle-income country towards the end of last year were it not for COVID, but right now we think that it will be pushed back, probably by 2023,” NEDA Undersecretary Rosemarie G. Edillon said in an online forum organized by the Asian Development Bank (ADB) on Friday.

Ms. Edillon said they have tapped the ADB to look into the “optimal governance structure” to support the country’s transition to an upper-middle-income economy, and eventually into a high-income economy.

In July, the World Bank reported the Philippines remained a lower middle-income economy in 2020 due to the impact of the pandemic.

The Philippines’ gross national income (GNI) per capita, which went down 11% to $3,430 last year from 2019, fell within the World Bank’s bracket for lower middle-income economies with a $1,046 to $4,095 GNI per capita.

The economy contracted by a record 9.6% last year after the government put the country under one of the world’s longest and tightest lockdowns to curb the spread of COVID-19.

The government targets 4-5% GDP growth this year. The economy expanded by 11.8% in the April to June period, ending five consecutive quarters of decline.

Officials expect the economy to return to its pre-crisis level by the fourth quarter of 2022 or the first quarter of 2023.

Ms. Edillon they are studying the experiences of neighboring countries that have become high-income economies to see how they approached savings and investment, capital markets, digital infrastructure, education and skills, and research and development in their transition.

“We hope to be able to come up with the proper preparation towards that transition and we look forward to the assistance being given by the ADB,” she said.

NEDA needs to enhance its knowledge management systems so it can improve its monitoring of economic developments, Socioeconomic Planning Secretary Karl Kendrick T. Chua said. He said they are currently working on various dashboards and enhancing their data repositories.

“This will allow us to monitor programs, projects, and internal processes more efficiently and give us more time to focus on the more value-adding aspects of our work,” Mr. Chua said. — LWTN