The Philippine government stated that although the World Bank has classified the Philippines as an upper middle-income economy, in the short term this will not affect the interest rates for government loan applications to international multilateral development institutions, nor will it impact the fiscal budget planning for 2026 and 2027.
Presidential Communications Secretary Claire Castro, quoting Finance Secretary Frederick Go, said that after the World Bank adjusted the Philippines' economic classification, the impact on multilateral loan interest rates will not take effect immediately; generally, a period of about three years is needed to observe whether the Philippines can maintain its upper middle-income status.
He said that even if there are adjustments to loan interest rates in the future, the impact will be very limited, affecting only a small number of loan projects, so there will be virtually no effect on the budgets for 2026 and 2027.
Claire Castro pointed out that even if there are changes to interest rates in the future, there will be no practical effect on the Philippines for at least the next three years.
When asked whether the Philippines’ promotion to upper middle-income country would affect international aid and grants, she said that the Department of Finance has not yet released relevant details.
She also stressed that the new status will not affect the government in preparing the 2026 fiscal budget and the 2027 national expenditure plan.
Philippine President Ferdinand Marcos Jr. recently stated during his visit to Canada that, following the country’s economic status upgrade, some concessional loans and assistance programs may gradually be reduced in the future.
According to the latest data released by the World Bank, the Philippines' per capita Gross National Income (GNI) will reach US$4,850 in 2025, higher than the upper middle-income economy threshold of US$4,636, and will therefore officially be promoted from a lower middle-income economy to an upper middle-income economy.
The Philippines had been classified as a lower middle-income economy since 1987. The government’s economic team believes that this upgrade reflects the Philippines’ continued solid economic growth over the past five years, with an average annual GDP growth rate of 5.8%, which helps further boost international investor confidence and strengthen the Philippines’ position in the international capital market.
He said that even if there are adjustments to loan interest rates in the future, the impact will be very limited, affecting only a small number of loan projects, so there will be virtually no effect on the budgets for 2026 and 2027.
Claire Castro pointed out that even if there are changes to interest rates in the future, there will be no practical effect on the Philippines for at least the next three years.
When asked whether the Philippines’ promotion to upper middle-income country would affect international aid and grants, she said that the Department of Finance has not yet released relevant details.
She also stressed that the new status will not affect the government in preparing the 2026 fiscal budget and the 2027 national expenditure plan.
Philippine President Ferdinand Marcos Jr. recently stated during his visit to Canada that, following the country’s economic status upgrade, some concessional loans and assistance programs may gradually be reduced in the future.
According to the latest data released by the World Bank, the Philippines' per capita Gross National Income (GNI) will reach US$4,850 in 2025, higher than the upper middle-income economy threshold of US$4,636, and will therefore officially be promoted from a lower middle-income economy to an upper middle-income economy.
The Philippines had been classified as a lower middle-income economy since 1987. The government’s economic team believes that this upgrade reflects the Philippines’ continued solid economic growth over the past five years, with an average annual GDP growth rate of 5.8%, which helps further boost international investor confidence and strengthen the Philippines’ position in the international capital market.