Philippines Seeks to Secure Cheaper Loans Amid Upper-Middle-Income Transition

MANILA, Philippines – Following its recent classification as an upper-middle-income country by the World Bank, the Philippine government is working to secure cheaper development financing before access to concessional loans diminishes. The country's gross national income (GNI) per capita reached $4,850 in 2025, surpassing the $4,636 threshold for this category.

Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio Balisacan highlighted that this upgrade signals improvements in governance, investment climate, and public infrastructure. He noted, “Those improvements will get reflected in the financial market,” suggesting that private firms will also benefit from the enhanced economic status.

“Those improvements will get reflected in the financial market.”Arsenio Balisacan, Secretary of Economy, Planning, and Development

However, this transition comes with challenges. While the Philippines will maintain access to concessional loans for the next three years, officials acknowledge that the country will gradually lose this access thereafter. Balisacan stated, “In the next three years, we still maintain those concessional loans, but gradually, we will lose eventually those ones.”

“We have a number of infrastructure projects and social sector investment projects in the pipeline.”Joseph Capuno, Undersecretary, DEPDev

DEPDev Undersecretary Joseph Capuno expressed confidence in maximizing the three-year window to approve priority projects, stating, “We have a number of infrastructure projects and social sector investment projects in the pipeline.” He emphasized the urgency of advancing these projects, particularly in light of the recent economic slowdown, which saw growth fall short of expectations and inflation remain a persistent issue.

Capuno further elaborated that the government has identified around 20 to 30 projects involving development partners such as the World Bank and the Asian Development Bank. He indicated that while the government will prioritize social sector investments, there will be a deliberate slowdown in the approval of new infrastructure projects. “You want to prioritize new projects in the social sector, slow down a bit on the infrastructure sector,” he said.

“You want to prioritize new projects in the social sector, slow down a bit on the infrastructure sector.”Joseph Capuno, Undersecretary, DEPDev

Despite the challenges, Capuno reassured that ongoing infrastructure projects will continue to receive support, stating, “It’s not a slowdown on all infrastructure projects, only on new. But expedite, ongoing.” As the government navigates this transition, it aims to bolster confidence and growth while addressing inflation and external economic pressures.