Vietnam and Philippines Officially Upgraded to Upper-Middle-Income Status

Vietnam and the Philippines have officially been upgraded to upper-middle-income status by the World Bank, following years of significant economic expansion. This classification, announced on July 1, 2026, recognizes both countries for their impressive growth trajectories, which have been driven by diverse economic models.

According to The Straits Times, this upgrade brings the total number of ASEAN countries classified as upper-middle-income to five, joining Singapore, Malaysia, and Thailand. The World Bank noted that Vietnam has been classified as a lower-middle-income country since 2009, while the Philippines has held this status since the late 1980s.

“Regardless of global and domestic upheavals, we are relentlessly pursuing inclusive growth, strengthening fundamentals, and staying on track with our development agenda.”Arsenio Balisacan, Secretary of Economic Planning, Philippines

The World Bank's report highlighted that Vietnam's export-driven growth model and the Philippines' broad-based expansion reflect improvements across all major industries, indicating a comprehensive economic shift rather than growth concentrated in a single sector. Currently, Vietnam's gross national income (GNI) per capita is approximately $4,970 (around IDR 89.28 million), while the Philippines stands at about $4,850 (around IDR 87.12 million), both exceeding the World Bank's threshold of $4,636 (approximately IDR 82.28 million) for upper-middle-income classification.

Vietnam is recognized as one of the fastest-growing economies in Asia, targeting double-digit annual growth in 2026, spurred by a series of business-friendly reforms and significant infrastructure investments. In contrast, the Philippines faces a more challenging path ahead, having revised its economic growth targets downward for 2026 to 2030 due to geopolitical tensions in the Middle East and the intensifying impacts of the El Niño weather phenomenon.

Philippine Secretary of Economic Planning Arsenio Balisacan emphasized the country's commitment to inclusive growth despite external and domestic shocks, stating, "Regardless of global and domestic upheavals, we are relentlessly pursuing inclusive growth, strengthening fundamentals, and staying on track with our development agenda." This reflects a broader sentiment among policymakers in the region aiming for sustainable economic resilience.

“Essentially, the higher your ranking in this classification, the more independent you are and capable of meeting your own needs and resources as a country, including fiscally.”Ruben Carlo Asuncion, Chief Economist, Union Bank of the Philippines

However, the elevation to upper-middle-income status may limit access to development financing for both nations. For instance, the Philippines has historically benefited from loans at below-market interest rates to support infrastructure, disaster recovery, and social programs. Ruben Carlo Asuncion, chief economist at Union Bank of the Philippines, noted, "Essentially, the higher your ranking in this classification, the more independent you are and capable of meeting your own needs and resources as a country, including fiscally."

Alongside Vietnam and the Philippines, other nations that have recently achieved upper-middle-income status include Jordan, Micronesia, and Sri Lanka. Conversely, Togo has been reclassified from low-income to lower-middle-income status.