Balisacan hopeful on high-income goal 

THE Philippines can still hit the goal of becoming a high-income economy despite a run of below-potential growth, Economic Planning Secretary Arsenio Balisacan said on Thursday.

This, following the release of disappointing data on how the national economy performed in 2025.

“Our aspiration as a country, as reflected in our long-term plan, is to join our neighbors as a developed country in 2040,” Balisacan told reporters.

“Our average growth is still quite close to six percent for that long period from 2010 to present. And we must keep on driving for high growth,” he added.

Gross domestic product growth fell below target for a third straight year in 2025, slumping to 4.4 percent from 5.7 percent a year earlier and 5.5 percent in 2023.

The 2040 aspiration, Balisacan noted, was laid out in a national long-term plan crafted in 2015, at a time when annual growth of 6 to 8 percent was assumed to be achievable.

With the exception of a sharp deceleration to 3.9 percent in 2011 and a Covid-caused 9.5-percent contraction in 2020, Philippine economic growth stayed above 6.0 percent prior to the 2023-2025 slowdown.

Balisacan said that economic managers expect growth to gradually recover, with this year’s target having been set at 5.0-6.0 percent and rising further to 5.5-6.5 percent for 2027 and 6.0-7.0 percent for the remaining year of the Marcos administration.

The projections — lowered last month due to the impact of a corruption scandal and external uncertainties — were said to reflect the government’s belief that the Philippine economy’s underlying potential growth rate is about 6 percent.

This can be pushed even higher with the right policies, Balisacan said.

“We need all this good governance and good economic management to realize that [higher growth] and actually, if the investments that we are making in human capital, particularly education and health and in infrastructure, that can elevate that potential to even higher one,” he added.

This growth could be 6.5-7.0 percent, Balisacan said.

“So, again, our trust is to keep the fundamentals sound. We must not be distracted by political noises. Otherwise, you sacrifice those sound fundamentals for short-term gains and that’s not good for long-term growth.”

Balisacan remained confident that the Philippines would still be able to hit its nearer-term target of entering the upper-middle-income category as the country is just a few dollars short of the threshold.

“We should still be able to reach the upper middle-income class status,” he said.

He cautioned, however, that this would depend more on just economic growth and that the World Bank, which determines the classifications, may also look if the level is sustained over several years.

The Philippines remains a low-middle-income economy after it failed to reach the upper-middle-income gross national income (GNI) threshold of $4,496 to $13,935.

GNI per capita rose to $4,470 in 2024 from $4,320 in 2023, but remained in the lower-middle-income range of $1,136 to $4,495.