Philippines urged to raise poverty metric as UMIC status resets benchmark

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Philippines to revise poverty metric

Highlights

Philippine Institute for Development Studies urges revising the poverty line above P98 per person per day after the country's UMIC status upgrade.
World Bank now classifies Philippines as UMIC, reporting a record $4,850 GNI per capita in 2024 versus the $4,636 minimum threshold for UMIC economies.
World Bank projects 55.2% of Filipinos will fall below the $8.30 per day upper-middle income poverty line in 2026, highlighting persistent economic vulnerability.

Poverty benchmark debate shifts with income upgrade

As reported by BusinessWorld Online, Philippine Institute for Development Studies Senior Research Fellow Roehlano M. Briones says the country should adopt a more ambitious poverty measurement standard following its transition to upper-middle income country, or UMIC, status.

Speaking at a PIDS webinar on Tuesday, Mr. Briones says the Philippines needs to move beyond a subsistence-based poverty line and examine whether households can afford healthy diets. He argues that the current standard, set at about P98 per person per day or P14,634 per month for a family of five, contains an element of arbitrariness because it is mainly used to track performance indicators over time.

The Philippine Statistics Authority reports a poverty rate of 9.7% in 2025, down from 15.5% in 2023. Mr. Briones says the country has not yet adjusted its poverty threshold upward despite its recent income-status upgrade.

UMIC classification raises policy and growth questions

The World Bank places the Philippines in the UMIC category after gross national income per capita reaches a record $4,850, above the minimum threshold of $4,636. Under World Bank definitions, UMIC economies have GNI per capita of between $4,636 and $14,375.

The shift also changes how poverty can be viewed in international terms. The World Bank's Macro Poverty Outlook projects that 55.2% of Filipinos will fall below the upper-middle income poverty line of $8.30 per day in 2026, based on 2021 purchasing power parity, compared with an estimated 13.4% under the lower-middle income poverty line of $4.20 per day.

At the same forum, Congressional Policy and Budget Research Department Budget and Tax Research Bureau Executive Director Novel V. Bangsal says the UMIC upgrade is not expected to significantly alter poverty conditions on its own. He says weak economic growth over the past three quarters could still threaten the country's ability to sustain its new status, while Mr. Briones adds that the Philippines still has more in common with lower-middle income economies than with countries that have held UMIC status for years.

In our earlier article on the Philippines’ planned sovereign bond reforms and expected inclusion in J.P. Morgan’s Government Bond Index-Emerging Markets, we explained how these steps could widen the investor base and improve liquidity in peso government securities. We also noted that cheaper funding and stronger market participation do not automatically translate into more productive investment, higher productivity, or better household welfare without broader reforms in governance, infrastructure, and the business environment.

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