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Can the Philippines level up to upper middle-income (UMIC) status?
@Source: gulfnews.com
Manila: The race is on — and the finish line is getting closer. The Philippines is gunning to become an upper middle-income country (UMIC) by late 2025 or 2026. It’s more than just a bragging right. It's about making lives better for the 114 million or so inhabitants of the archipelago made up of 7,641 islands.Game-changerIt’s a potential game-changer.The nation has had a decades-long quest to deliver a stable, comfortable, and secure life —“matatag, maginhawa, at panatag na buhay” — for every Filipino.For decades, it seemed a moonshot.Now, it's within reach. And the numbers show. What’s UMIC anyway?According to the World Bank, a country needs a Gross National Income (GNI) per capita of at least $4,516 to join the UMIC club. The Philippines currently sits at $4,230 (2023), just a short jeepney ride away from the mark. .$4,516The World Bank threshold for UMIC status. Crossing the thresholdBut crossing that threshold means more than just numbers — it’s a passport to better opportunities, global confidence, and, hopefully, fewer Filipinos left behind..Here’s why it mattersReaching UMIC status opens new doors:More investment from abroad, and from domestic sourcesBetter credit ratingsHigher-quality jobs and wagesImproved infrastructure, education, and healthcare, andA big confidence boost for the country's long-term plans (i.e. AmBisyon Natin 2040)But this isn’t just a matter of GDP. .Challenges: These are the key targets: Cheaper and more reliable power, via private investments Boost tourismImprove infrastructure (i.e. durable roads and bridges)Boost disaster resilience, and Continue to work for peace by solving decades-old communist and separatist insurgencies.In short: Efficient governance, fairer rules, and ensure no one gets left behind..Philippines: Mt. Mayon meets the world, Bicol airport set for international flights.The poverty-corruption nexusDespite significan progress made under the 1987 Constitution, generational poverty still haunts many corners of the country. This is especially so in rural areas, among informal settlements, and indigenous communities. Problems like poor education access, underemployment, weak social safety nets, and political patronage create a cycle that’s hard to break. The poor bear the brunt of corruption. A 2024 study conducted by Ateneo de Manila shows a strong correlation between dynasties and theft of public funds.Ateneo's findings: when political power is concentrated, based on the number of positions held by a single clan in a province, both are significantly and positively correlated with corruption risk. To test how corruption relates to concentration of political power, the research team used data from public procurement contracts (2004–2018). Then, for each province, the method synthesised data into a "corruption risk indicator (CRI)".Study's findingsCorruption risk can be measured locally using official government procurement data.Political dynasties exacerbate corruption, undermining democratic development.Dynasties amass unchecked power, weakening governance.Local malgovernance and impunity rise with dynasty dominance.Political structures need urgent reform.So if the Asian country wants to level up, it can’t just grow fast — it has to grow fairly.Peace doesn't come cheapHere’s the key point: there's no progress without peace. Academic studies (Bernstein & Heredia, 1989; Sacdalan, 2020) confirm that insurgencies — like the decades-old communist and Moro separatist rebellion — have hampered growth by scaring off investors, disrupting communities, and draining public resources. It's borne by hopelessness and frustration.A whole-of-nation drive to resolving conflicts clears the path for investments, education, and human capital to thrive.This is being carried out, i.e. through National Task Force to End Local Communist Armed Conflict (NTF-ELCAC) the Bangsamoro peace process.. Programs like the Barangay Development Program (BDP) bring roads, schools, health stations, and livelihood support to remote areas once influenced by the communist New People’s Army (NPA).Prioritising disarmament, demobilisation, and reintegration (DDR), also solves multiple problems at once. For example, while ex-Moro rebels are gradually being decommissioned and provided with economic packages, it also builds trust in historically neglected or conflict-hit communities.. NTF-ELCAC supports former communist rebels through the Enhanced Comprehensive Local Integration Programme (E-CLIP), offering cash, livelihood/training aid, and psychosocial support.Both processes are not easy.But Rome wasn't built in one day: significant achievements require time and effort.They entail hard work, dialogue, cultural sensitivity, and consultations. Going back to the flipside is a non-starter, unless the country only seeks mutually-assured despair. . Red-tagging and over-reach A major concern: red-tagging of activists, journalists, and civil society groups. This undermines trust, alienates communities, and contradicts the whole-of-nation peace narrative.Key: The NTF-ELCAC has made great strides in shifting from a militarised to a development- and dialogue-based approach to conflict resolution.It needs more safeguards against abuse and stronger accountability mechanisms. In short: It needs to be guided by the light of truth, not propaganda, vile hatred, thirst for blood, or self gratification.Reform or bustSo what needs to happen?Peace and security, these are two top prerequisites for investments and development in all fields.Smarter infrastructure, improved energy securityBetter schools and health systemsReforms in agriculture, governance, and industryClean and inclusive digital transformationA whole-of-nation push to reduce inequalityThe bigger pictureThe Philippines already offers free education up to university level. Matching the needs of the industry, especially manufacturing, and what universities teach needs a strong resolve. This could mean continued cost-of-living subsidies for the marginalised (like what both the UK and Singapore are doing), and the expansion of conditional cash transfer, while making both more efficient. In urban areas, it would need high-rise living for the low-income, i.e. to clear the Manila’s squatter colonies, or "informal settlers" (IS).Freed up land could be sold to finance IS development, and solve urban blight. Begin with the end in mind UMIC isn’t the finish line — it’s a stepping stone to a much bigger dream: becoming a high-income nation. If the Philippines pulls this off, it won’t just be a milestone on a spreadsheet. If the Philippines should rise one day, to stand where it deserves to be, it will be proof for the world to see — that peace and plows, not war, set nations free.When reforms are pushed, when faint voices are heard, and theft of public funds are curbed, a land once dispersed by toil and strife can lift its people, and sure to lead a better life.
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