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VERA FILES FACT CHECK: Marcos’ assertion that PH “stays on track” to achieve upper-middle-income status by 2023 needs context

President Ferdinand Marcos Jr. told the United Nations General Assembly (UNGA) that the Philippines remains “on track” to achieve upper-middle-income country status by 2023 “despite the challenges of the pandemic and global economic upheavals”.

This requires context.

STATEMENT

In his address to the 77th session of the UNGA on September 21 (Philippine time), Marcos Jr. said:

Despite the challenges of the pandemic and global economic dislocation, we remain on track to achieve upper-middle-income country status by next year. With continued investment in food, public health, education and other social services, we hope to become a moderately prosperous country by 2040. I am confident that we will achieve this vision.

Source: RTV Malacañang, ​Statement at the 77th session of the General Debate of the UNGA (speech) 20/09/2022September 21, 2022

DO

During a July 26 briefing following the president’s state of the nation address, Socioeconomic Planning Secretary Arsenio Balisacan said the country could achieve upper-middle-income country status by 2024 “assuming we achieve growth of 6.5% to 7.5% in 2022 and 6.5% to 8% in 2023.”

The World Bank has four categories of income which use gross national income (GNI) per capita as the main indicator. As of the current fiscal year 2023, these are low income ($1,085 or less), lower middle income ($1,086 to $4,255), upper middle income ($4,256 to $13,205) and high income ($13,205 or more).

Data from the global financial institution shows that the Philippines had a GNI per capita of $3,640 in 2021, ranking the country as a lower-middle-income economy.

Filomeno Sta. Ana III, Action for Economic Reforms Coordinator, explained in a September 28 email to VERA Files Fact Check: Duterte administration. But COVID-19 arrived and we went through a deep recession, delaying reaching upper-middle-income status.

He pointed out that the National Economic Development Authority’s projection for the country to improve its economic status is “if current growth is sustained.”

According to data from the Philippine Statistics Authority (PSA) as of August 9, the country’s gross domestic product (GDP) recorded a growth of 7.4% in the second quarter of 2022. GDP is the total amount of all products and services produced in the country over a certain period of time.

As per capita income in the Philippines “approaches the threshold to become upper-middle income,” Sta. Ana noted that global shocks and internal weaknesses “make it harder” for the country to meet its growth targets and achieve upper-middle-income status in the near future.

Sonny Africa, Executive Director of the IBON Foundation, also pointed out that GNI does not reflect “the reality of low income and family income, lack of safe and decent work, inadequate education, nutrition and health, poor housing, lack of clean water, sanitation and electricity, lack of assets and widespread vulnerability, exploitation and violence.

“Income distribution and all these other dimensions of poverty must be taken into account in any classification of the level of development of the country. The GNI fails to do that,” he said.

IBON Foundation is a nonprofit development organization that “seeks to promote an understanding of socioeconomics that serves the interests and aspirations of the Filipino people”.

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Sources

RTV Malacañang, ​Statement at the 77th session of the General Debate of the UNGA (speech) 20/09/2022September 21, 2022

The World Bank, Data updated September 16, 2022, accessed September 29, 2022

The World Bank, World Bank Country Groups and Lending Groupsaccessed September 29, 2022

Action for Economic Reforms, Personal communication (email), September 28, 2022

IBON Foundation, Personal communication (email), Sep 28, 2022