UMIC classification seen as draw for foreign investors

THE Department of Trade and Industry (DTI) said the Philippines’ reclassification as an upper-middle income country (UMIC ) is expected to attract more foreign investment.

In a statement on Sunday, the DTI said UMIC status is a “powerful green light for international capital.”

“This upgraded classification is set to strengthen the country’s credit profile, boost investor confidence, and signal to global enterprises that the Philippines is stable and primed for manufacturing, innovation, and regional expansion,” the DTI said.

The World Bank bumped up the Philippines to UMIC after it posted gross national income per capita of $4,850, putting it within the bank’s threshold for the income bracket.

The Philippines is growing its network of free trade agreements (FTAs) while approving more investments, the DTI said.

The government is targeting 23 expanded FTAs and international partnerships, with talks ongoing for trade pacts with Chile, South Korea, and Canada, the DTI noted.

In 2025, the Board of Investments approved P1.56 trillion in investments, while the Philippine Economic Zone Authority tallied 314 new and expansion projects valued at P260.89 billion.

Separately, former legislator Jose Ma. Clemente S. Salceda called for a review of the official development assistance (ODA) law, warning that the Philippines’ UMIC status could limit future aid.

He said OECD (Organisation for Economic Co-operation and Development) concessionality rules already recognize lower thresholds for higher-income developing countries. For ODA, the grant-element threshold is 15% for lower-middle income countries and 10% for UMIC.

“Our law may now require more concessionality than the development finance market can reasonably offer us,” Mr. Salceda said in a statement.

He also cited the need for openness to blended finance.

“UMICs cannot rely on traditional concessional lending alone. We will need financing structures that combine grants, concessional loans, guarantees, private capital, climate finance, and domestic public funds,” Mr. Salceda said. — Beatriz Marie D. Cruz