The Philippines is expected to reach an upper middle-income level in the next four years, a result suggested by significant improvements in public sector management operations and social welfare programs in the country, the Asian Development Bank (ADB) said.
The Manila-based multilateral lender, in its Independent Evaluation’s 2016 Annual Evaluation Review of its operations and challenges for the region, said the Philippines along with other Asian economies will step up to become an upper middle-income economy following improvements in the countries’ infrastructure, public sector, and social welfare programs development.
“By 2020, ADB expects that Indonesia, the Philippines, and Sri Lanka will reach upper middle-income status,” it said.
In the review, ADB said significant improvement in public sector management operations is an encouraging sign, given the growing need to strengthen institutions and governance in Asia and the Pacific.
It said this approach has been instrumental in implementing gradual reforms and successfully achieving results in reform areas in Assam, India; the Philippines; and Vietnam.
Meanwhile, the lender said significant improvement in the performance of the education sector operations demonstrates that ADB can support this sector effectively.
“The timing is right for ADB to scale up its education portfolio as many Asian countries are trying to raise education, skill, and technology levels to keep pace with increasing wages,” it stated.
The ADB added that increasing access to health care services and providing better nutrition, particularly for children, are also effective tools to reduce the gap.
“There is ample evidence of the effectiveness of conditional cash transfer programs linked with education, health, and nutrition services in reducing poverty and income gaps within society (for example, in Brazil, Mexico, and the Philippines),” it pointed out.
The bank’s projection is even more optimistic than that of the government, as the National Economic and Development Authority’s (NEDA) expectation is that the Philippines will become an upper-middle income economy and eradicate extreme poverty and hunger by 2040.
“The Philippines shall be a country where all citizens are free from hunger and poverty, have equal opportunities, enabled by fair and just society that is governed with order and unity. A nation where families live together, thriving in vibrant, culturally diverse and resilient communities,” according to the Ambisyon Natin 2040 report, which contains the country’s aspirations over the next 25 years.
The country was a lower-middle income economy with $3,500 per capita in 2014. NEDA said to become an upper middle-income economy, the country must have a per capita income level of $11,000, similar to Malaysia’s today.