Philippines Recalibrates P2.68 Trillion Borrowing Plan After $4,850 UMIC Upgrade

2 articles · Updated · Philstar.com · Jul 3

The Philippines is being urged to review its borrowing program after the World Bank upgraded it to upper-middle income status on July 1, a shift analysts say could gradually reduce access to concessional loans and aid.
At $4,850, the country’s 2023 GNI per capita cleared the UMIC threshold of $4,636, but economists said that status may push the government and companies toward commercial loans, private capital and bond markets with higher rates.
The Marcos administration plans to borrow P2.68 trillion this year, P3.043 trillion in 2027 and P3.04 trillion in 2028, while debt service is budgeted at P2.01 trillion in 2026, including P950 billion in interest.
Analysts said the upgrade could still improve creditworthiness and attract foreign direct investment, but warned it does not by itself deliver faster growth, lower inflation or stronger public finances without revenue and spending reforms.
Critics said the country risks losing cheap development finance before fixing poverty, jobs and weak public services, and urged Manila to use its remaining concessional funding window for health, education, renewable energy and agriculture.