World Bank Moves Vietnam and Philippines into Upper-Middle-Income Category

The World Bank reclassified Vietnam and the Philippines as upper-middle-income countries on July 1, Fortune reported. The change places the two nations in the same category as Malaysia, Thailand and Indonesia. Vietnam posted 2025 GNI per capita of $4,970 while the Philippines reached $4,850, both above the $4,636 threshold that defines the group.

-China trade war and rising foreign direct investment, with the United States becoming its largest export market. The Philippines advanced on broad gains across major industries. Vietnam's economy expanded 8 percent in 2025, the fastest rate in Southeast Asia.

The government has set a target of 10 percent average annual GDP growth through the end of the decade and aims for high-income status by 2045. It has enacted economic reforms and is funding a $67 billion high-speed railway linking Hanoi and Ho Chi Minh City. The Philippines grew 4.4 percent last year after super typhoon Ragasa and a strong El Niño season produced roughly $24 million in losses.

Economic planning secretary Arsenio Balisacan said on July 2 that the country had pursued inclusive growth despite global and domestic shocks. The ASEAN+3 Macroeconomic Research Office projects 7.4 percent growth for Vietnam and 5.3 percent for the Philippines in 2026, above its 4.6 percent forecast for ASEAN overall.

Vietnam reported 8.4 percent GDP growth for the second quarter of 2026 on July 3, led by 10.5 percent expansion in industry and construction.

The University of Asia and the Pacific forecasts 2.6 percent growth for the Philippines in the same quarter.