The Philippines’ newly attained upper-middle income country (UMIC) status will not immediately affect interest rates on loans obtained by the government from multilateral development institutions, Malacañang said Monday.
Palace Press Officer Claire Castro, citing Finance Secretary Frederick Go, said any adjustments to multilateral lending rates due to the country’s reclassification by the World Bank would likely take effect only after several years and would have minimal impact.
“The effect on multilateral loans will not take effect immediately. Most of them have a period to see if we maintain the status for about three years before there is an effect on loan rates. An effect is very minimal and only affects very few,” Castro quoted Go as saying.
“So, for 2026 or 2027, there will be no effect and if ever there is, it will be very minimal.”
Castro said any possible adjustments in borrowing costs resulting from the country’s elevation to UMIC status would not be felt within the next three years.
“Kung may ipapataw man, mababago ang rates, hindi pa po ito mararamdaman sa loob ng tatlong taon (If there are any changes in rates, these will not be felt within the next three years),” she said.
Asked whether the country’s upgraded status could affect grants extended to the Philippines, Castro said the Department of Finance (DOF) has yet to provide specific details.
Castro also said the country’s new status would not affect the government’s financing plans for the 2026 budget or the preparation of the proposed 2027 national expenditure program.
The clarification came after President Ferdinand R. Marcos Jr., during his official visit to Canada last week, noted that the Philippines’ elevation to upper-middle income status could eventually affect access to certain concessional loans and grants.
The World Bank recently upgraded the Philippines to upper-middle income economy status after the country’s gross national income (GNI) per capita reached USD4,850 in 2025, surpassing the threshold of USD4,636.
The Philippines had remained in the lower-middle income category since 1987.
Government economic managers have described the reclassification as a major milestone reflecting sustained and broad-based economic growth, with the country’s gross domestic product expanding by an average of 5.8 percent annually over the past five years.
Economic officials have also said the upgraded status is expected to improve investor confidence and strengthen the country’s position in global capital markets, while gradually reducing access to some concessional financing facilities traditionally available to lower-income economies. (PNA)