"Philippines to reach upper middle class status in 2025"

Uhm-ok....How would that affect the cost of living of existing and would-be retired expats?

@Jackson4 it won't... all talk... Wheels turn very slowly here in Philippines.  If you make $1,000 u.s. plus per month on retirement (Social Security, etc..)  you will be fine for the foreseeable future.

Interesting the different definitions of upper middle class here. Australia I was middle class or so I thought, AU 70 to 80K per year to live, no debts and I could have been upper middle class but I put excess money into my retirement. so at todays rate AU 75K would be say 2.8M Pesos, Here (PH) we live comfortably on P 700K per annum, no loans etc. Construction here doesn't is a different story.

My labourers here I pay 500 per day, was 450 but upped their wages and advised by others are only paying 400 per day and I pay them too much, regardless even working on the 13 month rule here those guys only take home 156K per year and my lead guys, masons and steel workers average 210K. P.A

Let me tell you that they struggle day by day to raise their families and pay the bills, always a hand out for an advanced pay on Mondays, most of them.

Those guys to me are average and happy to work here they are certainly not middle class, for me I put them in the lower class economically, they are all to me poor and struggling. lovely hard working guys and if they could make it to a 4,5 or 600K figure per annum  I'm sure they would consider themselves wealthy and middle classed. Forget middle upper class, I see your submitted figures from a news clipping but wonder the validity and the true reality of their (government) submitted figures, doesn't relate to what I see and my short experience here of only 12 years.

To Jackson4's question, No effect to me as apparently westerners are all wealthy even if they are not.

OMO.

Cheers, Steve.

Philippines to reach upper middle class status in 2025, NEDA chief says
Manila Standard December 18, 2022 https://manilastandard.net/news/314288587/ph-to-reach-upper-middle-class-status-in-2025-neda-chief-says.html


The Philippines is likely to achieve its target of becoming an upper middle-income economy by 2025 said NEDA Secretary Balisacan today.

President Ferdinand Marcos Jr. has said in his first State of the Nation Address in July that his government is looking to bring the Philippines to “upper-middle income status by 2024” with “at least (US) $4,256 income per capita.”

But owing to the sharp contraction PH…of the economy in 2020 and the sharp depreciation of the peso this year “the entry into that category of countries — upper middle-income country — will now be 2025,” Balisacan said today during the weekly Saturday News Forum in Quezon City.

Under the World Bank’s updated standards, an upper middle-income economy or country has a gross national income (GNI) per capita of between $4,046 and $12,535 (about P225,000 to P696,000 at present exchange rates).

In 2019, the Philippines was categorized as a lower-middle income country with a GNI per capita of between $1,006 and $3,955 (P55,860 to P219,600).

Data from the Philippine Statistics Authority (PSA) showed the country’s GNI per capita stood at P182,438 (about $3,300) last year, higher than the peak of the pandemic year 2020 of P177,546 (about $3,200) but still lower than the pre-pandemic GNI per capita of P200,135 (about $3,600) in 2019.

Balisacan expressed confidence the country’s GNI per capita will hit $4,456 by 2025 “because at that level of per capita income, that’s when we meet the threshold of joining upper-middle economies.”

--
-@PalawOne

Yup in three years earn P760 per day and you will be upper middle class.

($4256 divided by 52 weeks. . . . $81.85 per week)

($81.85 divides by 6 days. . . .$13.64 per day)

($13.64 times P55.7 exchange rate. . . . . P760 per day.)

@PalawOne ,

It. has been many years since I last was deeply involved in data for GNI, GNI per capita, GDP, GDP PPP, and Population.  I do recall that one must always understand the "measuring stick" being used as compared to the exchange rates on the data for reaching the "upper-middle-class", as  being measured by Asia, Europe or the USA? 

Example:  A 2021 report on American economic classes revealed the following:

"For high earners, a three-person family needed an income between $106,827 and $373,894 to be considered upper-middle class".  The minimum USA class at this level means 55.6 X $106,827 = P 5,939,581.  Therefore, upper middle class for Americans equals Millionaire for Filipinos.  However, the World Bank normalizes those data based on local data sets and not different countries.

According to the World Bank, "As of 2021, the Philippines' GNI per capita was $3,640, a country must have a GNI per capita of $4,256 to $13,205 to be considered an upper middle-income economy.

Before any country gets excited about their GNI, a look at the World Bank's model and updates are in order.  As it relates to the PI, the levels of poverty and pay inequality will continue to slow the goal of reaching that status. 

In a report titled “Overcoming Poverty and Inequality in the Philippines: Past, Present, and Prospects for the Future”, the World Bank said;  "the Philippines has made important gains in poverty reduction. Driven by high growth rates and the expansion of jobs outside agriculture, poverty fell by two-thirds—from 49.2 percent in 1985 to 16.7 percent in 2018."  "Yet inequality remains high: the top 1 percent of earners together capture 17 percent of national income, with only 14 percent being shared by the bottom 50 percent. With an income Gini coefficient of 42.3 percent in 2018, the Philippines had one of the highest rates of income inequality in East Asia." 

All must be reminded of the fact that the Philippine GNP/GNI being larger than the GDP, is because it includes the value produced by the very large number of overseas Filipino workers (OFWs) with their remittances to their families coming thru banking channels.  It is the higher GNI that lifts the country the fastest and not the GNP. 

“The Philippines aims to become a middle-class society free of poverty by 2040, but we know from global experience that no country has managed to make this transition while maintaining high levels of inequality,” said Ndiamé Diop, World Bank Country Director for Brunei, Malaysia, Philippines, and Thailand.  Since the PI has informed the World Bank of it's intention to be poverty free by 2040, it is possible the  "upper-middle-class" status may be closer to that decade.

Source:  https://www.worldbank.org/en/news/press … of-poverty

And yet squatter settlements will still dot the countryside from north to south and slums will prevail in urban centers, spaghetti wiring will serve as a blight along most roadways and piles of garbage will act like milestones. Worst of all, hand outs will be sought at all levels for patronage and as a call to action. I love the Philippines and have respect for my wife, many of her family members and quite a few friends and associates , but the government can do better than its current management style/— at all levels.

Yes well, we agree gentlemen. Income is an important question for everyone

These figures are per-capita. That is, the income for every person (adult & kids)

Google says the latest Philippine middle-class household-income (4 people) is between PHP 43,828 to PHP 76,669.

So, taking a 55.5 US exchange rate, that makes the average middle-class household income from: $789 to $1,381 (US) per month.

So in round figures, for expats anyway, anything from (US): $800 to $1400 / month will be solid middle class and so doing fine apparently.

`

Hi B F, yeah I hear you it is what it is and we sit back and watch, the locals, even my better half for 12 years can't see the forest for the trees.

Squatter settlements were created by whom?

Cheers, Steve.

76,700 pesos  per year?

Cheers, Steve.

Yes BP apologies, Google says ..

Lower middle class              Between ₱21,194 to ₱43,828/month

Low income (not poor)         Between ₱9,520 to ₱21,194/month

Poor                                          Less than ₱10,957/month

I hear you P1 but would disagree with government figures related to middle upper income earners. Your figures or googles state low income at say 250K P/A?

700K per year makes middle upper class? Who or what percentage earn that figure in PH? It's averaged out to all citizens including those 10% earning 10's of millions and billions by some. Not a fair ratio. Reality is the average joe here is poor and from your OP living in PH? 90% live in poverty or sad situations but smile every day.

A creative prosperous country in the 50's 60's and 70's. What happened? we all know the answer. What has changed? Nada.

Opportunity knocks no matter country or beliefs.

OMO.

Cheers, Steve.

`

Calif sensibly writes, "one must always understand the "measuring stick" being used for reaching the "upper-middle-class." The Philippines aims to become a middle-class society free of poverty by 2040, but we know from global experience that no country has managed to make this transition while maintaining high levels of inequality.”

Source: https://www.worldbank.org/en/news/press … of-poverty

An informative and researched contribution to forum discussions

Thanks Cal

@Jackson4 it won't... all talk... Wheels turn very slowly here in Philippines. If you make $1,000 u.s. plus per month on retirement (Social Security, etc..) you will be fine for the foreseeable future.
-@Wellsfry

$1,000 a month?. . . .But for me it would not be the standard of living I was living in the middle class USA.

Start deducting from that $1,000 in the Philippines

-Rent for a suitable apartment or house.

-Medical expenses or prescriptions, more if you have a partner or family.

-Phone, internet, cable

-Food other than Rice or Lucky Me Noodles, more if you have a partner or family.

-Electric with no air conditioner and few appliances.

-Transportation costs

-Entertainment

-Personal items, more if you have a partner or family.

With a $1,000 a month you are closer to going native than middle class. People can adapt to anything, given time going native can seem normal.

Uhm-ok....How would that affect the cost of living of existing and would-be retired expats?
-@Jackson4

Good point and when it comes down to it this is what really matters for expats on this forum albeit perhaps one could say from a selfish perspective.

If you take an expat solely reliant on a state pension , which I guess applies to a good proportion of expats here, the average Filipino income would have to rise nominally much faster than the index linked ( I think our American friends refer to this as C.O.L.A) pension does to substantially increase the cost of living for an expat. It ain't gonna happen in the forseeable future.

'Waiter - another San Miguel premium please, Salamat Po.'

Yeah and I submitted my reply but disappeared, what's new here. Cutting it short, agree with Bob for a change and if you don't pay rent?  US 1k will be tight. pay rent and you will live like the locals.

Cheers, Steve.

@PalawOne if that is Philippine middle class income, then I do not think middle class includes a majority of Filipinos. A captain in the army for examples gets about 65K php per month. That is considered well above average and quite wealthy here. Teachers are at around 15K per month.

@Enzyte Bob That's why I at least believe in the future expats will need at least $2,500 min...if not $3,000 per month to live comfortable in the PH. The exchange rate we had of 58 or 59 php to 1 USD will not last forever. In fact we've seen it go down a bit in the last 2 to 3 weeks to 55+-. There's nothing to say it couldn't or wouldn't go back up, but expats will need extra $ to cover the future fluctuations we encounter.

I'm fortunate. I came here with 100k in the bank and waiting for measly $1600 month Social security to start paying. Our home is paid for. Now it's just making some improvements. I'm spending some money for these improvements but taking it slow too. I don't drink and have no desire to go to hang out at bars, nor does my fiance. We're not solely dependent on my income either as we have a profitable piggery worth a few hundred per month profit and her sari sari store pays water and adds a little to her savings. I'm setting up rotating t-bills for an added income of about $120 per month for the next year as well. Not big but it makes a difference.

I know we're not rich. Locals may think we are kinda rich. And by comparison, in some ways we are. But all I want is a nice quiet, humble retirement.

`

Sounds like you've got it all Larry 

No, not even. And I'm totally ok with that. I wanted to move here 7 years ago but I was way too broke, and too young for social security.  The last 4+ years I worked my ass off 70 hours per week, 320+ days away from home per year. Ratholing as much as possible with small amounts to spoil myself occasionally. I worked for my goal and now I can relax and be grateful.

Yes, I imagine lots here can relate to your planning. It takes quite some doing to be able to retire to another country later in our lives. It's not something that can happen without planning and work and often just some plain good luck as well. So Larry, congratulations.

So let's all hope that the country can live up to the hopes of all of the Philippine peoples, and also live up to our retirement dreams.

Yes, I imagine lots here can relate to your planning. It takes quite some doing to be able to retire to another country later in our lives. It's not something that can happen without planning and work and often just some plain good luck as well. So Larry, congratulations.
So let's all hope that the country can live up to the hopes of all of the Philippine peoples, and also live up to our retirement dreams.
-@PalawOne

Indeed, we hope for the best for others. Makes it better for all of us.

Philippines to reach upper middle class status in 2025, NEDA chief says

What does a guy from the "National Eating Disorders Association" know about life? 

Obviously nothing, not even that the GDP is a total worthless number to project any prosperity.

We are running into the worlds largest ever recession and people are still bullish, i cant get it.

@B F Blackstone i have been in the Philippines since 1993. I was full of optimism for this country then, seeing how good the people were, how richly endowed with resources, great geographical location and so on, but as years pass, i have seen marginal improvement in this country, when compared to neighboring countries, and I have come to realize that great potential can remain just that without high quality government, and this country does not have that. It is worse when this year they voted in a president whose family has looted the country big time one generation ago. It is not just those in power that messes up any more. I cannot see the Philippines doing any better in a few years time than today. In fact, with the government giving so little weight to education, as seen by how casually they shut kids out of school for two years during the pandemic, I would expect a loss of competitiveness in the years to come. Maybe it is the optimism that drove the president to think the Philippines is in a position to set up a sovereign wealth fund,  to me, it is a black comedy in the making.

@yiqipo

A cogent succinct summary Yiqipo.

........... It is like a box of chocolate.

@Harbred6051 I’m SRRV retired here. I’m not an analyst or financial guru BUT the idea that expat would need $3000.00 monthly to live middle class just doesn’t math. Even at P50 / dollar a local would need P150,000 monthly to live middle class. I have several friends here (couples with degrees ie professional) that have been at their jobs many years who  don’t come close to that kind of money. Like I stated, I’m not a money person

Obviously nothing, not even that the GDP is a total worthless number to project any prosperity.

We are running into the worlds largest ever recession and people are still bullish, i cant get it.
-@Lothar Scholz

You all have been warned, so plan accordingly

@Calif-Native yes, this

Economies of scale. If a person has monthly income (pension, SS, annuity, dividends, etc.) of US2k+, they should be fine in LCOL countries. G-8 countries,  not so much.

• @sekmet With a monthly income of 2K, you may be fine in the Philippines if you are frugal but in the US and EU you will be struggling for sure. I do not know what LCOL even means; as I have said b4, i h8 it when ppl abbrevi8  evryting.

LCOL = Low cost of living

I'll be planning on retiring in PH at 70 with monthly SS check of $2,745 a month, plus approx $450 a month from my 401K/IRA RMD's. Hopefully that should be enough for food , electricity/solar, gasoline, & utilities.

@Harbred6051 It depends upon where you live and desired life style. Many people would find that amount sufficient especially if you are single.

I'll be planning on retiring in PH at 70 with monthly SS check of $2,745 a month, plus approx $450 a month from my 401K/IRA RMD's. Hopefully that should be enough for food , electricity/solar, gasoline, & utilities.
-@Harbred6051

Not to mention high maintenance Filipinas

3,200 per month US? To survive here? That's ridiculous and then some, we survive here very well on US 1,200 per month or less and eat Salmon and prawns, buy what we want when and where, run a car (insured) and 2 bikes, live on the beach, own the home and retired comfortably at 60, should have done it sooner, b@gger working until 70.

OMO.

Cheers, Steve.

3,200 per month US? To survive here? That's ridiculous and then some, we survive here very well on US 1,200 per month or less and eat Salmon and prawns, buy what we want when and where, run a car (insured) and 2 bikes, live on the beach, own the home and retired comfortably at 60, should have done it sooner, b@gger working until 70.
OMO.

Cheers, Steve.
-@bigpearl

Thank you for that Big Pearl. I do not live there myself but your figure of US 1,200 is more what I expected which was somewhere between US 1400 and US 1800.

My plan currently (Im 57 now) is on retiring n moving to PH at 70 only cuz that's when I'll get the largest monthly SS check amount... but it doesn't mean I wouldn't consider modifying my plan n moving there at 67 or 68, as I will plan on having other $ from an IRA & 401K, & would be selling a house in the US & using that $ to build a house in Uptown Cagayan De Oro. I've (actually my wife) has already bought a tract of land there for future building.

... and eat Salmon and prawns

Cheers, Steve.
-@bigpearl

I live in the Visayas. Where did you find Salmon? Maybe frozen at a supermarket catering to expats? I can find fresh lapu-lapu and marlin at the market, and farm raised prawns for sure but never salmon. I have heard of people surviving on 1200 but for me, I would have to readjust a few things. Good for you!

@PalawOne Just a little correction: the average middle-class household income from $789 to $1,381 (US) is per annum, not per month.