This article analyzes the reasons behind the Philippines' struggle to break free from the middle-income trap, drawing parallels with South Korea's rapid economic ascent. It highlights key challenges such as reliance on low-value service industries, weak infrastructure, governance issues, and a loss of talent due to overseas work. The author suggests reforms needed to attract investments, foster innovation, and achieve high-income status, emphasizing the urgency for national transformation.
LAST January, the flagship World Development Report of the World Bank Institute of Economic Development was published in distilled format. The condensed form — courtesy of the Korea Development Institute School of Public Policy, the University of Chicago and the Growth Academy — was to provide clear and easy guidelines for policymakers.Based on the report, I will explain why the Philippines is stuck in the lower-middle-income trap, and what we can do to get out of it.
According to the World Bank, countries in the lower-middle-income bracket have a gross national income per capita between $1,146 and $4,515 as of 2023. Those in the upper-middle-income have GNI per capita between $4,516 and $14, 005.The report shows the Philippines with $3,950 GNI trailing Vietnam , which overtook us in 2020. Indonesia , Thailand and Malaysia seem to be stuck in the trap, too, but are in a better position to improve their respective standings.
Economics Development PHILIPPINES ECONOMY MIDDLE-INCOME TRAP DEVELOPMENT SOUTH KOREA GLOBAL TRADE INFRASTRUCTURE
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