The World Bank has elevated Vietnam and the Philippines to upper-middle-income status -- but now they face 'a far more demanding phase of development' | Fortune

The World Bank’s decision to upgrade Vietnam and the Philippines to upper-middle-income status is a milestone, but it also signals a tougher growth phase ahead. The bank classifies countries using Gross National Income (GNI) per capita from the year before, placing them in upper-middle-income if 2025 GNI per capita falls between $4,636 and $14,375. Vietnam and the Philippines reported $4,970 and $4,850, respectively. The World Bank cited Vietnam’s export boom and the Philippines’ broad-based growth across major industries. Vietnam’s economy grew 8% last year, while the Philippines expanded 4.4% after super typhoon Ragasa and heavy losses tied to a strong El Niño season. Looking forward, ASEAN+3 projects 7.4% growth for Vietnam and 5.3% for the Philippines in the year ahead. Still, experts warned that entering this income bracket can trigger a “middle income trap,” as maintaining fast growth becomes harder. The article also notes Vietnam’s goal of 10% average GDP growth through the decade and a plan to reach high-income status by 2045, including a $67 billion high-speed railway project.