The Philippine Economic Zone Authority (Peza) expects the country's elevation to upper-middle-income status by the World Bank to boost investor confidence, attract higher-value industries, and create new investment opportunities, while highlighting the need for faster reforms to remain competitive.
World Bank Reclassification
The World Bank recently reclassified the Philippines as an upper-middle-income economy after it posted an average gross domestic product (GDP) growth of 5.8 percent over the past five years, driven by broad-based expansion across major industries. The Department of Economy, Planning and Development attributed the milestone to sustained growth, sound macroeconomic management, and structural reforms.
Peza's Outlook
Peza Director General Tereso Panga said the upgraded status could encourage more manufacturers to locate in the Philippines to serve both the growing domestic market and export destinations. He added that the improved income classification strengthens the country's appeal to foreign and local investors by enhancing perceptions of macroeconomic stability.
The agency also sees an opportunity to attract technology-driven investments in advanced manufacturing, semiconductors, electronics, green industries, logistics, and artificial intelligence-enabled services.
Investment Approvals Surge
Peza's investment approvals have reflected growing investor confidence. From 2022 to 2025, the agency posted an average annual growth of 22.9 percent, with approved investments reaching P932.17 billion, surpassing the P877.8 billion recorded during the previous administration.
Economic Contribution
Peza said exporters in its economic zones account for about 60 percent of the country's annual exports of goods and services. It oversees 436 operating economic zones hosting 4,388 locator companies that employ more than 1.8 million workers and contribute about 13.53 percent of the country's GDP.
Need for Reforms
However, Panga said the country's higher income classification also raises investor expectations, with businesses demanding faster government services, reliable infrastructure, efficient logistics, stronger digital systems, and a more predictable regulatory environment.
Peza urged the government to accelerate ease-of-doing-business reforms, improve inter-agency coordination, and continue investing in power, water, transport, telecommunications, and logistics to sustain long-term investment growth.
