Few thought over three decades ago that this could occur. Vietnam was still one of the poorest countries in the world, while the Philippines was considered a development model for Southeast Asia.

In 1990, Vietnam's GDP was only about $6.5 billion, equal to nearly one-eighth of the Philippines' GDP of about $50.5 billion. Vietnam's per capita income at that time was only about $120, equal to about one-sixth to one-seventh (over $800) of the Philippines.

The gap remained very large in 2000 when the Philippines' GDP reached nearly $84 billion, almost three times Vietnam's figure of over $31 billion. However, since the early 1990s, Vietnam began entering a period of strong growth thanks to the Doi Moi (renovation) cause, opening up the economy and integrating internationally. The gap was continuously narrowed before the two economies were nearly equal in 2020.

The turning point appeared in 2022 when Vietnam surpassed the Philippines in GDP scale for the first time.

According to IMF estimates, by 2025, Vietnam's GDP would reach about $514 billion, higher than the $487 billion of the Philippines.

In the same year, Vietnam officially entered the upper-middle-income country group according to the World Bank's classification, when per capita GNI reached $4,970, creating a foundation toward the goal of becoming a high-income country by 2045.

The shift is even clearer in trade. If the Philippines was once one of the region's leading exporting nations, by 2025, its merchandise export turnover reached nearly $84.5 billion, while Vietnam's export turnover reached $473 billion.

According to the World Trade Organisation, in 2024, Vietnam accounted for about 1.8 percent of total global merchandise exports, ranking 18th in the world and 2nd in ASEAN, while the Philippines accounted for about 0.3 percent, ranking 44th.

Vietnam creates only about 0.5 percent of global GDP but contributes nearly 1.8 percent of world merchandise export turnover. This shows that the economy has become an important link in global supply chains and belongs to the group with the highest trade openness in the world.

Compared to other countries in the region, Vietnam ranks fourth in GDP scale (in 2025), closing in on Thailand and Indonesia with a scale of over $514 billion. Its per capita GNI ranks sixth, gradually closing in on Indonesia ($4,970 vs $5,120).

Escaping the middle-income trap

In 2025, the Financial Times assessed that with its current trajectory, alongside a reform-oriented government and a dynamic workforce, Vietnam is one of the very few countries with the opportunity to overcome the middle-income trap, something many developing economies fail to do.

After officially entering the upper-middle-income group in 2025, with per capita GNI increasing from $4,490 to $4,970, Vietnam set a target to become a high-income country by 2045.

However, this path has never been easy. Many economies have been stuck in the middle-income trap for decades. Among them, Thailand was once likened to a new "Asian tiger," but to date still cannot join the high-income group.

In a talk with VietNamNet, Dr. Le Duy Binh affirmed that institutional and economic reforms have helped Vietnam choose a suitable growth model, creating a foundation for a series of subsequent reforms.

From an economy operating under a subsidized mechanism, Vietnam has step by step transitioned to a market economy, opening up both domestic and international markets. He said this is an important foundation to promote production, attract investment, and create momentum for growth.

He believes that along with market expansion, Vietnam has diversified economic sectors, creating favorable conditions for the private sector and domestic and foreign investors to participate strongly in the economy.

“When there is a market, there will be production; when there is production, it will boost investment,” Binh said.

Assoc. Prof. Dr. Nguyen Huu Huan (University of Economics HCMC) argued that it is necessary to continue making institutional breakthroughs, creating a transparent business environment, equal competition, protecting property rights, and effectively unleashing social resources. 

The State needs to shift strongly from a management mindset to a development-enabling, taking businesses and citizens as the center.

Along with that, Vietnam must improve labor productivity and the quality of human resources, focusing on training a highly skilled workforce in fields such as technology, artificial intelligence, data, semiconductors, logistics, green energy, and international governance. Higher education, vocational training, applied research, and university-enterprise linkages need to be prioritized more, he said.

Manh Ha