The Philippines is one of the 10 countries with the fastest improvements in scores for “economic freedom” in 2015, US-based think tank Heritage Foundation said in a report.
In the “2015 Index of Economic Freedom” report, the think tank said that the Philippines ranked 76th out of 178 countries globally, jumping 13 notches from its global rank of 89th last year.
The level of economic freedom is believed to influence an economy’s ability to attract investments, generate employment, and boost incomes.
Heritage Foundation defines “economic freedom” as the right of any individual to control his labor and property, as well as to work, produce, consume and invest without unnecessary constraints.
In an economically free society, the think tank said labor, capital and goods move freely.
“The Philippines’ economic freedom score is 62.2, making its economy the 76th freest in the 2015 Index,” it said.
The report noted that the country’s score has increased by 2.1 points since last year, with notable improvements in financial freedom, freedom from corruption, and labor freedom outweighing declines in business freedom and the management of public spending.
In the Asia Pacific region, the Philippines ranked 13th out of 42 countries, an improvement from its regional rank of 17th last year. Its overall score is also above the world and regional averages.
“Registering one of the 10 best score improvements in the 2015 Index, the Philippines has charted an upward trajectory of economic freedom for the past five years, further advancing into the ‘moderately free’ category,” it stated.
The Heritage Foundation report pointed out that the country’s wide-ranging reforms to address structural weaknesses and improve overall economic competitiveness have put greater emphasis on improving regulatory efficiency, enhancing regional competitiveness, and liberalizing the banking sector.
“Demonstrating a high level of resilience and overcoming the devastating impact of the massive typhoon that ripped through the central part of the country, the Philippine economy has recorded an average growth rate exceeding 5 percent over the past half-decade,” it said.
Despite notable progress since 2011, however, lingering institutional challenges will require a deeper commitment to reform, the think tank said.
It mentioned that corruption continues to be a serious cause for concern, jeopardizing prospects for long-term economic development.
Lastly, the report said an inefficient judiciary, which remains susceptible to political interference, does not provide effective protection for property rights or strong and transparent enforcement of the law.
“The higher score in financial freedom reflects efforts of the Bangko Sentral ng Pilipinas [BSP] to bring about a more vibrant financial sector that helps boost—and at the same time enhance—inclusivity of the country’s economic growth,” BSP Governor Amando Tetangco Jr. said.
“We welcome this latest recognition of the Philippine government’s good governance agenda, which has created a real and positive impact on public spending and, consequently, on the country’s own economic development,” Budget Secretary Florencio Abad said.
The top five countries that registered the highest scores in economic freedom were Hong Kong (89.6 points), Singapore (89.4), New Zealand (82.1), Australia (81.4), and Switzerland (80.5).
On the other hand, the bottom five countries that registered the lowest scores were North Korea (1.3 points), Cuba (29.6), Venezuela (34.3), Zimbabwe (37.6), and Eritrea (38.9).