THE Philippines rose seven notches to 52nd place out of 144 competitive economies ranked by the World Economic Forum (WEF) in its Global Competitiveness Report 2014-2015 released Wednesday.
The Philippines ranked 85th in 2010.
The upgrade was based on improvement in the country’s macroeconomic environment, institutions, goods market efficiency, and innovation categories measured by the Global Competitiveness Index (GCI), according to the report.
The Philippines also continued to enjoy competitive advantage in financial market development, which forms part of the pillars of the GCI.
“In 1994, 80 percent of the economies surveyed were deemed more competitive than the Philippines. At present, the Philippines now ranks better than 64 percent of the economies included in the survey,” said Peter Pefecto, executive director of the Makati Business Club (MBC), which organized the Philippine launch of the report.
Perfecto announced at the launch held at the Asian Institute of Management Conference Center in Makati City, that eight of GCI’s 114 indicators have become new competitive advantages for the country: ethical behavior of firms, prevalence of malaria, business impact of malaria, availability of research and training services, international internet bandwidth, value chain breadth, production process sophistication, and company spending on research and development.
“The results suggest that the reforms of the past four years have bolstered the country’s economic fundamentals,” according to the WEF report, which reviewed the countries based on 12 pillars that evaluated areas such as government efficiency and infrastructure.
The trend across most of the 12 pillars are positive for the Philippines, and in some cases truly remarkable. In the institutions pillar (67th), the country climbed 50 notches since 2010, the report said.
It added: “In particular, there are signs that the efforts made against corruption have started bearing fruit: in terms of ethics and corruption, the country has moved from 135th in 2010 to 81st this year. The recent success of the government in tackling some of the most pressing structural issues provides evidence that bold reforms can yield positive results relatively quickly. A similar pattern is observed in terms of government efficiency (69th) and the protection of property rights (63rd)”
“Finally, the Philippines made significant strides in terms of technological adoption (69th, up eight). It is one of the best digitally connected developing Asian nations, closely behind Malaysia (60th) and Thailand (65th). The same cannot be said of infrastructure, however, which remains poor (91st), especially with respect to airport (108th) and seaport (101st) infrastructure. The situation is just as worrisome in the labor market, which suffers from rigidities and inefficiencies: the Philippines ranks a mediocre 91st in this dimension and almost no progress has been made since 2010. Finally, security remains an issue (89th), in particular in terms of costs that the threat of terrorism imposes on businesses (110th),” the report said.
Concern about infrastructure
Perfecto raised similar concerns over infrastructure: “I would really ask the government to focus on infrastructure because it has been the top issue for the longest time. Because of continued delay in the Public-Private-Partnership, now there is hesitancy on the part of government to spend because of the DAP issue, and there is a threat of slowdown this year.”
“The government should address the infrastructure issues of ports, seaports, airports, railways, MRT, the logistics and it is all about the system also. I think they should give a single, very aggressive pursuit of infrastructure,” he added.
WEF also started that, among the 20 largest emerging market economies, the Philippines, Malaysia, and the Russian Federation were the only ones to have recorded higher scores on public institutions, market competition, and labor market efficiency components of GCI since 2010.
The five largest Southeast Asian economies were all at the top half of the rankings, and all of them have made strides in this edition: Malaysia went up four notches, Thailand is up six, Indonesia four, the Philippines seven, and Vietnam advanced by two.
The other Asean members ranked as follows in the WEF report: Singapore, number 2, Malaysia no. 20, Thailand no.31, Indonesia no. 34, Vietnam no. 68, Laos no.93, Cambodia no. 95, and Myanmar no. 134.