The Philippines’ rise in the global competitiveness rankings by the World Economic Forum (WEF) survey proves that the country is making its mark and earning its niche in the global community, analysts said on Wednesday.
But there are challenges the government must overcome to sustain the momentum, among which, inadequate infrastructure has been consistently mentioned as foremost, they said.
According to the World Economic Forum (WEF) Global Competitiveness Report 2014-2015, the Philippines climbed seven notches to 52nd place out of 144 countries, compared with last year’s 59th place out of 148 countries in the global competitiveness ranking. The country’s overall score in the ranking improved from 4.3 (on a scale of 1-7) in the 2013-2014 report to 4.4 this year.
Dividends of reform
Justino Calaycay Jr., analyst at Accord Capital Equities Corp., said that the reforms undertaken by the government seem to have been paying dividends.
“The WEF ranking is another feather in our cap, proving that certainly the country is making its mark and earning its niche in the global community–in fact, not only in the economic field but, recently and still ongoing in the sports arena,” he said.
Despite this, Calaycay noted that it will be critical for the country to further improve on, or at least sustain, its current ranking.
A critical issue affecting the country’s competitiveness ranking are the delays in the public-private partnerships (PPP) rollout, particularly for the construction of much needed infrastructure in the country, the analyst noted.
“The delays in the PPP rollout, probably resulting from government’s emphasis on ensuring a ‘graft-free’ process, are one major reason we have lagged in this area. But this is not completely without remedy,” he said.
Roadblocks to progress
However, Calaycay said that there are still obstacles, like the controversies over the Philippine Development Assistance Fund, Development Acceleration Program (DAP), and the use of public funds in general, which may put some roadblocks in front of plans to increase infrastructure development.
In addition, the upcoming 2016 national elections put a definite time limit on starting publicly funded infrastructure projects, because of the election ban on public construction.
“The government must speed up the process without sacrificing its integrity. We must not lose sight of the lessons of the past where projects that were ‘fast-tracked’ almost always found themselves surrounded by controversy soon after,” he said.
Sharing the same view, Bank of the Philippine Islands economist Nicholas Antonio Mapa said that it is clear the government needs to continue to ramp up its reform efforts, “as the survey may have captured the perceived special treatment given to friends of the President in the Cabinet as well as the recent pork barrel and DAP issue.”
On infrastructure, Mapa said the PPPs have not been able to deliver the much anticipated boost to the decrepit state of infrastructure, and thus the government must continue to ramp up infrastructure spending. Mapa pointed out that several infrastructure issues have already existed for some time and may in fact limit the immense growth potential of the country.
“In order to fully realize the potential of this consumption-led growth we have, our burgeoning private sector will need to find support in the government’s efforts to build up our infrastructure to at least regional levels. Only then will we be able to maximize the potent purchasing power of the Filipinos,” he said.
Govt pledges boost to investment
For its part, the government welcomed the WEF ranking result, and vowed to continue its efforts to make the Philippines more competitive.
In a statement on Wednesday, Finance Secretary Cesar Purisima said the improved global competitiveness ranking of the Philippines is a clear indication that the platform of “good governance is good economics” remains the cornerstone of the growing competitiveness and development of the country.
Purisima said that the encouraging development augurs well for sustained positive business sentiment in the Philippines but noted that the government is aware of other opportunities yet untapped in creating an even more attractive and level playing field.
“The government has aligned its priorities with these opportunities, such as greater investment in quality infrastructure, so we may reap their benefits in the coming years. With these efforts in place, I am confident that the Philippines will go on to cement its role as a major economic player in this region,” he said.
In a separate statement, Budget and Management Secretary Florencio Abad said the WEF has recognized the government’s efforts to curb the very same corruption that has long stymied the country’s progress.
“What we are now seeing is that our governance reforms are bearing fruit. We’re pleased that the world agrees,” Abad said.
Abad also said that the Department of Budget and Management is determined to pursue more budgetary reforms in line with the government’s good governance and economic reform agenda.
He noted the transformation of the country’s budget processes toward increased transparency, accountability, and openness are central to the economic gains it has made in the last four years.
“We will continue to hew these reforms very closely to the President’s governance and development priorities,” he said.
“The Philippines has already made a name for itself as one of the world’s most promising economies. There’s no reason why we can’t do better, as long as we’re guided by our drive for good governance, and as long as Filipinos remain engaged in our work of bureaucratic transformation,” Abad concluded.