The Philippines has risen to claim the 64th spot among 138 surveyed economies, up eight places, in the Enabling Trade Index, set out in the World Economic Forum’s (WEF’s) Global Enabling Trade Report 2014.
Since 2010, the Philippines has risen 28 places in the index, ranking 92nd out of 125 economies in 2010 and 72nd out of 132 economies in 2012.
The Enabling Trade Index “assesses the extent to which economies have in place institutions, policies, infrastructures and services facilitating the free flow of goods over borders and to their destination.”
Makati Business Club executive director Peter Perfecto said the improvement in the country’s ranking came despite persistent challenges in various areas.
He said the Philippines enjoys competitive advantages in 15 areas, including specific tariffs, tariffs faced, cost to export, cost to import, tariff dispersion, ease and affordability of shipment and available international airline seats in kilometers per week. They also include access to finance, share of duty-free imports, number of distinct tariffs, efficiency of clearance process, tariff rate, number of days to import, and ICT use for business-to-business transactions.
While there are increasing improvements in the manner in which trade is being conducted in the country, the Global Enabling Report also cited the top five most problematic issues in exports of goods to the Philippines. These are: the high cost or delays caused by domestic transportation; access to imported inputs at competitive prices; technical requirements and standards abroad; identification of potential markets and buyers; and, difficulties in meeting quality/quantity requirements of buyers.
Imports from the Philippines are also hampered by various issues. These are: burdensome import procedures; corruption at the border; tariffs; high cost or delays caused by domestic transportation; and high cost or delays caused by international transportation.
Under the WEF report, trade-enabling factors are classified under four categories: market access; border administration; infrastructure; and operating environment. Under these four sub-indexes are seven pillars which measure critical aspects of enabling trade: domestic market access; foreign market access; efficiency and transparency of border administration; availability and quality of transport infrastructure; availability and quality of transport services; availability and use of ICTs; and operating environment.
“The Philippines ranks 64th on the ETI, and 5th within Asean. The country does well on the domestic market access (19th) and foreign market access (26th) pillars, but room for improvement remains with respect to the other five pillars of the index. It ranks in the bottom half of the ETI sample in all of them. Border administration (71st) is mired by corruption and red tape, two factors also contributing to weakening the general operating environment (82nd). Like many countries in the region, the Philippines’ biggest weakness is the lack of adequate transport infrastructure (96th). The shortcomings are the most severe in the airport (105th) and port (107th) infrastructure. To make things worse, the availability and quality of associated logistics services remains largely insufficient (84th),” the WEF report said.
Under the WEF index, Singapore ranked first, with Malaysia in 25th spot and Thailand in 57th. Indonesia ranked 58th, several notches higher than the Philippines in Asean in the overall rankings. Other Asian countries in the WEF ranking are Vietnam (72nd), Cambodia (93rd), Lao DPR (98th) and Myanmar (121st).
The MBC has been the WEF’s partner institute in the Philippines since 1994, specifically in conducting the annual Executive Opinion Survey for the Global Competitiveness Report, Global Enabling Trade Report, Global Information Technology Report, Travel and Tourism Competitiveness Report and the Gender Gap Report.