By Janina C. Lim, May 29 2019; Business World
Image Credit to Business World
THE PHILIPPINES has “partially recovered” in terms of global competitiveness, according to an annual report of the research group of Switzerland-based business school International Institute for Management Development (IMD) that put the country up four notches on improvements across four key factors after a nine-step fall last year.
But the improvement was not enough to lift the country from near the bottom in Asia and the Pacific.
IMD’s 2019 World Competitiveness Report placed the Philippines 46th out of 63 economies, up from 50th spot in the previous report.
But the country still languished in 13th place among 14 Asia-Pacific economies tracked by the IMD World Competitiveness Center, behind Singapore and Hong Kong, China and Taiwan, which bagged first to fourth places, respectively, in the region, as well Malaysia (seventh in the region), Thailand (eighth), Indonesia (11th) and India (12th). Mongolia was last in the region and 62ndglobally.
Singapore, Hong Kong, the United States, Switzerland and the United Arab Emirates occupied first to fifth place globally, while Venezuela languished at the bottom in 63rd place.
IMD said in an e-mail that the Philippines’ performance was “driven by a solid economic performance supported by sustained real GDP growth (6.2% in 2018) and an increase in labor force and employment levels.”
The study gauges competitiveness using 235 indicators grouped under four factors: economic performance, government efficiency, business efficiency and infrastructure.
For the Asian Institute of Management’s Rizalino S. Navarro Policy Center for Competitiveness that has been IMD’s Philippine partner in this annual study since 1997, “[t]he country partially recovered this year” after it saw “improvement in ranking in all four factors”: a 12-notch improvement to 38th from 50th in terms of economic performance, followed by a climb to 41st from 44th in terms of government efficiency, a rise to 32nd from 38th in terms of business efficiency, as well as a marginal improvement to 59th from 60th place in terms of infrastructure which is “perennially the lowest-ranked factor for the Philippines.”
IMD’s Executive Opinion Survey also bared top indicators watched by Philippine respondents, who were asked to choose five factors out of 15 which they saw as the country’s key drivers of attractiveness: skilled workforce (84.9%), dynamism of the economy (73.3%), cost competitiveness (58.1%), open and positive attitudes (57%), as well as high education level (50%). Rounding up the list were: quality of corporate governance (31.4%), access to financing (27.9%), effective labor relations (20.9%), business-friendly environment (19.8%), reliable infrastructure (9.3%), strong research and development culture (9.3%), competitive tax regime (9.3%), policy stability and predictability (9.3%), competency of government (seven percent), as well as effective legal environment (3.5%).
“To improve, the Philippines needs to strengthen all aspects of the infrastructure factor (where it ranks 59th) particularly that of the education sub-factor (58th) because the latter is fundamental for the sustainability of competitiveness. The development of human capital (60th) remains a challenge for the country as well as the risk of political instability (44th),” Jose Caballero, senior economist at the IMD World Competitiveness Center, said in an e-mail.
“Advances in policy stability and predictability, and a more effective legal environment will boost investor and consumer confidence.” — Janina C. Lim