THE Philippines’ overall competitiveness ranking slightly improved this year, but the country has become less competitive when compared with neighboring countries in Southeast Asia.
Based on the World Economic Forum’s (WEF) Global Competitiveness Report 2017-2018 released Tuesday, the Philippines ranked 56th out of the 137 countries this year, from 57th in 2016.
However, Brunei and Vietnam have overtaken the Philippines, currently the eighth most competitive country among the a 10-member Association of Southeast Asian Nations (Asean). Bruinei claimed the 46th spot while Vietnam ranked 55th in the overall competitiveness ranking.
The annual WEF report measures a country’s competitiveness based on 12 pillars--institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size, business sophistication and innovation.
Under the goods market efficiency pillar, which includes the number of procedures to start a business, the Philippines ranked poorly. It ranked 136th, second to the worst globally, just behind Venezuela. Likewise, in the burden of custom procedures, it finished at a weak spot of 125.
The country was also identified in the pillars of goods market efficiency at 106th, infrastructure at the 97th spot, and institutions at the 94th.
However, it ranked 22nd in the macroeconomic pillar, driven by a manageable budget deficit and government debt. It also scored well in the market size pillar, ranking 27th due to its fast-growing gross domestic product.
Economic performance
For a local business leader, the results of WEF’s competitiveness report is not conclusive. “We should not be perturbed by this report. Our country is still considered to be the fastest-growing economy in Asia at seven percent (growth). We have strong economic fundamentals to sustain, or if not better this performance,” Soco said.
“We take this report as a guide to make sound policy changes immediately to improve our competitiveness in the global scale,” he added.
Strong contenders
While the Philippines improved a notch, Department of Trade and Industry 7 Director Asteria Caberte noted that other countries have been competing as well.
“Brunei improved its ranking by 12 spots and Indonesia by five. Six countries improved, thus pulling us down. That’s why we must improve our processes because other countries are also working hard,” she said.
In an Executive Opinion Survey, which was part of the WEF report, respondents identified inefficient government bureaucracy as the most problematic factor for doing business in the country. This was followed by inadequate supply of infrastructure, corruption, tax regulation and tax rates, respectively.
Past rankings
In 2016, the Philippines experienced a 10-notch drop in the ranking, from 47th in 2015. It was in 2009 that the country ranked the lowest, at the 87th spot.
In his remarks noted in the WEF report, Richard Samans, WEF head for global agenda, invited policymakers, business leaders, civil society leaders, academics, and the public to consult the performance of their countries in the and identify the main challenges and barriers to growth facing their economies.
“We invite all stakeholders to look beyond rankings and to analyze the evolution of each indicator and each concept covered, identifying areas of improvement and areas where economies are lagging,” he said.
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