THE Philippines saw a four-point improvement in IMD’s World Competitiveness Rankings for 2019.
From 50th place in 2018, the Philippines now ranked 46 out of 63 economies in the business school’s annual assessment of the competitiveness of economies.
While this seems like good news, the country is far behind its neighbors in the Asia Pacific. Out of 14 economies in the region, the Philippines ranked 13th, just above Mongolia.
Singapore emerged as the most competitive in the world, ousting the United States, which now ranks third. Hong Kong retained its second spot. Rounding up the top 10 were Switzerland, United Arab Emirates, the Netherlands, Ireland, Denmark, Sweden and Qatar.
In the Asia Pacific, China ranked 14th while Taiwan ranked 16th. This was followed by Australia (18), New Zealand (21) Malaysia (22), Thailand (25), South Korea (28), Japan (30), Indonesia (32), India (43), the Philippines and Mongolia (62).
According to the study, the Philippines’ challenges in 2019 include the need to speed up and sustain investments in physical infrastructure, inadequate investment in human capital, poor digital competitiveness and future-readiness, the need to sustain investor and consumer confidence, and persistent political risks.
The Philippines ranked high in the labor market (10), domestic economy (12) and tax policy (14). It scored low in basic infrastructure (61), scientific infrastructure (59), education (58) and health and environment (56).
In an Executive Opinion Survey, majority of the respondents (84.9 percent) found the country’s skilled workforce its key attractiveness factor, followed by the dynamism of the economy (73.3 percent), cost competitiveness (58.1 percent), open and positive attitudes (57 percent) and high educational level (50 percent).
The IMD World Competitiveness Rankings, established in 1989, incorporate 235 indicators from each of the 63 ranked economies. The ranking takes into account a wide range of “hard” statistics such as unemployment, gross domestic product and government spending on health and education, as well as “soft” data from an Executive Opinion Survey covering topics such as social cohesion, globalization and corruption.
Data for the Philippines was provided by the Asian Institute of Management, Rizalino S. Navarro Policy Center for Competitiveness.
The Asia-Pacific region found 11 out of 14 economies either improving or holding their ground, led by Singapore and Hong Kong at top of the global chart.
Singapore’s rise to the top was driven by its advanced technological infrastructure, the availability of skilled labor, favorable immigration laws, and efficient ways to set up new businesses. Hong Kong held on to second place, helped by a benign tax and business policy environment and access to business finance.
The initial boost of confidence from US President Donald Trump’s first wave of tax policies appears to have faded in the United States, according to the ranking.
While still setting the pace globally for levels of infrastructure and economic performance, the competitiveness of the world’s biggest economy was hit by higher fuel prices, weaker hi-tech exports and fluctuations in the value of the dollar.
“In a year of high uncertainty in global markets due to rapid changes in the international political landscape as well as trade relations, the quality of institutions seem to be the unifying element for increasing prosperity. A strong institutional framework provides the stability for business to invest and innovate, ensuring a higher quality of life for citizens,” said Arturo Bris, IMD professor and director of IMD World Competitiveness Center. (MEA, PR)