PH up 6 places in global

competitiveness
By Amy R. Remo |Philippine Daily Inquirer
7:22 am | Thursday, September 5th, 2013
69653302

Presidential spokesman Edwin Lacierda. INQUIRERFILE PHOTO
MANILA, PhilippinesGiven significant improvements in governance,
innovation and drive against corruption, the Philippines has moved up six
notches in the global competitiveness ranking to the 59th place this year, out
of 148 economies.
Although the climb this year was slower than 2012 when the country jumped
10 notches to the 65th spot, the Philippines was still regarded among the
most dynamic and rapidly improving economies in terms of competitiveness,
said the Global Competitiveness Report 2013-2014. The World Economic
Forum (WEF) released the report on Wednesday.
The Philippines has also overtaken India, which took the 60th spot.
Singapore remained the highest ranking among Asian countries and has
taken the second spot, next to Switzerland, which the WEF again named as
the most competitive country in the world. Taking the third to fifth spots are
Finland, Germany and the United States.
Presidential spokesperson Edwin Lacierda hailed the report, saying that it
noted the countrys impressive performance despite what administration
critics describe as a jobless growth.
The sustained improvement was credited heavily to the Aquino
administrations battle against corruption, which is seen in the significant
improvements in the benchmarking scores of the institutions pillar that covers
such governance challenges such as corruption and public sector
competence, Lacierda said.
In the ethics and corruption category, the Philippines now ranks 87th
compared with 135th in 2010, while government efficiency and other public
sector variables have also steadily advanced, he said.
Man in street
While the ranking looked promising, the man in the street will not appreciate
these numbers until we see the impact, which is never immediate, said
Guillermo M. Luz, National Competitiveness Council cochair for the private
sector.
Unfortunately, it takes time for these things to happen, Luz said in a
phone interview yesterday.
Over time however, ranking high in competitiveness surveys will help improve
the countrys ability to attract and stimulate investments, which in turn will
generate more value-added job opportunities for Filipinos.
Luz said this was the only way to fight poverty, which remained prevalent in
the country.
Without its improved performance in these rankings, the Philippines may have
had lower job creation numbers over the past years, he said.
Government performance
In a text message, Peter Angelo V. Perfecto, executive director of the
Makati Business Club (MBC), shared the sentiment of Luz, saying that global
competitiveness rankings are a gauge of how a government is performing.
Improved rankings mean that government is doing its job better. Also, global
competitiveness rankings are monitored by potential investors. Improved
rankings can mean more investments and more investments mean
more jobs, Perfecto said.
The WEFs Global Competitiveness Report is an annual publication that
measures productivity and competitiveness by gathering data on 119 factors
that are grouped into 12 pillars or categories.
The 12 pillars are institutions (governance); 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.
Based on these pillars, the Philippines recorded an overall score of 4.3, up
from last years 4.2.
The trends are positive across most dimensions. The current government,
which came into power in 2010, has made the fight against corruption an
absolute priority; corruption had historically been one of the countrys biggest
drags on competitiveness, the WEF said in the report.
It noted that the recent successes of the government in tackling some of the
most pressing structural issues are encouraging and proof that bold reforms
and measures can yield positive results.

Low base
The WEF, however, cautioned that improvements are coming from such a
low base that the country cannot afford to be complacent.
In a briefing, Luz said the country was able to boost its rankings in nine out of
the 12 pillars, identifying these as innovation, which rose 25 notches to 69th
from 94th; institutions, which include governance, up 15 places to 79th; and
financial market development, up 10 spots to 48th place.
The rest of the pillars where the country posted improvements were goods
market efficiency (up four notches to 82); labor market efficiency (100th from
103rd); infrastructure (96th from 98th); health and primary education (96th
from 98th); technological readiness (77th from 79th); and, market size (33rd
from 35th).
Over the years, the biggest contributors include the institutions pillar, which
has really improved every year for the past three years. Actually,
macroeconomic environment has been a driver except for this year when it
slid back a little bit. But if you take a look at the macroeconomic performance
of the country, it is well within the top third, Luz said.
The countrys ranking in macroeconomic environment eased back to No. 40
this year from last years No. 36.
High education fell
The National Competitiveness Council attributed this to the fact that
improvements such as the countrys credit rating upgrades occurred after the
data collection period. The high education and training pillar fell three spots to
67th place, while the countrys ranking in terms of business sophistication
remained the same in 49th place.
Dragging the countrys competitiveness over the past year used to be
infrastructure and education, but according to Luz, the country has managed
to reverse this given the gains in the nine pillars.
In the same briefing, MBC chair Ramon del Rosario reported that of the 119
indicators listed in the Global Competitiveness Report, the Philippines ranked
among the top 50 countries in 33 areas.
These included financing through local equity market, domestic market size
index, affordability of financial services, GDP in purchasing power parity
dollars, reliance on professional management, cooperation in labor-employer
relations, soundness of banks and ease of access to loans.
The Philippines, according to del Rosario will need to improve in certain areas
where it ranked No. 100 or even worse.
These include the number of procedures to start a business, burden of
customs procedures, business costs of terrorism, number of days to start a
business, hiring and firing practices, quality of port infrastructure, quality of air
transport infrastructure, flexibility of wage determination, strength of investor
protection, total tax rate, irregular payments and bribes, and business costs of
crime and violence.
Primary education worst
As chair of the Philippine Business for Education, let me express my
particular concern over the low primary education enrollment rate in our
country, which remains the only indicator where the Philippines rated the
worst in Asean. It must be noted, however, that figures used to rank the
Philippines in this indicator were derived by the WEF from Unesco, Del
Rosario said.
Luz, however, expressed confidence that the Philippines would further
improve its competitiveness ranking and be included in the top third quartile
within the next two to three years.
We want to [rank] 48th or higher and were getting close. We used to be at
the 85th place in 2010 when this administration took over and now were at
59th. The 48th rank is well within our target within the next two years, Luz
added.
Closing gap
Among the 10 member states of the Asean, the Philippines ranked sixth, but
Luz was quick to note that the country was closing the gap with its
neighbors.
[The other countries] have had such a big lead on us like Singapore,
Malaysia, Thailand and Brunei. Weve been closing the gap as weve
overtaken Vietnam, and increased the gap with Cambodia. Weve also
narrowed the gap with Thailand, while Singapore has been remarkably
consistent and its a tough competitor to go against, Luz said.
If you take the broader Asian region, across say 15 economies including
India and China, were holding our own. But we cant be complacent so we
need to move faster, more aggressively. But remember, over a three-year
span, we are still one of the fastest moving economies.
When this administration came in 2010, were at 85th place and today were
59th and thats a whole different neighborhood, a tougher neighborhood. We
need to rise up to the challenge, Luz added.
Finance Secretary Cesar Purisima has expressed confidence that the
countrys remarkable performance would be sustained over the next years.
As we make progress in further solidifying the gains of good governance, I
fully expect to see the Philippine business environment become even more
vibrant, more dynamic, and, most importantly, more open and welcoming of
opportunity, he said. With a report from Michael Lim Ubac and Michelle V.
Remo


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