The Philippines has inched closer to its goal of being ranked among the world’s most economically competitive, the National Competitiveness Council (NCC) said Thursday.
In a statement, NCC said the Philippines moved up 5 places in the latest IMD World Competitiveness Report to No. 38 in 2013 from No. 43 in 2012.
“Our goal is to move from the bottom third of world rankings to the top third by 2016. The 2013 report now places the Philippines in the middle third of the list and out of the bottom-third position,” NCC said.
A total of 60 economies around the world were reviewed for the 2013 report, which took into account a country’s economic efficiency, government efficiency, business efficiency, and infrastructure.
The Philippines has overtaken Indonesia and India, and is now ranked 11th in the Asia-Pacific, up from 13th place in 2011. Although the Philippines ranked 4th among 5 Asean economies reviewed in the report, it still registered the largest gain in the last year.
The IMD World Competitiveness Report reviews four major factors. The Philippines improved its ranking in three of the four factors—economic performance (from 42nd to 31st), government efficiency (from 32nd to 31st), and business efficiency (from 26th to 19th).
The double-digit improvement in economic performance can be attributed to big gains in real GDP growth, growth in exports of goods, and international trade.
The 6.6-percent GDP growth in 2012 was the second highest not only in Asia, but also in the latest World Competitiveness Yearbook report.
The GDP growth also boosted overall productivity growth, measured as change of real GDP per person employed.
The country is also ranked 5th in stock market performance, with the continued upswing in the local index.
But the improvement in business efficiency did not translate to job generation. The Philippines is actually down seven places in employment (29th), and is 59th in the level of overall productivity and labor productivity.
For government efficiency, the gains in fiscal policy and institutional framework were offset by the decline in public finance to 38th place (down six notches) and business legislation to 51st place (down two notches).
While reform measures seem to have begun to take effect, they must be implemented with increasing urgency and scope.
The 2013 World Competitiveness Yearbook echoes the results of the 2012-2013 Ease of Doing Business Report of the International Finance Corporation and World Bank, which rated the Philippines poorly in terms of starting a business and paying taxes.
Overall, the Philippines is moving in the right direction, it said, citing the economy’s growth rates.
“We are confident that the pace will continue to pick up. The release of strong first quarter 2013 figures of 7.8 percent GDP growth is an indication that the momentum continues for the Philippines,” NCC explained.
It also pointed to government spending, which went up by 13.2 percent.