Headway in global competitiveness report
Amid the pork barrel scandal, things are looking good insofar as the competitiveness of the country is concerned.
I am referring to the latest Global Competitiveness Report recently released by the World Economic Forum (WEF), which the National Competitiveness Council (NCC), spearheaded by my friend Bill Luz, has been patiently monitoring.
This year, the WEF conducted a survey of 148 countries to determine their competitiveness.
In a nutshell, as reported by Bill in his e-mail to the NCC members, the Philippines improved its competitiveness rank for the third year in a row. The Philippines moved up six places from 65 last year to 59 this year. Over the last three years, the Philippines has moved up 26 places, starting from 85th place in 2010 to 59th place this year, or approximately 20-percent improvement in the short span of three years.
There are 12 major categories of competitiveness and we showed improvement in nine out of these 12 categories.
The key drivers for the improvement were Innovation, in which the Philippines moved up 25 places (from 94 to 69), Institutions (up 15 places from 94 to 79), and Financial Market Development (up 10 places from 58 to 48).
Modest gains were seen in Goods Market Efficiency (up four places from 86 to 82), Labor Market Efficiency (up three places from 103 to 100), Infrastructure (up two places from 98 to 96), Health and Primary Education (up two places from 98 to 96), Technological Readiness (up two places from 79 to 77), and Market Size (up two places from 35 to 33).
Notably, in the category of Institutions, which is the key measure for governance, large improvements were seen in terms of less wastefulness in spending public funds (up 23 places from 86 to 63) and less diversion of public funds due to corruption (up 21 places from 100 to 79).
Parenthetically, however, the rankings were done before the P10-billion scandal relating to the Priority Development Assistance Fund.
Despite the improvement in our ranking, there are still many areas for improvement.
The processes for obtaining licenses and permits for doing business remain a challenge. Our scores even deteriorated in number of procedures (down 8 places from No. 137 to No. 145) and period of days (down 6 places from No. 112 to No. 118) to start a business. In this regard, the NCC is spending a great deal of time and effort in developing solutions, which will be announced shortly.
Our scores also deteriorated in quality of airport infrastructure (down 1 place from No. 112 to No. 113) under the category of Infrastructure. The government must work double time on this area, as our extremely poor infrastructure is notoriously known in the global community. Infrastructure, together with unkind regulatory environment, is a principal factor in discouraging foreign businessmen in investing their money in the country.
Three years ago, the Philippines was ranked among the worse in the world in 25 out of the 114 indicators in the WEF report. Today, that “negative” list has been cut to 7 indicators. The plan is to remove all our performance indicators from the bottom 20 percent of the world in the next two years.
The overall goal is to move the country into the top 30 percent of global rankings by 2016. The Philippines has breached the top 40 percent compared to three years ago when the country was in the lower 61 percent of global competitiveness.
Significantly, the WEF report named the Philippines as one of “the most dynamic and rapidly improving economies in terms of competitiveness.” It is now ranked 6th out of the 10 Asean countries ranked in the report, compared to its second to the last ranking three years ago. We have overtaken Vietnam. The report further stated 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.”
Even more significantly, of the seven global indices on competitiveness released in the last 10 months, the Philippines has risen in all reports. These include the IMD World Competitiveness Yearbook, Transparency International’s Corruption Perception Index, Economic Freedom Index, the Global Innovation Index, and the WEF Travel and Tourism Competitiveness Index.
Needless to stress, these developments are very encouraging, and are convincing proofs that sustained and focused efforts will bring us up the ladder of world competitiveness.
Yes, THE FILIPINO CAN, as former Trade and Industry Secretary Jose Concepcion loved to say. To use the chant of the Ateneans like President Aquino, to whom much credit must be given for the country’s gains, ONE BIG FIGHT!!!
(The author is the co-managing partner and head of the Special Projects Department of ACCRALAW. The opinions expressed in this column are, however, strictly his personal views. He may be contacted at [email protected].)
