The huge drop in the country’s ranking in the World Economic Forum’s (WEF) latest competitiveness report has set back the Philippines in its goal of breaking the top third in investor-anticipated economic indices, the National Competitiveness Council (NCC) said.
In a statement, NCC private sector co-chairman Guillermo M. Luz said the country needed to focus more on four challenges ahead: bureaucracy, infrastructure, technology and innovation.
“It is, of course, disappointing to experience this fall in spite of all efforts to improve competitiveness. Our score dropped minimally from 4.39 to 4.36 out of 7 but it was enough to bring us down by countries. The world is so competitive that even small changes make a big difference in ranking,” he said.
The Philippines fell 10 notches to rank 57th out of 138 economies assessed under the Global Competitiveness Report 2016-2017, marking the first time in a decade that the country posted a decline.
Based on the report, the Philippines saw a decline in seven of 12 pillars used to determine the competitiveness of an economy: institutions, infrastructure, goods market efficiency, labor market efficiency, technological readiness, business sophistication, and innovation.
“The country appears to be going backwards vis-a-vis its peers in some of the more complex areas of competitiveness. Its technological readiness ranking falls 15 places to 83rd; business sophistication drops 10 (places) to 52nd; and innovation falls 14 (places) to 62nd,” WEF said.
Despite the drop, WEF highlighted the Philippines as one of the three most improved economies in Asia and Pacific since 2007, along with China and Cambodia.
Other indices being monitored by the NCC include the Economic Freedom Index, WEF Global IT Report, WEF Travel and Tourism report, Global Innovation Index, and the World Bank’s Ease of Doing Business report.
Over the last five years, the Philippines has been making big leaps in selected global competitiveness reports, but more have to be done given the ongoing developments in the global and regional markets, Luz said.
The NCC has been aggressively crafting and implementing new programs that would help address the issues raised by the different competitiveness indices.
The latest of these programs is Project Repeal, an initiative that targets to repeal or amend an initial 17,300 department issuances identified as outdated, redundant or contradictory in order to help eliminate red tape and curb corruption. The project is expected to reduce the cost of compliance for both businesses and consumers, generate significant savings for the economy.