The Philippines’ competitiveness in trade logistics improved in the past two years, such that its rank jumped to 60th place among 168 countries in this year’s edition of a biennial World Bank report.
The report titled “Connecting to Compete 2018: Trade Logistics in the Global Economy” showed the country’s ranking move up from 71st among 160 countries in 2016.
The Philippines’ Logistics Performance Index (LPI) score also rose to 2.9 this year from a score of 2.86 two years ago.
The World Bank explained that the LPI has six components, namely: customs, infrastructure, international shipments, logistics quality and competence, tracking and tracing, as well as timeliness.
“The LPI survey data provide numerical evidence on how easy or difficult it is in these countries to transport general merchandise-—typically manufactured products in unitized form,” the World Bank said in the report.
Lower middle-income economies
The World Bank said that among lower middle-income economies, the Philippines was the fifth top performing in 2018 after Vietnam (ranked 39th with LPI score of 3.27), India (44th with score of 3.18), Indonesia (46th with score of 3.15) and Cote d’Ivoire (50th with score of 3.08).
In 2014, the Philippines placed 57th with an LPI score of 3; it ranked a higher 52nd with a score of 3.02 in 2012.
Across the six LPI components, the Philippines ranked the highest in international shipments, placing 37th with a score of 3.29.
Timeliness
The country’s lowest LPI ranking of 100th place, meanwhile, was in timeliness, with a score of 2.98.
In customs, the Philippines was at 85th spot with a score of 2.53; in infrastructure, 67th (2.73); logistics quality and competence, 69th (2.78); and tracking and tracing, 57th (3.06).
World Bank data that aggregated the Philippines’ LPI rankings as well as scores in 2012, 2014, 2016 and 2018, showed that the country had a mean rank of 64th, with an average score of 2.91.
Among the countries covered by this year’s report, Germany has the highest LPI score of 4.2, while Afghanistan scored the lowest of 1.95.
Logistics
“Logistics services are the backbone of international trade. Good logistics reduce trade costs, but supply chains are only as strong as their weakest link. For developing countries, getting logistics right means improving their infrastructure, customs, skills and regulations,” said Caroline Freund, director of the macroeconomics, trade and investment global practice at the World Bank Group.
“With international trade becoming more dispersed through global value chains, good logistics are more important than ever. Small disruptions to a supply chain can spread rapidly to other countries and regions,” said Christina Wiederer, economist with the World Bank Group’s macroeconomics, trade and investment global practice and the report’s co-author.