PHL lags behind 3 Asean peers in competitiveness

WHILE the Philippines inched up one spot in the Global Competitiveness Report 2017-2018 by the World Economic Forum (WEF), it has been downgraded among its peers in the Asean.

The Makati Business Club (MBC), the WEF’s partner institute in the country, said among the 12 pillars ranked in the annual survey, the Philippines registered considerable improvements in “Market Size”, “Labor Market Efficiency” and “Higher Education and Training”. The Philippines’s overall ranking improved from 57th last year to 56th this year.

However, the Philippines’s highest-ranking pillar, the macroeconomic environment, dipped from the 20th spot in last year’s Competitiveness Report to 22nd place.

Each of the pillars reflects a specific ranking among 137 economies, just like the overall country scores.

Among Asean countries, the Philippines’s standing fell from the sixth spot from 2016 to eighth this year.

“The Philippines has slid further down among Asean countries, the only country with considerable decline in regional ranking,” the MBC said in a statement. Singapore remains as the most competitive in the region, despite its one-notch slide down to being third most competitive globally. The Lion City is now behind the United States in the global ranking.

Outpacing the Philippines are Indonesia, Vietnam and Brunei Darussalam; with five-notch gains each for  Indonesia and Vietnam and a whopping 12-spot improvement for Brunei.

MBC Chairman Edgar Chua expressed “tempered sentiments” at the mixed results but lauds the continuous drive for economic reforms.  “It is good to see that we have maintained our overall competitiveness and even moved one notch higher,” Chua was quoted in the statement as saying. “However, as we implement changes to improve, other countries are doing the same. In fact, Vietnam and Brunei have overtaken us this year.”

Chua added the MBC believes the country needs “to do much more at a much faster pace”. He said the business association is calling on Congress “to focus on passing priority bills identified by the business sector, especially the Comprehensive Tax Reform Program and not allow itself to be diverted by
various political maneuvers like impeachment proceedings.”

This year’s Asean ranking is the second year in a row the Philippines slipped among other economies in the bloc; the Philippines took the fifth spot among nine countries in 2015, then slid to the sixth spot in 2016.

Perhaps contributing to this laggard overall performance among the Asean group is the country’s performance on transport-related indicators. Each of the pillars have a subset of indicators and, according to MBC Executive Director Peter V. Perfecto, the Philippines is dead-last in almost all infrastructure-related indicators.

“The state of Philippine infrastructure is in dire need of attention and action,” Perfecto said. “While the quality of air-transport infrastructure was identified as one of the country’s greatest disadvantages [ranking 124th out of 137 countries], the quality of other infrastructure, such as roads and ports stand as big disadvantages, as well. In fact, we trail behind our Asean neighbors in almost all measures of infrastructure.”

He noted the Philippines ranked lowest in Asean in terms of “Quality of Overall Infrastructure”, in “Quality of Roads” and in “Quality of Air Transport Infrastructure”. “Implementing the plans under the ‘Build Build Build’ program is critical for the effective functioning of a growing Philippine economy,” Perfecto said.

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