Business
The PHL’s competitiveness still lags behind the Asia-Pacific region
By means of Justine Irish D. Table, News reporter
THE PHILIPPINES saw its ranking unchanged in an annual global competitiveness report, remaining among the laggards in the Asia-Pacific region.Fic region amid a decline in sales efficiness.
The 2024 World Competitiveness Ranking (WCR) by the Switzerland-based International Institute for Management Development (IMD) ranks the Philippines 52nd.NL from 67 economies, unchanged from last year.
It also marked the seventh year that the Philippines remained in 13e place out of 14 Asia-PaciFIC economies included in the report.
Singapore topped the list this year, followed by Switzerland, Denmark, Ireland and Hong Kong.
This year, the index expanded its scope to Ghana, Nigeria and Puerto Rico. In 2023, there were only 64 economies covered by the index.
The IMD ranked the economies on the basis of 336 indicators, spread over four competitive factors: economic performance, government effectsFlicense, business efficence and infrastructure.
José Caballero, senior economist at the IMD World Competitiveness Center, said the factors that have reduced the Philippines’ competitiveness this year are related to government and business evolution.fficiness.
Mr Caballero said the country saw a decline in corporate law measures, such as foreign investor protection (65e), the transparency of public procurement (56e), the impact of state-owned enterprises (46e), and new business density (62NL).
Asian Institute of Management (AIM) Rizalino S. Navarro Policy Center for Competitiveness executive director Jamil Paolo S. Francisco said the Philippines remained in 52NL place despite a decline in two factors: business efficence and infrastructure.
The Philippines fell three places to 43rd on business efficency this year of 40e in 2023. SigniFSharp declines were observed in the labor market, Ffinance, management practices, attitudes and values.
“The decline in operating efficiency is particularly concerning as this was a factor that allowed the Philippines to perform relatively well a decade ago, and we have seen a steady decline in this factor since 2019,” Mr. Francisco said in an emailed statement.
In terms of infrastructure factor, the Philippines fell three places to 61st from 58 in 2024e last year. This is because challenges remain in basic infrastructure, technological infrastructure and education.
Mr. Francisco said the decline in the country’s infrastructure factor is worrying as it has long been the weakest area in the Philippines.
“This is also worrying because it means we are really lagging behind in providing the physical, human, technological and social infrastructure that private enterprises need to generate employment and create business value,” he added.
The Philippines maintained their 40e ranked by economic performance, as it rose three places to 49e about the government e.gFiciness.
Philippine Chamber of Commerce and Industry Chairman George T. Barcelon said the country must address basic and transportation infrastructure to be competitive.
“If you want to be competitive, especially in industry and services, you need to have some of the basic infrastructure in place, such as the availability of quality and aFfording power,” Mr. Barcelon said in a telephone interview.
“The other is the availability of mobility or connectivity such as roads, seaports, airports and main corridors for the agricultural sector, which we do not have,” he added.
The government must also address the deterioration in the skills of the country’s workforce.
“We are not giving them the right tools… The technology that is now needed for higher value-added jobs requires more, such as in information technology and in the fourth industrial revolution,” said Mr Barcelon. “There are some shortcomings in that. But that can easily be addressed if we strengthen more specific or targeted skills for certain sectors.”
According to the IMD, the Philippines was less competitive in corporate law (60e), basic infrastructure (62NL), and education (63rd).
“In 2024, the Philippines will face major challengesFThere are major challenges, including reviving economic dynamism and growth trajectory, managing inflation expectations, building sustainable physical, social and technological infrastructure to improve productivity and reduce vulnerabilities, and addressing territorial disputes in the West Philippine Sea to alleviate economic disruptions,” the AIM center said. .
Meanwhile, the Management Association of the Philippines (MAP) sees the country’s unchanged competitiveness as both good news and a challenge.
“Infrastructure is an important consideration, so we all understand our rank and the need to improve our infrastructure, which President Marcos’ administration is working on,” MAP President Rene D. Almendras said in a Viber message.
“The other consideration is labor productivity, which is a function of the training and development of the Philippine workforce,” he added.
Meanwhile, the National Economic Development Authority (NEDA) and the Anti-Red Tape Authority (ARTA) are hopeful that the country will improve its position next year as the government ramps up its infrastructure projects.
“With the strict implementation of this Executive Order No. 59 and related government programs, we expect our ranking to improve next year,” said ARTA Secretary Ernesto V. Perez.
ARTA on Tuesday launched the EO 59 implementation guidelines, which aim to streamline the government’s infrastructure permitting process Flagship projects.
“Hopefully, with the full implementation of EO 59, we can score even higher in the next round. Besides permits and processes, I think what is also covered are priority issues,” said NEDA Undersecretary Joseph J. Capuno.
He said these issues could be addressed by the ROW bill, one of the priority bills of Frederick D. Go, the special assistant to the president in charge of investment and economic affairs.
According to President Calixto V. Chikiamco, president of the Foundation for Economic Freedom, the Philippines will be able to achieve a better position in the global competitiveness index if protectionism is removed, especially when it comes to agricultural products.
“Protecting the agricultural sector indicates that there is no need to improve competitiveness and productivity,” Mr Chikiamco said in a Viber message.
He added that the country needs to sign more bilateral free trade agreements, amend the labor law, improve education and reduce bureaucratic regulations, especially in the granting of mining concessions.
According to IMD’s Mr. Caballero, highly competitive economies have focused on strengthening their public and private institutions, entrepreneurship and innovative capabilities.
For the Philippines, he said the country must strengthen its education system to “e.gFfectivity of talent development”, as it will also ensure alignment between the country’s available talent and socio-economic objectives.
The report ranks the country 55the in total government expenditure on education: 60e in the quality of primary education, and 63rd in secondary education in terms of student-teacher ratio.
“In addition, the Philippines’ performance in research and development is weak,” he added, citing that the country underperforms at all levels of expenditure and in terms of the total number of researchers and personnel.
