Intense competition brings PH ranking in ASEAN down

The drop in the competitiveness ranking of the Philippines to seventh out of nine ASEAN countries ranked by the World Economic Forum (WEF) basically illustrates the intensity of the competition in the region, the National Competitiveness Council (NPC) said.

Guillermo M. Luz, private sector co-chairman of the NPC, said this in a statement that corrected the country’s official ranking at 7th instead of 8th in this year’s WEF Global Competitiveness Report (GCR) as earlier stated by the Makati Business Club.

Luz cited that six countries all improved their performances in the last year.

“One aspect of concern for us should be that two countries in ASEAN – Brunei and Vietnam – have now overtaken the Philippines to take the fifth and sixth positions in the region,” said Luz.

Brunei improved its ranking by 12 spots this year while Indonesia improved by five.

Globally, the Philippines ranked 56th out of 137 economies worldwide in the latest WEF GCR, basically holding steady versus its ranking of No. 57 last year. The country maintained its score of 4.4 on a scale of 7.

Among the strong areas of performance for the Philippines was its macroeconomic environment, ranked No. 22 in the work. The country is ranked highly in such areas as inflation management (No. 1), government debt as a percentage of GDP (No. 33), country credit rating (No. 48), and, government budget balance as a percentage of GDP (No. 24).

“We simply cannot afford to let up in our efforts to improve processes, introduce reforms, and make the country more competitive because other countries are also working hard,” Luz said.

The Philippines also improved performance in higher education (from No. 58 to No. 55), quality of primary education (No. 75 to 66), labor market efficiency (from No. 86 to 84), and market size (from No. 31 to 27). Market size reflects both an increase in population and consumer power.

In the Financial Markets category, the country was also cited for its soundness of banks (No. 35) and Regulation of securities exchanges (No. 36). However, in spite of the soundness of the banking system, the country received moderate downgrades in the areas of financing through local equity markets (from No. 30 to No. 38), ease of access to loans (No. 46 to 54), and venture capital availability (No. 65 to No. 70).

In the Technological Readiness category, the country was cited for improvements in the number of internet users as a percentage of the population (No. 92 to No. 75) and the number of fixed broadband internet subscribers as a percentage of population (from No. 92 to No. 88). However, service levels have been challenged by this growing user base with indicators on internet bandwidth, mobile-broadband subscriptions, and mobile-cellular telephone subscriptions all being ranked lower this year versus last year.

For investors surveyed by the World Economic Forum, the key challenges associated with the Philippines continues to be the inefficient government bureaucracy, inadequate infrastructure, corruption, tax regulation, and tax rates. Different government programs in the Administrations 0-10 Point Priority Program are currently addressing these issues.