Phl slips 3 notches in global economic freedom index

The Philippines slipped three spots in terms of economic freedom as weak rule of law outpaced improvements in trade freedom and judicial effectiveness, the 2018 Index of Economic Freedom (IEF) of Washingtonbased think tank The Heritage Foundation showed.

The Philippines got an economic freedom score of 65.0, higher than the world average score of 61.1.

However, the country's score decreased by 0.6 point from its 2017 score of 65.6, pulling down its global ranking to 61st place out of 186 countries.

The Philippines was ranked 58th last year.

"Its overall score has decreased by 0.6 point, with lower scores for the government integrity, monetary freedom, and property rights indicators outpacing improvements in trade freedom and judicial effectiveness," the Heritage Foundation said.

Despite the drop in world rankings, the country improved its spot in the Asia-Pacific region at 13th among 43 countries. The IEF is an annual survey published since 1995 by the Heritage Foundation.

The 2018 Index graded economies based on 12 independent factors namely: property rights, government integrity, judicial effectiveness, business freedom, labor freedom, monetary freedom, government spending, tax burden, fiscal health, trade freedom, investment freedom, and financial freedom.

These factors are group in four categories: rule of law, government size, regulatory efficiency and

open markets.

INVESTOR CONFIDENCE WANED

According to the Heritage Foundation, the Philippines recognizes and protects property rights, but enforcement is weak.

"Property registration is tedious and costly, and records management is poor," it added.

The Heritage Foundation also took note an "absence of entrepreneurial dynamism" in the Philippines, which "thwarts development."

"A rapid decline in the president’s popularity caused investor confidence to wane by the end of 2017," it added.

The Heritage Foundation also said the country's judicial system remains weak and vulnerable to political influence.

"Some fiscal reforms have been adopted, but deeper institutional reforms are required in interrelated areas: business freedom, investment freedom, and the rule of law," it added.

"Government openness to foreign investment is above average. The gradually modernizing financial sector remains relatively stable and sound," the think thank said.

Heritage Foundation cited that the government has increased subsidies under President Duterte and maintains price controls on pharmaceuticals and some food and household fuel items.