Trailing the neighbors
After a deadly bomb attack in his home city forced President Duterte to cancel his trip to Brunei, he proceeded yesterday with his trip to Vientiane for the summit of the Association of Southeast Asian Nations. It is his first summit and overseas trip as President, and it is a significant one: Laos will be handing over to the Philippines the rotating chairmanship of ASEAN for 2017.
The President can consider the ASEAN chairmanship as an opportunity to compare the progress of the Philippines against those of the four other founding members of the grouping. ASEAN is marking its 50th year in 2017 with the Philippines lagging behind the founding members in several human development indicators. Even with strong macroeconomic fundamentals, the Philippines is near the bottom of the heap in many aspects when compared with Singapore, Malaysia and Thailand.
The latest Business Sentiment Survey conducted among some 200 investors from the European Union who are doing business in Southeast Asia is just the latest reminder that the Philippines must exert more effort to improve its regional competitiveness. In terms of ease of doing business and the investment climate, the Philippines received the poorest ratings among the so-called ASEAN 6 including Brunei.
The EU-ASEAN survey reflected the strength of the Philippines, which garnered top ratings in the availability of skilled and competitively priced labor and the ease of hiring workers from abroad. In several indicators, however, the country trailed the ASEAN 6.
The Philippines ranked lowest among the six in terms of government incentives for business and in the stability of government and the political system. It ranked fifth in the quality of infrastructure, regulatory regime and business-friendly customs procedures. Its fiscal structures and administrative costs for business were rated fourth. The country ranked third in ease of importing goods.
Except for the indicators on the quality of the workforce, Singapore topped the survey, followed by Malaysia. Indonesia received the lowest ratings in seven of the 11 indicators. The Philippines at least was picked after Thailand as the most favored destination for the EU to pursue a free trade agreement. Within ASEAN, the Europeans have concluded talks for FTAs with Singapore and Vietnam.
Investments mean jobs and opportunities for lifting people out of poverty. The Philippines was the regional leader when ASEAN was established half a century ago. As ASEAN chair, President Duterte should aim to make the country improve its standing in the region.