Losing competitiveness

The drop in the actual score was minimal, from 4.39 to 4.36. But other countries did better and edged out the Philippines, making the country plummet by 10 notches to 57th place in the latest Global Competitiveness Report drawn up by the World Economic Forum.

The development cannot be ignored particularly because it was the first drop in the competitiveness ranking for the country in nearly a decade. The National Competitiveness Council noted that the Philippines is in a “flat zone” – with a score so close to several other countries that even minor improvements in the others can result in a big drop in ranking.

Improvements in the scores of others, no matter how minor, indicate that they are performing better. And if the Philippines does not do better, the country may be left behind. For the nation to catch up, the competitiveness council is calling for more reforms particularly in the bureaucracy, infrastructure, technology and innovation.

The World Economic Forum had some good words for the Philippines, naming the country as one of the three best economic performers in Asia since 2007, along with China and Cambodia. Such positive assessments are welcome but must be sustained. And the 10-notch drop in the Philippines’ ranking indicates that the country is slipping.

President Duterte is starting to address red tape and reportedly wants to cut bureaucratic fat. But if he wants significant reforms, he will have to exert stronger pressure on executive agencies and local government units all the way down to the barangays to cut corruption, streamline services and make doing business easier.

Infrastructure remains inadequate; the problem has always been among the top concerns of the business community. If the Duterte administration wants the nation to catch up with others, more attention must also be given to two factors that directly affect competitiveness: innovation and technology. Both areas have always been weak in this country. And both are linked to education, which has improved over the years but has also been left behind in terms of quality by several of the country’s neighbors.

In boosting national competitiveness, it’s useful to bear in mind that others are doing better. No nation can afford to be complacent.