Improving competitiveness

After falling nine notches last year, the Philippines saw its global competitiveness ranking recover slightly by four steps in the 2019 World Competitiveness Report. Out of 63 economies included in the annual report prepared by the Switzerlandbased International Institute for Management Development or IMD, the Philippines now ranks 46th – an improvement from its 50th spot in 2018.

The country saw its rankings improve in all four factors that are used for gauging competitiveness: economic performance, government efficiency, infrastructure and business efficiency. There are 235 indicators grouped under the four factors. The improvement for the country, according to the IMD, was driven by solid economic performance backed by sustained real GDP growth as well as increases in employment levels and the labor force.

It was mainly a partial recovery, however, and the country remains near the bottom of economies in the Asia-Pacific. Singapore and Hong Kong placed first and second, both globally and within the region. China and Taiwan ranked third and fourth regionally. Three other founding members of the Association of Southeast Asian Nations also ranked ahead of the Philippines in the AsiaPacific rankings: Malaysia placed seventh, Thailand eighth and Indonesia 11th. The Philippines placed 13th among the 14 AsiaPacific economies included in the study. Globally, the United States, Switzerland and the United Arab Emirates occupied third to fifth places.

The study details the areas where each economy needs improvement. For the Philippines, infrastructure has been a perennial weak point, with the country improving by only a notch from last year’s 60th ranking.

Also needing improvement are the subsectors of education, where the country ranked 58th, and development of human capital (60th). The country placed 44th in terms of risk of political instability.

Even slight improvements are welcome. The challenge for the country is to sustain reforms across all the four factors, not only to catch up with its neighbors but also to excel.