Philippines gets more competitive

The Philippines’ ranking as a competitive economy climbed two notches over the last year mostly because of improved scores on macroeconomic environment, labor market efficiency and financial market development, according to the latest World Economic Forum (WEF) report.

In its Global Competitiveness Index 2010-2011, the WEF reported that the Philippines ranked 85th with an index of 3.96 among 139 countries surveyed. The country placed 87th among 133 countries in the 2009-2010 report.

The Philippines ranked 125th in institutions; infrastructure, 104th; macroeconomic environment, 68th; health and primary education, 90th; higher education and training, 73rd; goods market efficiency, 97th; labor market efficiency, 111th; financial market sophistication, 93rd; technological readiness, 95th; market size, 37th; business sophistication, 60th; and innovation, 11th.

The Global Competitiveness Index is based on 12 pillars of competitiveness, providing a comprehensive picture of the competitiveness landscape in countries around the world at all stages of development.

These pillars include institutions, infrastructure, macroeconomic stability, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market sophistication, technological readiness, market size, business sophistication and innovation.

This year, over 13,500 business leaders were polled from 139 economies.
The survey was designed to capture a broad range of factors affecting an economy’s business climate.

The WEF report included comprehensive listings of the main strengths and weaknesses of countries, making it possible to identify key priorities for policy reform.

Behind neighbors

But the Philippines was still lagging behind its neighbors, with Malaysia ranking 26th; Thailand, 38th; Indonesia, 74th; and Vietnam, 59th.

The United States, the largest economy in the world, fell two notches to fourth position, overtaken by Sweden (second) and Singapore (third). The US ceded its top place to Switzerland.

The Nordic countries continue to be well positioned in the ranking, with Sweden, Finland (seventh) and Denmark (ninth) among the top 10, and with Norway at 14th. Sweden overtook the US and Singapore this year to be placed second overall. The United Kingdom, after falling in the rankings over recent years, moved back up by one place to 12th position.

“Policy-makers are struggling with ways of managing the present economic challenges while preparing their economies to perform well in a future economic landscape characterized by uncertainty and shifting balances,” Klaus Schwab, the founder and executive chairman of WEF, said.

“In such a global economic environment, it is more important than ever for countries to put into place the fundamentals underpinning economic growth and development,” he added.

Xavier Sala-i-Martin, professor of economics at Columbia University and co-author of the report, said that amid concerns about the outlook for the global economy, policy-makers must not lose sight of long-term competitiveness fundamentals amid short-term challenges.

“For economies to remain competitive, they must ensure that they have in place those factors driving the productivity enhancements on which their present and future prosperity is built. A competitiveness-supporting economic environment can help national economies to weather business cycle downturns and ensure that the mechanisms enabling solid economic performance going into the future are in place,” Sala-i-Martin added.

The World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agenda.

Incorporated as a foundation in 1971 and based in Geneva, the forum is impartial and not-for-profit. It is tied to no political, partisan or national interests. –Darwin G. Amojelar, Senior Reporter, Manila Times