Philippine now more competitive, jumps in global competitiveness report

By Randell Tiongson on September 5th, 2012

Here’s more good news about the Philippines — our economy is growing and continues to grow!

Bill Luz of the National Competitiveness Council (NCC) sent out a statement through email about this awesome news. Posting the release below:

 

 

 

5 September 2012                                                                                                     

Philippines jumps another 10 spots in global competitiveness report

Country now ranks No. 65, up 20 positions in the last two years

 We are pleased to announce that the Philippines has jumped another 10 spots to No. 65 out of 144 economies in the World Economic Forum’s 2012/2013 Global Competitiveness Report from No. 75 the year before. This is the second year in a row that the country has risen by 10 ranks in the report. The Philippines is only one of two countries worldwide which has made a double-digit jump in the last two years. Coming from No. 85 only two years ago, this also marks the first year that the country has broken into the top 50% of the world rankings since it was first included in the report in 1994. The country once ranked in the bottom 25% of the world’s economies.

In last year’s report, we reported that the key drivers for improvement in the rankings came in the areas of Macroeconomic Environment, Technological Readiness, Market Efficiency for Goods, and Institutions or Governance. The key constraints came in the areas of Institutions and Governance, Infrastructure, Innovation, Labor Market Efficiency, and Education.

Over the last year, the government – through the National Competitiveness Council, working in partnership with government agencies across a broad front – concentrated its efforts on building up the competitiveness position of the country. That work has begun to gain some traction and has resulted in improved rankings in 11 of the 12 categories covered in the Global Competitiveness Report.

In the area of Institutions which measures governance, security, private sector ethics, and accountability, the country recorded its largest gain, up 23 positions from No. 117 in 2011/12 to No. 94 in 2012/13. The largest gains were made in the areas of property rights (up 31), less diversion of public funds (up 27), higher trust for politicians (up 33), less irregular payments or bribes (up 11), more fair awarding of contracts (up 19), less favoritism in government decisions (up 31), less wastefulness of government spending (up 23), more transparency in policy formulation (up 23), ethical behavior of firms (up 31), strong audit and reporting standards (up 21), and stronger minority shareholder interests (up 27).

However, the judiciary and security situations continued to be rated low by investors. Judicial independence was rated No. 99 while the quality of judicial decisions was rated No. 111. The efficiency of the legal framework in settling disputes was rated No. 107. The business costs of fighting terrorism, crime, violence, and organized crime were all rated below No. 100.

The Macroeconomic Environment continued to make great gains, jumping 18 spots to No. 36 worldwide. The management of the budget, national savings rate, and general government debt all received high scores.

In Infrastructure, one of the weak spots last year, the country rebounded with a gain of 7 from No. 105 in 2011/12 to No. 98 in 2012/13. While the overall quality of physical infrastructure jumped in rank by 15 to No. 98, only road quality jumped significantly by 13 to No. 87. Port and airport infrastructure continued to be ranked poorly at No. 120 and No. 112, respectively. While the quality of electricity supply improved by 6 spots, it still remained low at No. 98.

Higher education and training began to show some positive gains, up 7 to No. 64. In particular, the quality of primary education jumped 24 positions to No. 86 while secondary and tertiary education quality improved by 16 spots to No. 45. Science and math education jumped 17 positions to No. 98. Interestingly, the enrollment levels for primary, secondary, and tertiary levels recorded dropped by 20 and 1 respectively to No. 101 for primary and No. 76 for tertiary. We attribute the trend to investors’ recognition of gains made in the start of the new K-12 program but that enrollment rankings may reflect lags in the posting of data by international institutions.

In Financial Market Development, the country improved by 13 to No. 58, mainly on the strength of gains in the regulation of exchanges (up 18) and the already strong position in availability and affordability of financial services.

The country also recorded a turnaround in the area of Labor Market Efficiency with a jump of 10 to No. 103. The greatest gains were made in labor-employer relations (up 17), pay and productivity (up 19), reversal of the brain drain (up 20), and the reliance on professional management (up 12). However, inflexibility of wage determination (down 15) continued to remain a drag on labor markets.

Gains were also recorded in Technological Readiness and Innovation, particularly in the areas of FDI and technology transfer (up 26 to No. 40), company spending on research and development (up 27 to No. 58), government procurement of advanced technology (up 19 from a low base to No. 107), and intellectual property protection (up 15 to No. 87).

Plenty of work remains on the business transaction side, with major improvements needed in reducing the number of steps to start a business (No. 137), number of days to start a business (No. 112), burden of customs procedures (No. 126) and total tax rate (No. 102).

Much work also remains to be done in the primary health sector, where rankings in malaria and tuberculosis treatment and lower life expectancy all ranked below 100 in global tables. Infant mortality still ranked only No. 91 worldwide.

The gains would not have been possible without the efforts put in by the NCC Board and 11 Working Groups and staff which each focus on a problem area and the various Cabinet departments and agencies assigned to each of these problems. On behalf of the board, I wish to thank all the public and private sector individuals for their collective efforts to achieve this unprecedented back-to-back 10 country jump in the past two years. We will continue to remain focused and committed to improving our ranking to be able to meet our target of being in the top one-third of global ranking by 2016.

In this regard, the National Competitiveness Council has expanded its programming to now include Regional Competitiveness Committees (presently in 12 regions across the country), more Monitoring and Evaluation efforts, including large-scale surveys and small customer satisfaction surveys, and our new Dialogues series to enable people to be informed, get engaged, and act to bring about positive change in the country.

Thank you.        

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3 thoughts on “Philippine now more competitive, jumps in global competitiveness report”

  • Hi Randell,

    Be careful not to fall for everything that the government feeds the public. For all we know, they have a cunning and deceptive Media Management Team whose objective is to use every possible tool (including social networks) and media personality to brainwash and mind-condition the public to project a great economy and that things are nice and rosy while they continue their corrupt practices and hide behind them. The article above has every blatant and brazen attempt to insult the public’s intelligence: “Less diversion of public funds (up 27), higher trust for politicians (up 33), less irregular payments or bribes (up 11), more fair awarding of contracts (up 19), less favoritism in government decisions (up 31), less wastefulness of government spending (up 23), more transparency in policy formulation (up 23), ethical behavior of firms (up 31), strong audit and reporting standards (up 21), and stronger minority shareholder interests (up 27)”. C’mon, do they really expect us to believe this?!? We’re talking about Philippine politicians, for goodness sakes! I have friends who work with government and they swear that the corrupt practices mentioned above is well and alive today. I’d also check on the background of Bill Luz, Randell. I’m not sure if he’s still the Chairman of the Makati Business Club but from what I remember, he’s a Liberal. It’s a common practice used by government and military officials worldwide for decades: If you continuously feed people with a lie, sooner or later it will become the standard truth.

    Brian

  • With all due respect Brian, it’s the World Economic Forum’s 2012/2013 Global Competitiveness Report which increased the rating of the Philippines in terms of the factors listed above. It’s not as if someone from Malacanang’s media bureau came up with their own numbers to publish.

    Reading your post, there seem to be some indications of bitterness with the contents of the statement:

    “For all we know, they have a cunning and deceptive Media Management Team whose objective is to use every possible tool (including social networks) and media personality to brainwash and mind-condition the public to project a great economy and that things are nice and rosy while they continue their corrupt practices and hide behind them” – Are you insinuating that the credibility of the World Economic Forum is being compromised by your so called “cunning and deceptive Media Management Team”?

    “The article above has every blatant and brazen attempt to insult the public’s intelligence” – strong words Sir. Hopefully it’s not just about the flowery words that you used in this statement. If there could be some facts that can back up these assertions.

    “C’mon, do they really expect us to believe this?!? We’re talking about Philippine politicians, for goodness sakes! ” – Global competitiveness is not all about the politicians Sir.

    “I’d also check on the background of Bill Luz, Randell” – What’s the need for that? You can just download the report from the source itself: http://www.weforum.org/issues/global-competitiveness. I don’t think Ninoy Aquino’s assassination in 1983 can be disputed regardless of whether the story came from a historian or a cigarette vendor if you get what I mean.

    I do agree that there’s still corruption going on in the country. I don’t think there is one country which can claim it’s 100% corruption-free. But to question the findings of a report created by a credible and respected institution, the World Economic Forum in this case, just because of claims of corruption that cannot even be quantified and coming up with correlations that would not pass simple logic is a bit off mark.

    It’s good to hear such news that the image and perception of the Philippines in the global economic landscape is improving. This is a testament to the collective efforts of all stakeholders of the Philippine economic system. Let’s be positive about our mindset regarding these developments and knowing that there are still things that can be improved on, let’s do our share in driving those improvements!

    Just my two cents!

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Philippine now more competitive, jumps in global competitiveness report