Philippines inches up to 51st spot in global competitiveness index

The Philippines improved one spot in a global competitiveness index, but remained a laggard in the Asia-Pacific region, according to the Asian Institute of Management Rizalino S. Navarro Policy Center for Competitiveness (AIM RSN PCC).

Citing Switzerland-based International Institute for Management Development’s (IMD) 2025 World Competitiveness Yearbook (WCY), the center said that the Philippines ranked 51st out of 69 economies.

AIM RSN PCC is the IMD’s partner in the Philippines.

Despite the improvement in ranking, the Philippines still lagged its neighbors, ranking 13th out of 14 Asia-Pacific economies in the index.

Singapore ranked second in the global index, while Hong Kong ranked third and Taiwan placed sixth.

The Philippines was also behind Malaysia (23rd), Thailand (30th) and Indonesia (40th).

The WCY, which started in 1989, ranks economies across four competitiveness factors: economic performance, government efficiency, business efficiency, and infrastructure.

For this year, the report covered 69 economies, up from 67 last year, following the addition of Kenya, Namibia, and Oman.

Switzerland placed first in the overall ranking.

In a statement, AIM RSN PCC said that the Philippines’ results this year are “a mixed bag,” as improvements were seen in two out of the four pillars.

In particular, the country’s rank in the economic performance pillar improved to 33rd in this year’s report, up seven spots from 40th place last year, after only seeing a marginal drop in the international investment sub-factor.

“The rest of the sub-factors saw improvements to their rankings, with the prices sub-factor improving the most by climbing nine places from 48th in 2024 to 39th in 2025,” AIM RSN PCC said.

“The domestic economy indicator improved from 27th in 2024 to 22nd in 2025, the international trade indicator improved from 58th in 2024 to 55th in 2025, and the employment indicator rose from 10th in 2024 to 7th in 2025,” it added.

On the other hand, the Philippines moved up one spot to 60th in the infrastructure pillar, which has been a “perennial challenge” for the country in previous years.

“The basic infrastructure sub-factor (60th spot from 62nd) and technological infrastructure sub-factor (43rd spot from 55th) saw improvements to their respective rankings,” AIM RSN PCC said.

However, the center said that declines were seen in the scientific infrastructure sub-factor (62nd spot from 60th) and the health and environment sub-factor (61st spot from 60th).

Meanwhile, the country slipped three notches in the business efficiency pillar to 46th in 2025 and dipped two spots in the government efficiency pillar to 51st.

The AIM center said that the results of the report reflect the challenges the Philippines continues to face, such as “rekindling the country’s economic dynamism and growth trajectory, addressing inflation expectations, promoting investments in inclusive technology, improving education and healthcare, and adapting to shifting global economic and geopolitical dynamics.”

Sought for comment, Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said that the slight rise in the country’s competitiveness ranking is a “positive signal.”

However, he noted that the Philippines falling behind regional peers shows a need for deeper reforms.

“Prioritizing digital infrastructure, streamlining bureaucracy, and investing in talent development can help us close the gap and compete more effectively,” Mr. Ravelas said in a Viber message.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the net improvement in the ranking “may be partly attributed to the easing inflation trend that justified local policy rate cuts.”

He also sees the country’s economic growth, which is among the fastest in Asia, may drive competitiveness.

To further improve the ranking, Mr. Ricafort said the country needs to “further develop infrastructure, boost productivity in agriculture and manufacturing industries, bring down electricity costs, and further ease and reduce the cost of doing business.”

PH1page_WCY_2025.pdf

Download PDF • 74KB

Source: Business World

PH digital competitiveness drops

The Philippines' digital competitiveness has fallen for a second straight year based on an annual ranking released on Thursday by Switzerland's Institute for Management Development (IMD).

The country was 61st out of 67 economies in the 2024 list, produced by the IMD's World Competitiveness Center (WCC). This was down from 59th last year when it lost three spots from 56th in 2022.

It was next to last among 14 Asia-Pacific countries, unchanged since 2020, and 25th among 30 economies with populations of more than 20 million, also the same as last year.

Singapore continued to lead the list while the United States experienced a three-place drop to fourth. Switzerland and Denmark took second and third, respectively.

Singapore's top ranking was said to reflect its advanced city management, prolific high-tech patent grants, and robust banking and financial sectors.

Switzerland, meanwhile, improved in terms of high-tech exports and cybersecurity, and Denmark was strong in the areas of employee training, e-governance and secure internet servers.

In contrast, the US saw declines in its attitude to globalization, international managerial experience and increasing fears of failure among entrepreneurs.

The IMD ranking measures digital competitiveness using three main factors — knowledge, technology and future readiness — and the Philippines lost places with regard to the first two.

It was 64th in terms of knowledge, 56th in terms of technology — down from last year's 59th and 63rd, respectively. It edged up, however, to 58th from 59th in the area of future readiness.

Broken down further, the Philippines' rankings also slipped with regard to sub-factors under the three main categories.

It fell to 60th from 56th in terms of talent, 61st from 58th in scientific concentration, and remained 62nd in training and education — all under the knowledge pillar.

Sub-factor rankings under technology all fell: 66th from 63rd for regulatory framework, 45th from 41st for capital and 53rd from 43rd in the area of technological framework.

Improvements, however, came in the future readiness sub-factors of adaptive attitudes (52nd from 59th) and IT integration, 58th from 60th, although a drip to 54th from 50th was seen in the area of business agility.

There were some bright spots for the country: it was second overall in terms of female researchers (under scientific concentration) and high-tech exports (technological framework).

It was 22nd with regard to science graduates (training and education), 9th in telecommunication invest ments (capital), and 19th in flexibility and adaptability (adaptive attitudes).

The biggest weaknesses, meanwhile, were in the areas of artificial intelligence (AI) articles (66th, scientific concentration), secure internet servers and communications technology (64th and 66th, respectively, under technological framework), and starting a business and enforcing contracts (65th and 64th, regulatory framework).

The country's main challenges, according to IMD partner the Rizalino Navarro Policy Center for Competitiveness of the Asian Institute of Management, are:

– sustaining job-generating investments;

– ensuring food security to temper inflation and keep prices affordable;

– addressing learning gaps to improve the education system;

– building sustainable infrastructure to reduce climate change vulnerability; and

– resolving the Philippines' territorial rights to the West Philippine Sea diplomatically and peacefully.

Jose Caballero, senior economist at the WCC, said that geopolitical rivalries — particularly between the US and China — were fragmenting the global digital landscape.

Geopolitical tensions have also become a defining feature in shaping digital competitiveness, the IMD said.

Economies, the business school said, will have to grapple with the pace of technological change and capability requirements.

Countries that effectively exploit the power of new technologies such as AI, blockchain and quantum computing, it added, "are likely to enhance their digital competitive advantage, leading to sustained economic growth, improved productivity and greater global influence.

Source: Manila Times

PHL competitiveness to depend on pace of infra upgrades

The Philippines’ ambitions for attracting investment will hinge on improvements to its digital and physical infrastructure, according to the Asian Institute of Management’s (AIM) competitiveness policy center.

Jamil Paolo S. Francisco, executive director of the AIM Rizalino S. Navarro Policy Center for Competitiveness, said that the Philippines will have to do better in indicators like annual global competitiveness rankings, parts of which measure infrastructure quality.

Asked for his recommendations, he said: “I guess the most basic one is really infrastructure. Not just physical infrastructure, but also digital and human infrastructure.”

“We are lagging there. So, we have to make it faster, and we have to do more,” he added.

Citing the 2024 World Competitiveness Ranking (WCR) by Switzerland’s International Institute for Management Development, he said infrastructure can be classified into four parts: basic, human, scientific, and social.

The index placed the Philippines 52nd out of 67 economies, retaining its spot from last year. In terms of the components of the rankings, the country ranked the lowest in infrastructure at 61st, down from 58th last year.

“10 or 15 years ago, there was already a long list of things we had to check in the infrastructure pillar,” said Mr. Francisco. “Now, it not only involves hardware but also software.”

He said that previously, the Philippines had to deal with basic infrastructure like roads and bridges, but now the country has to also build the digital infrastructure needed to facilitate e-commerce, among others.

“So, the list that we have to fulfill just keeps getting longer. Unfortunately, we’re still lagging on that long list,” he added.

In the 2024 WCR, the Philippines ranked 62nd in basic infrastructure, 55th in technological infrastructure, and 60th in scientific infrastructure.

“If we fare low in these indicators, then we are not as competitive. Because increasingly, remember, it’s a perception game.”

He said that investors will also weigh these factors when choosing the countries they will be investing in.

Citing cybersecurity as an example, he said that it is a component of the technological infrastructure pillar, in which the Philippines ranked 58th.

“Unfortunately, maybe in the Philippines, we haven’t been able to prioritize cybersecurity, and we are just still trying to address it,” Mr. Franscisco said.

“In other countries, they are more advanced in terms of their awareness and their appreciation of the need to address it, and investors will expect that of countries where they invest, and so if we fare low there, then we are perceived as less competitive,” he added.

Besides improving infrastructure, he said that the Philippines will also have to work on the “right messaging.”

“We keep saying that competitiveness rankings are partly based on perception surveys, and that’s important because, as an investor, you make a decision based on data. But you also make a decision based on gut feel and your perception of a country,” he said.

“So, we need to do an even better job of communicating clearly why it makes sense to do this in the Philippines. Communicating our commitment to reform, to the promises that we’ve made, to investments in basic infrastructure, and whatnot,” he added.

Source: Business World