Philippines slips in WEF Energy Transition Index

The Philippines dropped 11 spots in an index that measures countries’ energy transition efforts, reflecting the slowing global momentum amid increasing uncertainty.

The Philippines ranked 105th out of 120 countries in the World Economic Forum’s (WEF) Energy Transition Index (ETI), from 94th in 2023.

The Philippines’ latest ranking was its lowest since 2015 when it ranked 87th in the ETI, which analyzes a country’s current energy system performance and enabling environment for energy transition.

It scored 48.4% on a 0% to 100% scale, lower than 50.2% last year. This is below the global average score of 56.5% and emerging and developing Asia’s average score of 53.9%.

European countries topped this year’s index led by Sweden with a score of 78.4, followed by Denmark (75.2), Finland (74.5), and Switzerland (73.4).

Among the emerging and developing Asian countries, the Philippines had one of the lowest rankings, only ahead of Bangladesh (109th), Pakistan (113rd) and Mongolia (116th).

China had the highest ranking among Asian countries at 17th place, followed by South Korea (23rd), Japan (26th), Vietnam (32nd), Malaysia (40th) and Indonesia (54th).

“Ensuring equitable access to energy is a critical issue in this region, characterized by limited rural electricity access, affordability challenges, extensive energy subsidies and energy prices not returning to pre-pandemic levels,” the WEF said.

The WEF noted this year saw the highest global average scores in the history of the energy transition index, “with modest improvements in system performance of about 0.2% and strong progress in transition readiness, with a growth of 2%.”

“From 2015 to 2024, the global average scores for the ETI have consistently increased, driven by improvements in both system performance and transition readiness,” the report read.

However, WEF said the overall pace of energy transition has slowed worldwide, due to “economic volatility, heightened geopolitical tensions and technological shifts.”

“We must ensure that the energy transition is equitable, in and across emerging and developed economies,” Roberto Bocca, WEF’s head of the center for energy and materials, said in a news release.

“Transforming how we produce and consume energy is critical to success. We need to act on three key levers for the energy transition urgently: reforming the current energy system to reduce its emissions, deploying clean energy solutions at scale, and reducing energy intensity per unit of GDP (gross domestic product),” he added.

The latest annual edition of the report, published in collaboration with Accenture, used indicators such as energy access, energy affordability, economic development, supply, resilience, reliability, energy efficiency, decarbonized energy, clean energy, regulation and political commitment, finance and investment, education and human capital, innovation, and infrastructure.

Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said the Philippines still has limited innovation and research on low-carbon technology.

“Government should partner with other nations which have advanced low carbon research in order to develop our knowhow in this field,” he said in a Viber message.

Source: Business World

PH competitiveness unchanged

The Philippines saw its ranking in an annual global competitiveness report remain unchanged and continued to be one of the laggards in the Asia-Pacific region amid a drop in business efficiency.

In its 2024 World Competitiveness Ranking (WCR) by the Switzerland-based International Institute for Management Development (IMD), the Philippines ranked 52nd out of 67 economies, unchanged from last year.

It also marked the seventh year that the Philippines remained in 13th place out of the 14 Asia-Pacific economies included in the report.

Singapore topped this year’s list, followed by Switzerland, Denmark, Ireland and Hong Kong.

This year, the index expanded its scope to include Ghana, Nigeria and Puerto Rico. In 2023, there were only 64 economies covered by the index.

IMD ranked the economies using 336 indicators spread across four competitiveness factors: economic performance, government efficiency, business efficiency, and infrastructure.

José Caballero, senior economist at the IMD World Competitiveness Center, said that the factors that have diminished the Philippines’ competitiveness this year are related to government and business efficiency.

Mr. Caballero said that the country saw a decline in measures of business legislation such as the protection of foreign investors (65th), the transparency of public sector contracts (56th), the impact of state-owned enterprises (46th), and new business density (62nd).

Asian Institute of Management (AIM) Rizalino S. Navarro Policy Center for Competitiveness Executive Director Jamil Paolo S. Francisco said the Philippines remained in 52nd place despite a decline in two factors — business efficiency and infrastructure.

The Philippines fell three spots to 43rd on business efficiency this year from 40th in 2023. Significant declines were seen in labor market, finance, management practices, and attitudes and values.

“The drop in business efficiency is particularly worrisome because this was a factor that the Philippines performed relatively well at 10 years ago, and we have observed a steady decline in this factor since 2019,” Mr. Francisco said in an e-mailed statement.

For the infrastructure factor, the Philippines slipped three places to 61st in 2024 from 58th last year. This as challenges persist in basic infrastructure, technological infrastructure and education.

Mr. Francisco said that the country’s drop in the infrastructure factor was a concern, as this has been the Philippines’ weakest area for a very long time.

“This is also worrisome because this means we are really lagging behind in terms of providing the physical, human, technological, and social infrastructure needed by private enterprises to generate employment and create business value,” he added.

The Philippines maintained its 40th rank on economic performance, while it climbed three spots to 49th on government efficiency.

Philippine Chamber of Commerce and Industry Chairman George T. Barcelon said the country should address basic and transport infrastructure in order to be competitive.

“When you want to be competitive, especially in the industry and service side, you need to have some of the basic infrastructure, such as availability of quality and affordable power,” Mr. Barcelon said in a phone interview.

“The other one is the availability of mobility or connectivity like roads, seaports, airports, and main corridors for the agriculture sector, which we don’t have,” he added.

The government should also address the decline in the skills of the country’s workforce.

“We are not giving them the proper tools… The technology that’s required now for higher value-added jobs requires more, such as in information technology and in the fourth industrial revolution,” Mr. Barcelon said. “There are some shortcomings in that. But that can be easily addressed if we beef up more specific or targeted skill sets for certain industries.”

According to IMD, the Philippines was less competitive in the areas of business legislation (60th), basic infrastructure (62nd), and education (63rd).

“In 2024, the Philippines faces significant challenges, including revitalizing economic dynamism and growth trajectory, managing inflation expectations, building sustainable physical, social, and technological infrastructure to improve productivity and reduce vulnerabilities, and addressing territorial disputes in the West Philippine Sea to mitigate economic disruptions,” the AIM center said.

Meanwhile, the Management Association of the Philippines (MAP) views the country’s unchanged competitiveness ranking as both good news and a challenge.

“Infrastructure is a major consideration, so we all understand our rank, knowing the need to improve our infrastructure, which the administration of President Marcos is working on,” said MAP President Rene D. Almendras in a Viber message.

“The other consideration is labor productivity, which is a function of the education and development of the Filipino workforce,” he added.

Meanwhile, the National Economic Development Authority (NEDA) and the Anti-Red Tape Authority (ARTA) are hopeful that the country will improve its ranking next year as the government ramps up its infrastructure projects.

“With the strict implementation of this Executive Order No. 59 as well as related government programs, we expect our ranking to improve next year,” ARTA Secretary Ernesto V. Perez said.

On Tuesday, ARTA launched the implementing guidelines of EO 59, which aim to streamline the permitting process for the government’s infrastructure flagship projects.

“Hopefully, with the full implementation of EO 59, we could notch a bit higher in the next round. In addition to permitting and processes, I think what is also included are right-of-way (ROW) issues,” said NEDA Undersecretary Joseph J. Capuno.

He said that these issues could be addressed by the ROW bill, which is one of the priority bills of Frederick D. Go, the special assistant to the President in charge of investment and economic affairs.

For Foundation for Economic Freedom President Calixto V. Chikiamco, the Philippines will be able to achieve a better ranking in the world competitiveness index if it removes protectionism, especially in relation to agricultural products.

“Protecting the agriculture sector signals no need to improve competitiveness and productivity,” said Mr. Chikiamco in a Viber message.

He added that the country must forge more bilateral free trade agreements, amend the Labor Code, improve education, and reduce bureaucratic regulations, especially in the grant of mining concessions.

According to IMD’s Mr. Caballero, economies that reach high levels of competitiveness have focused on strengthening their public and private institutions, entrepreneurship, and innovative capabilities.

For the Philippines, he said that the country must strengthen its education system to “facilitate the effectiveness of talent development,” as it will also ensure alignment between the country’s available talent and socioeconomic objectives.

In the report, the country ranked 55th in total public expenditure on education, 60th in the quality of primary education, and 63rd in secondary education in terms of pupil-teacher ratio.

“Furthermore, the Philippines’ performance in research and development is feeble,” he added, citing that the country ranked deficiently in all measures of expenditure and the total number of researchers and personnel.

Source: Business World

Jobless rate rises to 3-month high

The Philippine unemployment rate climbed to a three-month high in April, while the quality of jobs deteriorated, the Philippine Statistics Authority (PSA) reported on Thursday.

Preliminary data of the PSA’s latest Labor Force Survey (LFS) showed national unemployment rate — the share of the jobless Filipinos to the total labor force — inched up to 4% in April from 3.9% in March but lower than 4.5% a year ago.

April saw the highest unemployment rate in three months or since 4.5% in January.

This translated to 2.04 million unemployed Filipinos in April, up by 41,000 from March. It was 215,000 lower than the 2.26 million jobless a year ago.

For the first four months, the unemployment rate averaged 4%, lower than  4.7% in the same period a year ago.

PSA Undersecretary and National Statistician Claire Dennis S. Mapa said El Niño was the main culprit for the rise in the unemployment rate, especially in the agriculture sector.

“We saw that the crop production in the first quarter declined due to the impact of El Niño. Because the production was lower, you have that decrease in (the number of) employed,” Mr. Mapa said in a mix of English and Filipino during the briefing.

The agriculture sector is the second-largest employer in the country and contributes over a tenth to the economy.

“The slight increase in the unemployment rate, along with the sharp rise in the underemployment rate, reflects economic and seasonal fluctuations, sector-specific downturns, and possible structural changes within the economy,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.

Mr. Roces said the impact of El Niño has reduced labor demand in the agricultural sector, which will eventually affect related industries such as food processing and distribution.

At the same time, job quality deteriorated in April as the underemployment rate went up to 14.6% from 11% in March and 12.9% in April 2023.

PSA data showed the April underemployment rate was the highest in nine months or since the 15.9% recorded in July 2023.

The ranks of underemployed Filipinos — those who want longer work hours or an additional job — rose to 7.04 million in April, up by 1.65 million from March.

Year to date, the average underemployment rate was 13%.

“The rise in underemployment may be attributed to certain subsectors, namely wholesale and retail trade, agriculture and forestry and accommodation and food service activities,” PSA’s Mr. Mapa said.

The employment rate, on the other hand, dipped to 96% in April from 96.1% in March but still an improvement from 95.5% in April last year.

This was equivalent to 48.36 million employed Filipinos in April, a decrease of 798,000 from 49.15 million employed individuals in the prior month.

Year on year, 297,000 Filipinos gained employment.

The employment rate averaged 96% in the first four months compared with 95.3% a year earlier.

PSA data also showed that 50.40 million people were part of the labor force in April 2024. The labor force size fell by 757,000 month on month but grew by 82,000 from 50.31 million in April 2023.

As a result, the labor force participation rate (LFPR) — the proportion of the working-age population (15 years old and over) that is part of the total labor force — slipped to 64.1 % in April, lower than 65.3% in March and 65.1% a year ago.

Year to date, the average LFPR was 63.8%.

“The government aims to assist Filipino workers in the digital age. Initiatives include reducing job search duration, upskilling the workforce, and facilitating the transition towards higher-income jobs,” he said.

By sector, services remained the top employer in April with an employment rate of 61.4%, followed by agriculture with 20.3% and industry with 18.3%.

In April, agriculture and forestry saw jobs fall by 684,000 to 8.35 million, the biggest monthly loss among sectors. It was followed by wholesale and retail trade (down 602,000 down to 10.14 million) and public administration and defense (down 466,000 to 2.82 million).

Meanwhile, month-on-month job gains were recorded in fishing and aquaculture (up 413,000 to 1.44 million), transportation and storage (up 192,000 to 3.75 million), and accommodation and food service activities (up 192,000 to 2.75 million).

On an annual basis, agriculture and forestry shed the most workers at 818,000, followed by wholesale and retail trade (down 587,000) and human health and social work activities (down 85,000).

On the other hand, accommodation and food service activities posted the biggest yearly job gains in April, adding 638,000 workers. Construction saw an increase of 378,000 workers while transportation and storage were up by 289,000.

Wage and salary workers still had the largest share of the labor force at 63.6% in April.

The average Filipino employee worked for 40.5 hours a week in April, slipping from 40.7 hours in March but still more than the 36.9 hours in April last year.

Makoto Tsuchiya, an economist at Oxford Economics, expects the country’s unemployment rate to edge higher and peak at around 4.5% this year amid softening domestic demand and tepid global growth.

Julius H. Cainglet, vice-president for Research, Advocacy and Partnerships at the Federation of Free Workers, said the continued importation of agricultural products has hurt employment in the domestic agricultural sector.

In an e-mail, he said it is critical for key industries and small businesses to receive government support to improve labor conditions and create more decent employment opportunities.

For Mr. Roces, the labor market outlook will depend on several factors such as potential economic recovery, policy interventions, seasonal trends, and the ongoing impact of El Niño.

“While emerging sectors might provide new opportunities, stability will hinge on how these variables play out in the coming months,” Mr. Roces said.

The latest LFS was conducted from April 8 to 20, with 44,890 sample households.

Source: Business World and PSA