Despite posting improvements in its overall economic performance, the Philippines has dropped four steps in this year’s World Competitiveness Yearbook (WCY) due to declines in the infrastructure, government and business efficiency factors.
Based on the WCY prepared by the International Institute of Management Development (IMD), the Philippines ranked 52nd among 64 economies after suffering declines in three of the four main factors or dimensions of competitiveness.
The country ranked 48th last year.
The Philippines posted declines in all the sub-factors under government efficiency. These include public finance (from 51st in 2022 to 55th in 2023), tax policy (from 13th to 14th), institutional framework (from 53rd to 56th), business legislation (from 52nd to 57th) and societal framework (from 50th to 53rd).
The country also posted a decline in the business efficiency factor, ranking 40th from 39th, as well as in the infrastructure factor to 58th from 57th in the previous year.
In contrast, the Philippines surged 13 notches higher in the economic performance factor, emerging at 40th from 53rd last year.
Among the sub-factors under the economic performance factor that saw improvements are domestic economy (from 48th in 2022 to 30th in 2023), employment (from 19th to 9th in 2023) and prices (from 58th to 39th).
“Some of the challenges that the Philippines faces in 2023 include sustaining economic recovery and growth momentum amidst global downside risks, strengthening social protection and health care systems for inclusive development, addressing learning gaps to improve local education system, investing in sustainable infrastructure to reduce climate change vulnerability and reinforcing efficient public management strategies to support fiscal responsibility,” said the Asian Institute of Management Rizalino S. Navarro Policy Center for Competitiveness, the IMD’s Philippine partner institute for producing the WCY.
The report noted that the Philippines continues to rank 13th among 14 economies in the Asia-Pacific region, the same ranking for the past six years.
The WCY ranks economies using 255 ranked criteria spread across four Competitiveness Factors: Economic Performance, Government Efficiency, Business Efficiency and Infrastructure.
Of the indicators, 162 are based on hard data gathered from national sources, while the remaining indicators are perception-based ones derived from an Executive Opinion Survey of mid- and upper-level managers in each country covered.
This year’s results reflect the impact of different crises such as global inflation, the COVID-19 pandemic and Russia’s invasion of Ukraine, according to Arturo Bris, director of the World Competitiveness Center.
“Political fragmentation is a result of COVID-19 and the Ukraine war, and a major upshot is that more and more countries – Singapore, Saudi Arabia and India, for example – are pursuing their own interests. With inflation pressures easing and uncertain stock markets, we are now able to see winners and losers in a context where multiple crises overlap,” Bris said.
Denmark ranks as the top competitive economy in the 2023 WCY rankings, followed by Ireland and Switzerland.
In the Asia-Pacific region, the top three most competitive economies are Singapore (4th), Taiwan (6th) and Hong Kong (7th).
Russia and Ukraine were not assessed for this year’s report due to limited data reliability.
In contrast, Kuwait joined the list of surveyed economies for the first time and was ranked 38th among 64 economies.
Source: Philstar