Whoo-hoo! Philippine global competitiveness on the rise!

RP improves competitiveness but low in infra and education


The Philippines competitiveness ranking in the World Competitiveness Yearbook improved and climbed five notches in 2008 but the country continues to rank low in infrastructure and education.
The Philippines ranked 40th out of the 55 countries in the World Competitiveness Yearbook survey of the Swiss-based International Institute for Management Development. This year’s ranking was an improvement from last year when the country landed on the 45th spot.

The survey studied 55 countries using 331 criteria grouped into four categories: hard economic performance, government efficiency, business efficicieny and infrastructure.

Of the four categories, the Philippines ranked highest—31st—in business efficiency but lowest in infrastructure (48th). It landed on the 42nd and 41st spot in economic performance and government efficiency, respectively.

The Philippines, however, ranked very low in infrastructure and education indicators. It ranked 52nd in education, 54th in basic infrastructure, and 53rd in basic infrastructure.

Under the infrastructure subcategory, the Philippines ranked lowest among 55 countries in the pupil-teacher ratio in secondary education. Similarly, it ranked 54th in the secondary school enrolment, and percentage of health spending in the gross domestic product.

The percentage of public expenditure on education in the GDP is also the second lowest among the 55 countries. The World Bank estimates that education spending in the Philippines was equal to 3.2 percent of GDP in 2004. The figure is below Malaysia’s 8 percent and Thailand’s 4.2 percent.

In the business efficiency category, the Philippines ranked 31st. It ranked  15th in labor market sub-category due to the availability of skilled labor, and the Filipinos’ high level of flexibility and adaptability when facing new challenges.

Among the 55 countries, the country ranked 3rd in the availability of skilled labor and 5th in flexibility and adaptability of people. The country, however, ranked very low in labor force participation (52nd), and overall productivity (53rd).

Economic performance

Meanwhile, the Philippines ranked 42nd in economic performance. The study noted improvements in the economy like the 7.3 percent growth in GDP. However, the country ranked very low in subcategories like diversification of economy (52nd) and GDP per capita (54th).

Youth unemployment, the survey showed, is also among the weaknesses of the Philippines. The country landed on the 51st spot in this subcategory as a result of a large number of unemployed young people. Data from the National Statistics Office showed that of the 2.9 million unemployed Filipinos as of April 2008, 51.2 percent belongs to the 15-24 age bracket.

High risk of political instability, unsatisfactory government policies on transparency, and inefficient transport of goods pulled down the country’s ranking in government efficiency to the 41st spot.

Still behind its neighbors

Despite the improvement in the rankings, the Philippines is still lagging behind most of its Asian neighbors. The survey showed that the Philippines is behind Singapore (2nd), Hong Kong (3rd), Taiwan (13th), China (17th), Malaysia (19th), Thailand (27th), India (29th) and South Korea (31). However, it ranked higher than Brazil (43rd), Russia (47th) and Indonesia (51st).

“The good news is we have improved but the bad news is so has everybody else,” said Francis Estrada, president of the Asian Institute of Management, adding that some Asian countries like Thailand, Malaysia and Taiwan also managed to improve their ratings this year.

Thailand climbed six notches in the ranking from 33rd in 2007 to 27th this year while Malaysia landed 19th this year, four notches higher than its ranking last year.

More challenges

The study also noted that for the Philippines to sustain or improve its ranking, it should pursue education policies that will develop world-class workers, complete its priority infrastructure projects, improve its creative human capital, and mitigate the impact of food, energy and climate change security issues.

“The challenge is not to improve the rankings but to create better environment for business and people,” said Cesar Bautista, co-chair of the National Competitiveness Council.

Bautista added that despite the growth in the economy, the Philippines is not attracting foreign direct investments comparable to its neighbors in Southeast Asia and is competitive only in few sectors. He added that there is also imbalance in the distribution of economic activities.

“We seem to be focusing too much on services and seem to be forgetting the agriculture,” he said.




Source: ABS-CBN News Online, http://www.abs-cbnnews.com/topofthehour.aspx?StoryId=125250, July 16, 2008








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