PH competitiveness slows down, slips one notch in WCY rankings
|2016 WCY Results|
Despite strong GDP growth in 2015, the Philippines fell one notch in the 2016 World Competitiveness Yearbook (WCY) rankings, from 41st in 2015 to 42nd this year out of 61 countries. The country also slipped back to its 2014 ranking of 12th place among 14 Asia-Pacific economies, one notch down from last year’s 11th place. The WCY, published by the International Institute of Management Development since 1989, uses international statistical data supplemented by an Executive Opinion Survey to evaluate countries’ competitiveness over 342 criteria. These criteria fall under four broad categories: Economic Performance, Government Efficiency, Business Efficiency, and Infrastructure.
The Philippines’ Business Efficiency ranking improved by 2 places, from 26th to 24th, on the back of improvements in the Productivity & Efficiency, Management Practices, and Attitudes & Values sub-categories. Particularly, the country ranked 5th in real growth of overall productivity. Likewise, the Philippines ranked 4th in availability of skilled labor, and 3rd in the Executive Opinions Survey for the flexibility and adaptability of Filipinos.
In terms of Economic Performance, the Philippines fell to 38th from 34th last year. Ranking 2nd in terms of resilience to external shocks, and 3rd in forecasted real GDP growth was not enough to make up for decreases in sub-factor rankings for Prices — the country ranked 57th in food costs — and International Trade.
The WCY ranking of Government Efficiency in the Philippines remained unchanged at 36th place. The Philippines performed well in certain criteria, ranking 5th for the positive impact of Central Bank policy on the economy, particularly on exchange rate stability, and 18th in Total General Government Debt relative to GDP. On the other hand, Government Efficiency was still viewed poorly in the executive survey, lagging behind other economies in terms of Bribery & Corruption and the Efficiency of Customs Authorities.
Although the country ranked 55th this year, up from 57th in 2015 in the Infrastructure criteria (broadly defined to include physical, technological, scientific, and social infrastructure), very poor marks in terms of human development, pupil-teacher ratios, communications technology, and pollution management, among others, continued to drag down the Philippines’ ranking.
The Philippines’ fall in the rankings reflects a general decline in the competitiveness of most Asian countries in the 2016 WCY. The rankings of Taiwan, Malaysia, Korea Republic, and Indonesia also dropped markedly over the last year.
Topping the list this year is Hong Kong, unseating the United States of America, which dropped to 3rd place after three consecutive years at the top. Switzerland follows Hong Kong at second place. The United States, which still tops the economic performance and infrastructure criteria, lagged behind the smaller economies in terms of government and business efficiency.
The AIM RSN Policy Center for Competitiveness (formerly AIM Policy Center) has been the Philippine partner institute of the IMD for the annual release of the WCY since 1997. The Center’s analysis of the 2016 WCY results is available at www.policy.aim.edu. For more information, contact AIM RSN Policy Center for Competitiveness via email at firstname.lastname@example.org or call at (02)892-4011 local 5105.
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