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DESPITE
ongoing efforts to raise the standing of the Philippines
in investment competitiveness rankings, the country
remained in the bottom half of the World Economic Forum
(WEF) Global Competitiveness Report 2008-2009, lingering
at No. 71 out of 134 countries.
The
report, released by the Makati Business Club (MBC) on
Wednesday, said the Philippines was again dragged down
by the poor performance of public institutions, where
the country ranked 120th because of perception of highly
wasteful spending of the government.
The
government was also perceived to be lacking in
evenhandedness in dealing with the private sector
(117th) and general concerns about corruption in the
public sphere.
The
threat of terrorism was also seen as a cause of
significant cost for the businesses in the country
(ranked 125th).
“With
regard to labor-market inefficiencies, wages are not
flexibly determined by companies [108th], regulations
impede firms from freely hiring and firing workers
[101st] and firing costs are excessive [108th], all of
which hinder job creation,” the Swiss-based WEF report
said.
There
were improvements that were noted, however, including
the Philippines’ competitiveness advantage in the areas
of on-the-job training, quality of demand conditions in
the goods market and in the size of its domestic and
foreign markets.
“In
these categories, the country lands in the top third
rank among 134 countries,” MBC executive director
Alberto Lim said.
Making
it to the upper third of global competitiveness rankings
by 2010 is the goal of the public-private National
Competitiveness Council (NCC), which was created more
than a year ago to enable the Philippines to entice more
investors to come in.
Former
trade secretary now Ambassador Cesar Bautista said they
will review every aspect of the report, although he is
aware that there are some areas that the WEF measured
which are not part of the NCC agenda.
“Public
health, for example, is not part of the NCC agenda
because we believe it is not directly related to the
country’s competitiveness. For the long term, probably,
but our work is only for near term,” Bautista told the
BusinessMirror at the sidelines of the NCC forum on the
role of local government units in national
competitiveness at the Asian Institute of Management
(AIM) conference center in Makati.
By
staying at No. 71, the Philippines only managed to edge
out Cambodia, which ranked 109th, and Timor Leste
(129th) for the Southeast Asian region.
Singapore
remains as the best performer in the region at No. 5,
followed by Malaysia, 21st; Thailand, 34th; Brunei
Darussalam, 39th, Indonesia 55th and Vietnam, 70th.
“The
government should act promptly to arrest the
deterioration of public institutions and reverse the
country’s poor performance in health and primary
education. These account for 30 percent of the Global
Competitiveness Index for the Philippines, which is
classified by the WEF as belonging to the group of
countries in the factor-driven stage of development,”
Lim said.
The MBC
said the WEF report is widely recognized as the world’s
leading cross-country comparison of factors affecting
economic competitiveness and growth, as it includes
comprehensive listings of the main strengths and
weaknesses of countries.
The
rankings are calculated from both publicly available
data and the executive opinion survey, which is designed
to capture a broad range of factors affecting an
economy’s business climate.
The MBC
administered the conduct of the executive opinion survey
from among its members and those of the Management
Association of the Philippines from April to June 2008.
The
Global Competitiveness Index is based on 12 pillars:
institutions, infrastructure, macroeconomic stability,
health and primary education, higher education and
training, goods market efficiency, labor market
efficiency, financial market sophistication,
technological readiness, market size, business
sophistication and innovation. |
